State Exemption Reimbursements

36 M.R.S. § 661

As required by the Constitution of Maine, article IV, part third, § 23, the Legislature must reimburse each municipality at least 50% of the property tax revenue loss suffered by that municipality during the previous calendar year as a result of statutory property tax exemptions or credits enacted after April 1, 1978.

A municipality may apply for reimbursement by November 1 of the following year with the State Tax Assessor on the Municipal Valuation Return.

The following exemptions qualify for reimbursement:

  • Animal waste facility (36 M.R.S. § 656(1)(J))
  • Business Equipment Tax Exemption (36 M.R.S. §§ 691 - 700-B)
  • Homestead (36 M.R.S. §§ 681 - 689)
  • Snowgrooming equipment (36 M.R.S. § 655(1)(T))
  • Veterans' exemption (36 M.R.S. § 653)
  • Veterans' organizations (36 M.R.S. § 652(1)(E))
  • Solar and wind energy equipment (36 M.R.S. §§ 655(1)(U), 656(1)(K))


Although the Tree Growth Tax Law program is not an exemption, eligible applicants may receive a reduced per acre rate on their forested land which results in a property tax reduction.

A municipality is entitled to annual payments if it submits the Municipal Valuation Return in a timely manner and if it achieves the appropriate minimum assessment ratio (36 M.R.S. § 327).

The reimbursement is calculated as 90% of the tax lost due to tree growth enrollment. The statutory formula for reimbursement takes the difference between the tax that would have been assessed if the land were valued as undeveloped acreage and the actual tax assessed under tree growth, adjusts that difference by the increase in educational funding that each municipality received as a result of having a lower state valuation, then distributes that aggregate amount to the various municipalities based on the property tax burden in that municipality.   

If a municipality fails to achieve the minimum assessment ratio, they will lose 10% of the calculated reimbursement for each percentage point below that ratio.