An Act to Modernize the State's Tax System LR 1697(03)
Maine Legislature, Session 121, LD 1394
Committee Amendment CA_B_H746 (House)
Amends: 36 MRSA §683, 36 MRSA §6207, 36 MRSA §6209, 36 MRSA §6210, 36 MRSA §6218, 36 MRSA §6219, 36 MRSA §6220, 36 MRSA §1752, 36 MRSA §1760

COMMITTEE AMENDMENT "g" to H.P. 1020, L.D. 1394, Bill, "An 
Act To Modernize the State's Tax System" 
Amend the bill by striking out everything after the enacting 
clause and before the summary and inserting in its place the 
following: 
'PART A 
Sec. A-I. 36 MRSA §683, sub-§I, as repealed and replaced by PL 
2003, c. 20, Pt. BB, §l and affected by §3, is repealed. 
Sec. A-2. 36 MRSA §683, sub-§l-A, as enacted by PL 2003, c. 
20, Pt. BB, §2 and affected by §3, is repealed. 
Sec. A-3. 36 MRSA §683, sub-§l-n is enacted to read: 
1-B. 
Exemption amount. 
The estate up to the just value of 
$7,000 of the homestead of a permanent resident of this State who 
has owned a homestead in this State for the preceding 12 months 
is 
exempt 
from 
taxation except 
for 
assessments 
for 
special 
benefits. 
In 
determining 
the 
local 
assessed 
value 
of 
the 
exemption, 
the 
assessor 
shall 
multiply 
the 
amount 
of 
the 
exemption by the ratio of current just value upon which the 
assessment is based as furnished in the assessor's annual return 
pursuant to section 383. 
If the title to a homestead is held by 
the applicant jointly or in common with others, the exemption may 
not exceed $7,000 of the just value of the homestead but may be 
apportioned among the owners who reside on the property to the 
Page l-LR1697(3) 
COMMITTEE AMENDMENT 
~ ..... 
COMMITTEE AMENDMENT I~I to H.P. 1020, L.D. 1394 
extent of their respective interests. 
A municipality responsible 
for administering the homestead exemption has no obligation to 
create separate accounts for each partial interest in a homestead 
owned jointly or in common. 
Sec. A·4. Application. 
This Part applies to property tax 
valuations based on the status of property on or after April 1, 
2005. 
PARTB 
Sec. B·l. 36 MRSA c. 907, as amended, is amended by repealing 
the chapter headnote and enacting the following in its place: 
CHAPTER 907 
HOMESTEAD TAX CAP PROGRAM 
Sec.B·2. 36MRSA§6201·A, as enacted by PL 1989, c. 534, Pt. 
A, §4, is amended to read: 
§6201-A. Short title 
This chapter shaJJ--:ge II known and may be cited as the 
"Maine-llesiElent:;s-Pr;:eper;:t:;y Homestead Tax ~ 
Program." 
Sec. B·3. 36 MRS A §6207, sub·§I, as amended by PL 1997, c. 
557, Pt. A, §3 and affected by Pt. G, §1 is further amended to 
read: 
1. 
Benefit 
calculation. 
For 
claimants 
representing 
a 
nonelderly household, the benefit is calculated as follows: 
A-1T--F4it:;y-~~€e~~-~-~~~~~~~~-&&»&~~&-:9ase-t:;hat:; 
eHeeeEls-~-:9Qt:;-~-~&-eK€~~~-ei--~-pJQS--~-eE 
t:;hat:;-~~~~~-t:;he-ee~ei4~-~-&aa&-eHeeeQ6-~~~-ineeme 
t:;e-a-maHimam-payment:;-ef-$lrGGGT 
A-2. 
For a single-member household with household income of 
$30,300 or less and for a household with 2 or more members 
with household income of $46,900 or less, the benefit is 
equal to 
100~ of the portion of the benefit base that 
exceeds 4~ of household income: and 
A 3. 
For all claimants 
other 
than 
those 
described in 
paragraph A-2, the benefit is equal to 
100~ of the portion 
of the benefit base that exceeds 5~ of household income. 
COMMITTEE AMENDMENT 
#Jl." 
COMMITTEE AMENDMENT ,h .. to H.P. 1020, L.D. 1394 
The maximum benefit that may be paid to a claimant under this 
chapter is $5,000. 
Sec. B-4. 36 MRSA §6207, sub-§2, as amended by PL 1997, c. 
557, Pt. A, §3 and affected by Pt. G, §l, is repealed. 
Sec. B-5. 36 MRSA §6209, as amended by PL 1989, c. 508, § 25, 
is further amended to read: 
§6209. Annual adjustment 
1. 
Household 
income 
adjustment; 
elderly 
households. 
Beginning March 1, 1989, and annually thereafter, the State Tax 
Assessor 
shall 
determine 
the 
household 
income 
eligibility 
adjustment factor. That factor saall must be multiplied by the 
income limitations in section 6206, applicable for the year prior 
to that for which relief is requested. The result saall must be 
rounded to the nearest $100 and saall-apply applies to the year 
for which relief is requested corresponding to the year on which 
the annualized cost of living adjustments were based. 
8e~iHHiH~ 
Ma~ea-~7-~~~~7-~~~~~~~~~~~~y&G-~-aa}as~-tae 
iHeeme-limitatieH-iH-seetieH-96Q+T-saeseetieH-6T 
2. 
Household 
income 
adjustment: 
nonelderly households. 
Beginning March 1, 2005, and annually thereafter, the State Tax 
Assessor 
shall 
determine 
the 
household 
income 
eligibility 
adjustment factor. 
That factor must be multiplied by the income 
factors in section 6207, subsection 1, paragraph A-2, applicable 
for the year prior to that for which relief is requested. 
The 
result must be rounded to the nearest $100 and applies to the 
year for which relief is requested corresponding to the year on 
which the annualized cost-of-living adjustments were based. 
Sec. B-6. 36 MRSA §6210, as amended by PL 1997, c. 557, Pt. 
A, §4 and affected by Pt. G, §l, is further amended to read: 
§6210. Administration 
The State Tax Assessor shall make available suitable forms 
with instructions for claimants. The claim saall must be in the 
form the State Tax Assessor 
maY-"p£-e-se~,iee prescribes and saall 
must be signed by the claimant. 
The State Tax Assessor shall include a checkoff to request 
an application for the MaiHe-Hes,iaeHts-P~epe~ty Homestead Tax Cap 
Program on the individual income tax form. 
The assessor shall 
also provide for the option of filing an application for the 
MaiHe-~ident~-P~epe~ty Homestead Tax ~ Program using the 
telefile system established by the assessor. 
COMMITTEE AMENDMENT 
~ .. ,. 
COMMITTEE AMENDMENT .. b· to H.P. 1020, L.D. 1394 
Sec. B-7. 36 MRSA §6218, as enacted by PL 1989, c. 534, Pt. 
A, §10, is amended to read: 
§6218. Readability; application; instructions 
The application form and instructions used by applicants for 
assistance under the 
MaiBe--Re-s-i-iient-s--P!'epe!'~y Homestead Tax ~ 
Program and its successor, if any, shall mY£t have a readability 
score, as determined by a recognized instrument for measuring 
adult literacy levels, equivalent to no higher than a 6th grade 
reading level. 
Sec. B-8. 36 MRSA §6219, as amended by PL 1997, c. 526, §14, 
is further amended to read: 
§6219. Outreach plan required 
The Bureau of Revenue Services shall develop and implement a 
plan of outreach to ensure that all eligible households are made 
aware of assistance available under the MaiBe-Re64eeB~s-P£epe~~y 
Homestead Tax ~ 
Program and its successor, if any. 
Sec. B-9. 36 MRSA §6220, as amended by PL 1995, c. 418, Pt. 
A, §39 and by PL 1997, c. 526, §14 and c. 668, §40, is further 
amended to read: 
§6220. Coordination required 
The bureau shall seek the advice and cooperation of the 
Bureau of 
Elder 
and 
Adult 
Services; 
the 
Bureau 
of 
Family 
Independence; the Bureau of Child and Family Services; advocates 
for elderly and low-income individuals; 
and other interested 
agencies and organizations in developing the application form and 
instruction booklet for the 
MaiBe--R&s-ident-s--PFepeF~y Homestead 
Tax ~ 
Program and the outreach plan required by section 6219. 
Sec. B-I0. Application. 
This Part applies to applications for 
benefits on or after August 1, 2004. 
Sec. B-ll. 
Appropriations and allocations. 
appropriations and allocations are made. 
The 
following 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPAR7MENT OF 
Maine Residents Property Tax Program 0648 
Initiative: 
Provides 
funds 
to 
expand 
the 
Maine 
Residents 
Property Tax Program to create the Homestead Tax Cap Program. 
COMMITTEE AMENDMENT 
~ .. ,. 
COMMITTEE AMENDMENT .:.6" to H.P. 1020, L.D. 1394 
General Fund 
All Other 
General Fund Total 
PARTC 
2003-04 
$0 
$0 
2004-05 
$65,600,000 
$65,600,000 
Sec. Col. 36 MRSA §1752, sub-§l-H is enacted to read: 
I-B_ 
Construction services. 
"Construction services" means 
services provided in this State to the general public by a person 
engaged in the activity of building. 
The activity of building 
pertains to any building, highway, 
road, railroad, excavation, 
manufactured building or other structure and involves any act of 
construction, 
alteration, 
repair, 
substantial 
maintenance, 
addition, subtraction, improvement. movement or demolition with 
respect to such structures or the construction of scaffolding or 
other structures or work related to the activity of building. 
"Construction services" includes, but is not limited to, 
the 
services typically provided by building contractors, 
road and 
driveway 
contractors, 
concrete 
contractors, 
excavators, 
carpenters, 
masons, 
electricians, 
plumbers, 
roofers, 
siding 
applicators and house painters. 
Sec. C-2. 36 MRSA §1752, sub-§ll, ,A, as enacted by PL 1989, 
c. 871, §5, is amended to read: 
A. 
"Retail sale" includes: 
(1) Conditional sales, installment lease sales and any 
other transfer of tangible personal property when the 
title is retained as security for the payment of the 
purchase price and is intended to be transferred later; 
and 
fa}-~~~-~--~~aG&&-~9~-~~~e£~~~-~~&&~&~&-t9 
a--pe£5eB--~~--~~~-~~~--ee~&~p&ra&e4--veRaiR~ 
maeaiRes-~-&e~-~9-~-re&ai~er-whe5e-~r~-~eeeipts 
f~9m--&he--~&&~~-~~-~--~~~~~~~--pe£59BaJ--p~9pe~ty 
ae~ivea-~~~-6aJe5--~~-~~~-mae&iReS-~~-m9Fe 
taaR - -SQ-'\.- - «--&&e - ~-e-t-a-i-:l-er-'-6- - '3£955- -reee-~~&&r-- -.!l'-he-- t aH 
mNst-Be-paia-By-tae-Fetaile~-t9-tae-StateT 
(3) 
The provision of a taxable service defined under 
subsection 17 -A to the extent the taxable service is 
provided in this State and only if the relationship 
between the provider and the recipient of the taxable 
service is not an employment relationship with respect 
to the provision of the service. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT 'btl to H.P. 1020, L.D. 1394 
c. 
Sec. C-3. 36 MRSA §1752, sub-§14, ,B, as amended by PL 1989, 
871, §6, is further amended to read: 
B. 
"Sale price" does not include: 
(1) 
Discounts allowed and taken on sales; 
(2) 
Allowances in cash or by credit made 
upon the 
return of merchandise or with respect to fabrication 
services pursuant to warranty; 
(3) 
The price of property returned or fabrication 
services rejected by customers, when the full price is 
refunded either in cash or by credit; 
(4) 
The price received for labor or services used in 
installing or applying or repairing the property sold 
or fabricated, if separately charged or stated; 
(5) 
Any 
amount charged or collected, in lieu of a 
gratuity or tip, 
as 
a 
specifically stated service 
charge, when that amount is to be disbursed by a hotel, 
motel, restaurant or other eating establishment to its 
employees as wages; 
(6) 
The amount of any tax imposed by the United States 
on or with respect to retail sales, whether imposed 
upon 
the 
retailer 
or 
the 
consumer, 
except 
any 
manufacturers', importers', alcohol or tobacco excise 
tax; 
(7) 
The cost of transportation from the retailer's 
place of business or other point from which shipment is 
made directly to the purchaser, provided that those 
charges are separately stated and the transportation 
occurs by means of common carrier, contract carrier or 
the United States mail; 
(8) 
The 
fee 
imposed 
by 
Title 
10, 
section 
1169, 
subsection 11; 
(9) 
The fee imposed by section 4832, subsection 1; eF 
(10) 
The lead-acid battery deposit imposed by Title 
38, section 1604, subsection a-8T 2, paragraph B: or 
(11) 
With respect to any fee for a taxable service, 
any 
portion 
of 
that 
fee 
representing 
direct 
reimbursement charged to the recipient of the taxable 
COMMITTEE AMENDMENT 
.. ~,. 
COMMITTEE AMENDMENT ''If to H.P. 1020, L.D. 1394 
service for commodities or services previously paid by 
the person providing the service, as long as any tax on 
those commodities or services, if any tax applies, has 
been previously paid. 
Sec. C-4. 36 MRSA §1752, sub-§17-A, ,J, as enacted by PL 1999, 
c. 790, Pt. A, §46, is amended to read: 
J. 
Prepaid calling arrangements; aBa 
Sec. C-5. 36 MRSA §1752, sub-§17-A, 1fK, as amended by PL 2003, 
c. 390, §8, is further amended to read: 
read: 
K. 
Rental of furniture, audio media and audio equipment 
pursuant to a rental-purchase agreement as defined in Title 
9-A, section 11-105TL 
Sec. C-6. 36 MRSA §1752, sub-§17-A, "L to 0 are enacted to 
L. 
Amusement and recreational services. 
For the purposes 
of this paragraph, 
"amusement and recreational services" 
includes all services provided in this State to the general 
public or through private clubs that involve eXChanging a 
right 
of 
access 
to 
any 
amusement 
or 
recreational, 
exhibitive, cultural or athletic activity for any user fee, 
price 
of 
admission, 
gate 
fee 
or 
equivalent 
form 
of 
remuneration; 
M. 
Personal services. 
For the purposes of this paragraph, 
"personal seryices" means services provided in this State to 
the general public by a person of specialized skill, talent 
or experience. 
Personal services characteristically include 
attendant care to the recipient of the service or care, 
maintenance or repair services to the recipient's real or 
personal property. 
"Personal 
services" 
includes, 
without 
limitation, such services as: 
(1) 
Personal attendant services, including, but not 
limited to, barbering, beautician, manicure, tattooing, 
body 
piercing, 
massage, 
reflexology, 
tanning 
and 
exercise or fitness services; 
(2) 
Laundering and dry cleaning services; 
(3) 
Painting, 
papering 
and 
interior 
decoration 
services: 
(4) 
Jewelry, camera, watch and gun cleaning and repair 
services; 
COMMITTEE AMENDMENT 
~." 
COMMITTEE AMENDMENT ::£ .. to H.P. 1020, L.D. 1394 
(5) 
Pet grooming and kennel services: 
(6) 
Musical instrument tuning and repair services: 
(7) 
Swimming pool installation, repair, cleaning and 
maintenance services: 
(8) 
Radio, 
television, 
sound 
system 
and 
household 
small appliance repair services: 
(9) 
Furniture, rug and upholstery cleaning and repair 
services: 
(10) 
Locksmith services: 
(11) 
Personal 
property 
and 
self storage 
services, 
including 
storage 
and 
mooring 
services 
for 
noncommercial watercraft: 
(12) 
Services 
related 
to 
the 
waShing, 
cleaning, 
polishing, lubrication, painting or detailing of motor 
vehicles: 
(13) 
Disinfection and pest extermination or control 
services: 
(14) 
Landscaping, lawn care, grounds maintenance and 
tree removal services: 
(15) 
Photography and photographic studio services: 
(16) 
Printing, imprinting, painting or lettering on 
tangible 
personal 
property for 
persons 
who 
furnish 
tangible personal property for that service: 
(17) 
Fabrication, printing or production of tangible 
personal 
property 
by 
special 
order 
when 
tangible 
personal property is not intended for resale: 
(18) 
Repair services for noncommercial watercraft: 
(19) 
Dance instruction and dance studio services: 
(20) 
Dating, escort and personal introduction services: 
(21) 
Flower or balloon delivery services and services 
similarly 
provided 
as 
a 
demonstration 
of 
personal 
appreciation: 
COMMITTEE AMENDMENT 
\\.~,. 
COMMITTEE AMENDMENT ,j};" to H.P. 1020, L.D. 1394 
(22) 
Home cleaning services: 
(23) 
Taxidermy services: 
(24) 
Flight instruction services: 
(25) 
Antigue or art auctioning or dealership services: 
(26) 
Employment agency services: and 
(27) 
Moving and storage services. 
"Personal services" does not include construction services: 
N. 
Membership services and fees. 
For the purposes of this 
paragraph, "membership services and fees" includes dues and 
other 
fees 
paid 
for 
membership 
in 
social, 
fraternal, 
professional or similar organizations, including, but not 
limited to, 
social clubs, 
health or personal enrichment 
clubs, 
fraternal 
organizations 
and 
occupational 
and 
professional associations: and 
O. 
Transportation services. 
For 
the 
purposes 
of this 
paragraph, "transportation services" includes, but is not 
limited to, the provision of transportation for a fee by 
air, land or water, whether by services commonly available 
to 
the 
public, 
by 
private 
charter 
or 
by 
similar 
arrangement. 
"Transportation 
services" 
includes 
taxi 
services, 
limousine 
services 
and 
livery 
services. 
"Transportation 
services" 
does 
not 
include 
public 
transportation or 
transportation provided pursuant 
to 
a 
contract with a public agency and funded by public funds. 
Sec. C-7. 36 MRSA §1752, sub-§l8-D, ,B, as amended by PL 2001, 
c. 584, §8 and affected by §10, is further amended to read: 
B. 
"Telecommunications services" does not include: 
(1) 
Except as otherwise provided by this subsection, 
service originating or terminating outside this State 
that 
is 
provided 
to 
an 
account 
that 
is 
not 
a 
residential account; 
(2) 
Access services; 
(3) 
Directory advertising services; 
(4) The sale of unbundled network elements for use in 
the provision of telecommunications services; 
COMMITTEE AMENDMENT 
~~,. 
COMMITTEE AMENDMENT "h" to H.P. 1020, L.D. 1394 
(5) 
For leases entered into on or after October 1, 
1996, the lease of telecommunications equipment; 
(6) 
A prepaid calling arrangement; or 
(7) 
Mobile telecommunications services provided by a 
home service provider to 
a 
customer whose place of 
primary use is not within this State. 
Sec. C-S. 36 MRSA §1760, sub-§14 is repealed. 
Sec. C-9. 36 MRSA §1760, sub-§16, as amended by PL 1999, c. 
708, §25, is repealed and the following enacted in its place: 
16. 
Hospitals. 
research centers. 
churches 
and schools. 
Sales, except sales, storage or use in activities that are mainly 
commercial enterprises, to: 
A. 
Incorporated hospitals: 
B. 
Incorporated nonprofit nursing homes 
licensed by the 
Department of Human Services: 
C. 
Incorporated 
nonprofit 
residential 
care 
facilities 
licensed by the Department of Human Services: 
D. 
Incorporated nonprofit home health agencies certified 
under the United States Social Security Act of 1965, Title 
XVIII, as amended: 
E. 
Incorporated nonprofit rural community health centers: 
F. 
Incorporated nonprofit dental health centers: 
G. 
Incorporated nonprofit institutions organized for the 
sole purpose of conducting medical research: 
H. 
Incorporated nonprofit institutions organized for the 
purpose of establishing and maintaining laboratories for 
scientific stud,y and, investigation in the field, of biology 
or ecology: 
I. 
Incorporated nonprofit institutions organized for the 
purpose 
of 
operating 
ed,ucational 
television 
or 
radio 
stations: 
J. 
Public schools. 
For the purposes of this paragraph, 
"public 
schools" 
means 
public 
primary, 
secondary 
or 
postsecondary educational 
institutions that 
have 
regular 
faculties, curricula and, organized, bodies of students in 
COMMITTEE AMENDMENT 
~ .• '. 
COMMITTEE AMENDMENT .. (j; .. to H.P. 1020, L.D. 1394 
attendance throughout the usual school year and that keep 
and furnish to students and others records required and 
accepted for entrance to schools of secondary, collegiate or 
graduate rank; and 
K. 
Incorporated nonprofit organizations or their affiliates 
whose purpose is to provide literacy assistance or free 
clinical assistance to children with dyslexia. 
Sec. C-IO. 36 MRSA §1760, sub-§17 is repealed. 
Sec. C-ll. 36 MRSA §1760, sub-§19 is amended to read: 
19. 
Schoo1s. Rental charged for living quarters, sleeping 
or housekeeping accommodations to any student necessitated by 
attendance at a public school as defined in subsection 16. 
Sec. C-12. 36 MRSA §1760, sub-§24 is repealed. 
Sec. C-13. 36 MRSA §1760, sub-§34, as repealed and replaced by 
PL 1981, c. 163, §4, is repealed. 
Sec. C-14. 36 MRSA §1760, sub-§43, as amended by PL 1983, c. 
828, §6, is repealed. 
Sec. C-15. 36 MRS A §1760, sub-§49, as repealed and replaced by 
PL 1999, c. 499, §1, is repealed. 
Sec. C-16. 36 MRSA §1760, sub-§58, as enacted by PL 1987, c. 
343, §5, is amended to read: 
58. 
Portable 
classrooms. 
Sales 
of 
tangible 
personal 
property to be physically incorporated in and become a part of 
portable classrooms 
for 
lease to public schools entitled to 
exemption under subsection 16. 
If the portable classrooms are 
used for an otherwise taxable use within 2 years from the date of 
the first use, the lessor saall-aeeeme becomes liable for the use 
tax based on the original sale price. 
Sec. C-17. 36 MRSA §1760, sub-§64, as amended by PL 1995, c. 
462, Pt. B, §9, is repealed. 
Sec. C-18. 36 MRSA §1760, sub-§65, as amended by PL 1993, c. 
670, §6, is repealed. 
Sec. C-19. 36 MRSA §1760, sub-§71, as enacted by PL 1989, c. 
533, §8, is repealed. 
Sec. C-20. 36 MRSA §1760, sub-§75, as enacted by PL 1989, c. 
871, §15, is repealed. 
COMMITTEE AMENDMENT 
~t'· 
COMMITTEE AMENDMENT "h" to H.P. 1020, L.D. 1394 
Sec. C-21. 36 MRSA §1760, sub-§76, as enacted by PL 1991, c. 
317, is repealed. 
Sec. C-22. 
Appropriations and 
allocations. 
appropriations and allocations are made. 
The 
following 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Maine Residents Property Tax Program 
0648 
Initiative: 
Provides 
funds 
to 
expand 
the 
Maine 
Residents 
Property Tax Program to create the Homestead Tax Cap Program. 
General Fund 
All Other 
General Fund Total 
Maine Revenue Services 0002 
2003-04 
$0 
$0 
2004-05 
$65,600,000 
$65,600,000 
Initiative: 
Provides 
funds 
for 
the 
administrative 
costs 
associated with the 
changes to the homestead exemption, 
the 
circuit breaker program and changes to the sales and use tax, 
including funds for one Tax Examiner position. 
General Fund 
positions - Legislative Count 
Personal Services 
All Other 
General Fund Total 
2003-04 
(0.000) 
$0 
$0 
$0 
2004-05 
(1. 000) 
$53,037 
$247,401 
$300,438 
Homestead Property Tax Exemption - Mandate Reimbursement 
0887 
Initiative: 
Provides funds to reimburse municipalities for 90% 
of the estimated local costs incurred to revise the Homestead 
Property Tax Exemption. 
General Fund 
All Other 
General Fund Total 
ADMINISTRATIVE AND FINANCIAL SERVICES, 
DEPARTMENT OF 
DEPAR"l'MENT roTALS 
GENERAL FUND 
Page l2-LR1697(3) 
2003-04 
$0 
$0 
2003-04 
$0 
2004-05 
$110,000 
$110,000 
2004-05 
$66,010,438 
COMMITTEE AMENDMENT 
,,~,. 
COMMITTEE AMENDMENT ·b lt to H.P. 1020, L.D. 1394 
DEPARTMENT 'lUrAL -
ALL FUNDS 
$0 
$66,010,438 
Sec. C-23. Effective date. 
2004. • 
This Part takes effect August 1, 
SUMMARY 
This amendment is a minority report of the committee. 
The 
amendment replaces the bill and proposes the following changes. 
Part A restores the homestead property tax exemption to the 
original exempt amount of $7, 000 regardless of the value of the 
homestead. 
Part B changes the name of the Maine Residents Property Tax 
Program to the Homestead Tax Cap Program. 
It expands the program 
to include all homeowners, regardless of income, 
and provides 
reimbursement 
for 
the 
amount 
of 
property 
taxes, 
or 
rent 
constituting property taxes, that exceeds 5% of household income, 
or 4°'b of household income for those persons who qualified under 
the former program. 
The maximum benefit is increased from $1,000 
to $5,000. 
Part C repeals the sales tax exemptions for publications 
sold on 
short-term intervals; 
sales 
to private 
schools 
and 
colleges, churches, certain research institutions, camp rentals, 
funeral services, day-care centers and nursery schools, community 
action 
agencies, 
child 
abuse 
councils, 
child 
advocacy 
organizations, monasteries and convents, state-chartered credit 
unions; sales by schools and school-sponsored organizations; and 
sales of certain aircraft parts. 
Part C also changes the sales 
tax treatment of certain products for internal human consumption 
sold through vending machines 
and extends 
the sales tax to 
personal services, amusements and recreational services, consumer 
purchases of memberships in social and miscellaneous services, 
consumer 
purchases 
of 
certain 
transportation 
services 
and 
residential interstate telecommunications services. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 03/08/04 ,;;J!vac:.. 
Office of Fiscal and Program Review 
LD 1394 
An Act to Modernize the State's Tax System 
LR 1697(03) 
Fiscal Note for Bill as Amended by Committee Amendment" " 
Committee: Taxation 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
State Mandate . 
New or Expanded Activity 
Fiscal Note Required: Yes 
Fiscal Note 
2003-04 
2004-05 
Projections 
2005-06 
$0 
($17,724,329) 
($14,320,950) 
$0 
$66,010,438 
$0 
$83,734,767 
$0 
$4,499,972 
$80,196,863 
$94,517,813 
$5,184,521 
Administrative responsibilities for municipalities to revise the Homestead Property 
Tax Exemption 
Unit Affected 
Municipality 
Fiscal Detail and Notes 
Projections 
2006-07 
$869,205 
$97,805,343 
$96,936,138 
$5,317,172 
Costs 
$110,000 
Repealing several sales tax exemptions beginning August 1,2004 will generate approximately $88,235,000 in fiscal 
year 2004-05. The General Fund cost of expanding the Maine Residents Property Tax Program to create the 
Homestead Tax Cap Program is estimated to be $65,600,000 in fiscal year 2004-05. Additional General Fund 
appropriations will also be required beginning in fiscal year 2005-06 to eliminate the tiered portion of the Homestead 
Property Tax Exemption. This bill provides $110,000 in fiscal year 2004-05 to reimburse local municipalities for 90% 
of the estimated local cost of changes to the homestead exemption program. Maine Revenue Services will also require 
$300,438 in fiscal year 2004-05 for the administrative costs associated with these changes. 
General Fund Detail 
2003-04 
2004-05 
2005-06 
2006-07 
Repeal several sales tax exemptions 
$83,734,767 
$94,517,813 
$96,936,138 
Expand Maine Resident Property Tax Program 
$65,600,000 
$74,800,000 
$92,400,00( 
Restore $7,000 Homestead Exemption 
$0 
$5,259,475 
$5,264,520 
Mandate Reimbursement - Homestead Exemption 
$110,000 
$0 
$0 
Administrative Costs 
$300,438 
$137,388 
$140,823 
LR1697(3) - Fiscal Note - Page 1 of 1