Amend the Maine Tax Laws

Last updated: Jun 21, 2019

Details about this bill
Category: Taxation
Status: Passed
Sponsor: Senator Ben Chipman, Senate 27 - Cumberland County
Session: 129
Bill #: LD 1798




This bill makes the following changes to the tax laws.

Part A expands the allowed use of a facsimile signature of the State Tax Assessor to any use by the assessor or at the assessor's direction. In addition, in order to make changes to the property tax law of Maine, Part A:

1. Aligns the delinquent property tax interest rate in the unorganized territory with that of municipalities;

2. Simplifies the notice and appeals processes for municipal valuations;

3. Allows the adjustment of prior years' state valuations for purposes of calculating current and ongoing state education payments to a municipality. Municipalities may appeal adverse decisions to the State Board of Property Tax Review;

4. Requires that the municipal assessor be notified prior to the commitment of taxes for an owner of a partial interest in property to be assessed on the partial interest only;

5. Removes the requirement for benevolent and charitable institutions to be incorporated in Maine in order to qualify for property tax exemption;

6. Clarifies when the alternative municipal tax lien foreclosure sales process is required;

7. Removes the provision allowing the $4,000 exemption for the legally blind to be apportioned among multiple jurisdictions. Instead, the exemption may be claimed only in the taxpayer's place of residence;

8. Eliminates photocopiers and postage machines from property eligible for tax exemption under the business equipment tax exemption;

9. Removes the provision limiting the aggregate total acres that may be classified in the farm and open space tax program to 15,000 for a single person;

10. Aligns the definition of delinquent taxes in the unorganized territory with that of municipalities where taxes are delinquent if not paid by the due date;

11. Clarifies the definitions of "mobile home" and "camper trailer" to align the definitions with those used in property tax and sales tax law;

12. Clarifies that the credit for excise tax previously paid and the model year adjustment for certain vehicles is limited to instances when the previously paid excise tax is the Maine excise tax; and

13. Defines nominal value as less than 20% of the assessed value for determining when the market value for a property should be used for the purposes of calculating the real estate transfer tax.

Part B, in order to make changes to the sales tax law in the Maine Revised Statutes:

1. Specifies that camper trailers and motor homes must be rented as tangible personal property and not as living quarters for the purposes of the exclusion from the definition of retail sale;

2. Aligns the tax treatment of box trucks purchased for short-term rental with that of automobiles, pickup trucks and vans when the trucks are under 26,000 pounds gross vehicle weight by taxing box trucks rental at the same 10% rate and excluding their purchase from sales tax when they are purchased for rental;

3. Provides equity among sales through vending machines by repealing the inclusion of sales by a person primarily engaged in the resale of products through vending machines and also repealing the exemption for sales made through a vending machine;

4. It adds oxygen delivery equipment to the sales tax exemption for positive airway pressure equipment;

5. Reorganizes Title 36, section 1811, which imposes the Maine sales tax, for clarity, moves the provisions regarding the valuation of automobile rentals to the definition of sale price and moves the provision regarding the sourcing of products transferred electronically to a new sourcing provision;

6. Repeals the registration requirement for a person who rents or leases space to more than 4 persons at one location for less than a 12-month period for the purpose of making retail sales;

7. Consolidates the sales tax registration provisions by repealing Title 36, section 1951-B and including the remote seller registration requirements in section 1754-B, except for the expedited route to challenge the remote seller registration requirements due to the United States Supreme Court decision inSouth Dakota v. Wayfair, Inc.;

8. Removes the "provisional" resale certificate status for initial resale certificates and makes all resale certificates valid for a more similar time period;

9. Clarifies that beer and liquor prepared by a manufacturer and sold for on-premises consumption is taxed at the same 8% rate as beer and liquor sold for on-premises consumption by other establishments;

10. Adds retailers registered voluntarily under Title 36, section 1756 to the list of registered retailers able to claim a credit of tax paid on purchases for resale;

11. Enacts a new provision for the sourcing of the sale of tangible personal property, products transferred electronically and services. The new provision aligns Maine's practice with that of the Streamlined Sales and Use Tax Agreement and codifies Maine's existing delivery rule;

12. Consolidates and aligns 2 similar use tax exemptions for the donation of merchandise to tax-exempt organizations; and

13. Terminates and repeals the rental vehicle excise tax reimbursement for excise tax paid after June 30, 2019.

In order to make changes to the income tax laws of Maine, Part C:

1. Repeals the underutilized Maine fishery infrastructure investment tax credit program;

2. Limits calculation of the prior year's sales factor, for purposes of apportioning to the State the gain or loss on the sale of a partnership interest, to those items that represent the partnership's business activity in the State and corrects a reference;

3. Allows nonresident taxpayers to elect to recognize the entire gain or loss from an installment sale of real or tangible property in the taxable year of the transfer or in a subsequent year to simplify the filing process for nonresident individuals;

4. Clarifies the corporate income tax calculation for apportionment to the State with respect to the sale of a partnership interest by replacing references to "gains or losses" with references to "gross receipts." This change creates internal consistency with the calculation of the corporate apportionment factor that is based on the gross receipts of the taxpayer;

5. Removes the apportionment calculation for mutual fund service providers due to lack of use;

6. Clarifies that active duty service members who are domiciled in Maine remain eligible for the educational opportunity tax credit if assigned to active military duty outside Maine, as long as they otherwise qualify;

7. Prohibits the payment of interest on refunds issued relative to the new markets capital investment tax credit when they are delayed due to the fiscal year spending cap on the credit;

8. Allows, at the discretion of the State Tax Assessor, fiduciaries, agents and other persons who act as fiscal agents for federal income tax purposes on behalf of employers to act in similar fashion for Maine income tax withholding purposes. Those fiduciaries, agents and persons are subject to the same requirements and liabilities as imposed on client employers;

9. Replaces provisions subjecting the lowest individual income tax brackets and the highest individual income tax brackets to different annual cost-of-living adjustments with a provision that uses the same cost-of-living adjustment calculation for both brackets;

10. Repeals a Department of Administrative and Financial Services, Maine Revenue Services reporting requirement enacted by "An Act To Enhance Access to Affordable Health Care" and a transfer to the MaineCare Stabilization Fund based on the report.

Part D merges the changes made to the income tax credit for major business headquarters expansions made by 2 different laws enacted in the 128th Legislature, Second Regular Session, Public Law 2017, chapter 405, "An Act To Improve the Effectiveness of the Major Business Headquarters Expansion Tax Credit" and Public Law 2017, chapter 375, "An Act To Amend the Maine Tax Laws."

Part E allows the disclosure of confidential tax information to an authorized representative of the Public Utilities Commission for use in the administration and oversight of the E-9-1-1 funding, the state universal service fund and the telecommunications education access fund.