To Amend the Maine Tax Laws

Last updated: Jun 24, 2017

Details about this bill
Category: Taxation
Status: Passed
Sponsor: Representative Bruce Bickford, House 63
Session: 128
Bill #: LD 1551

Position:

Monitoring.

UPDATE: This bill has been passed and signed into law.

Summary:

Part A does the following.

1. It adds a tax information confidentiality exception to allow disclosures by the Maine Revenue Services to the Revenue Forecasting Committee in order to make available relevant tax information in support of the committee's statutory duties.

2. It amends tax lien provisions beginning August 1, 2017 to increase the State’s ability to be first in line in priority ahead of certain other creditors for payment on a tax debt. The changes also clarify that the new lien provision does not affect liens related to municipal property taxes.

3. It amends the general provision for the annual calculation of the interest rate applicable to the Maine Revised Statutes, Title 36 tax underpayments and overpayments, effectively reducing the applicable interest rate.

4. It adds an exclusion to allow the public disclosure of information, except when the statute specifically designates the information as confidential.

5. It broadens an existing authorization for disclosure of confidential tax information to allow disclosures to the Department of Administrative and Financial Services, Division of Financial and Personnel Services, as well as to the Department of Health and Human Services, for purposes of financial accounting and revenue forecasts in order to make available relevant tax information in support of statutory duties of the Department of Administrative and Financial Services with respect to financial accounting and revenue forecasts with respect to the specific taxes.

6. It removes services from the definitions of retail sales activity and retail sales facility under the business equipment tax exemption laws to make the amended definitions match the same definitions in the business equipment tax reimbursement laws. Aligning the definitions for the 2 programs will eliminate confusion over eligibility for certain personal property.

7. It aligns the business equipment tax exemption laws taxpayer appeal procedures with that of those of the Maine resident homestead property tax exemption program and allows municipalities that are aggrieved by an audit determination of the bureau to appeal in the same manner as persons requesting reconsideration.

8. It adds boat clubs and associations leasing storage, mooring or docking space to the list of entities required to maintain information on watercraft related to the lease. It also adds selling as an activity triggering the information collection requirement.

9. It changes, under the business equipment tax reimbursement laws, the year upon which to calculate energy primarily for sale from the year immediately preceding the property tax year for which a claim is made to the property tax year for which a claim is made.

Part B does the following.

1. It requires the prepaid wireless fee to be remitted in the same manner as the service provider tax.

2. It provides that diabetic supplies are exempt from sales tax only when sold for use by human beings.

3. It provides a sales tax exemption for sales of prepared food by a civic, religious or fraternal organization, including an auxiliary of such an organization, at a public or member-only event, except when alcoholic beverages are available for sale at the event or it is a private function, for up to 24 days during a calendar year.

4. It replaces the bracket system for calculating sales tax with a conventional rounding algorithm, effective January 1, 2018.

5. It provides that refunds of the gasoline tax and special fuel tax may be made to the Federal Government.

Part C allows businesses subject to the Maine insurance premiums tax to be eligible for the educational opportunity tax credit, consistent with the credit allowed to taxpayers subject to the Maine income tax. The credit applies to tax years beginning on or after January 1, 2017.

Part D does the following.

1. It repeals the addition modification for a taxpayer’s expenses for a qualified long-term disability income protection plan or qualified short-term disability protection plan in order to maintain consistency with the treatment of expenses for taxable corporations and to promote simplification.

2. It repeals the adjustment to itemized deductions for expenses included in the base for the adult dependent care credit tax.

3. It moves the due date for filing Maine financial institution franchise tax returns from the 15th day of the 3rd month to the 15th day of the 4th month following the end of the tax year in conformity with recent federal changes to the filing due date for C corporation income tax returns. The change applies to tax years beginning on or after January 1, 2017.

4. It corrects a conflict created when 3 public laws enacted the Maine Revised Statutes, Title 36, section 5219-NN, all substantively different from each other. The conflict is corrected by repealing the versions enacted by Public Law 2015, chapter 490 and Public Law 2015, chapter 503 and enacting them as Title 36, section 5219-OO and section 5219-PP, respectively, with the following changes:

A. The employer credit for disability protection plans is limited to employees who were not covered under a disability protection plan offered by the employing unit in the tax year immediately preceding the year the employer is first eligible for the credit. The credit applies to eligible employees enrolled in a qualified disability plan after January 1, 2017; and

B. The tax credit for making a portion of an existing homestead accessible to an individual with a disability or physical hardship is clarified to specify that it applies to individuals, not businesses, making qualified expenditures, that the credit is nonrefundable and that an individual with negative federal adjusted gross income qualifies for the credit. Also, the aggregate annual cap of $1,000,000 applicable to the credit is removed. The changes all apply to tax years beginning on or after January 1, 2017.

The version of Title 36, section 5219-NN as enacted by Public Law 2015, c. 388 regarding the Maine capital investment credit for 2015 and after remains as section 5219-NN.

5. It prohibits, for tax years beginning on or after January 1, 2017, married individuals filing separate income tax returns from claiming the property tax fairness credit. The change is consistent with a similar restriction under the sales tax fairness credit.

6. It repeals the additional extension of 30 days beyond the federal extension due date for filing Maine income tax returns for corporations and financial institutions. This change applies to tax years beginning on or after January 1, 2017.

7. It changes the date an information return, such as a Form W-2, must be filed with Maine Revenue Services from February 28th to January 31st following the calendar year to which the information return relates. The change in the due date applies to information returns filed for calendar years beginning on or after January 1, 2017.

8. It provides that court-ordered restitution obligations are afforded a priority for setoff from state income tax refunds pursuant to Title 36, section 5276-A that is just above the priority given to court fines and fees.

Part E does the following.

1. It repeals a requirement that the State Tax Assessor submit an annual report to the Legislature identifying the amount of public funds spent and the amount of revenues foregone as the result of economic development incentives.

2. It repeals a requirement that the State Tax Assessor submit an annual report to the Legislature on the costs incurred in creating and maintaining, and the tax revenues collected by using, the data warehouse authorized by the Maine Revised Statutes, Title 36, section 194.

3. It repeals a requirement that the State Tax Assessor submit an annual report to the Legislature regarding the consultation process required by Title 36, section 194-A and the issues involved with, and results of, each such consultation.

4. It requires that information regarding reimbursements of property taxes paid on certain business property made pursuant to Title 36, chapter 915 be added to the tax expenditure report submitted to the Legislature by the State Tax Assessor and changes the due date of that report from January 5th to February 15th of each odd-numbered year.

5. It changes the due date of the tax incidence report submitted to the Legislature by the State Tax Assessor from January 1st to February 15th of each odd-numbered year.

6. It specifies that the report submitted to the Legislature by the State Tax Assessor no later than February 1st annually identifying all requests for an adjustment of equalized valuation under Title 36, section 208-A pertains to the most recently completed fiscal year rather than the previous calendar year.

7. It repeals a requirement that the Commissioner of Administrative and Financial Services submit an annual report to the Legislature regarding the Mining Impact Assistance Fund.

8. It repeals a requirement that the State Tax Assessor submit an annual report to the Legislature containing information that includes a list of persons receiving reimbursement for property taxes both under the business equipment tax reimbursement program and under a tax increment financing agreement.