An Act To Make the Business Equipment Tax Reimbursement Program a Local Option
Maine Legislature, Session 121, LD 0783
Committee: Taxation
Sponsors: LEMOINE
Amends: 36 MRSA §5219-E

Legislative Document 
No. 783 
H.P.583 
House of Representatives, February 18,2003 
An Act To Make the Business Equipment Tax Reimbursement 
Program a Local Option 
Reference to the Committee on Taxation suggested and ordered printed. 
11/~/J7.~ 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative LEMOINE of Old Orchard Beach. 
Printed on recyc led paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 5 MRS A §13070-J. sub-§I, llD, as corrected by RR 200L 
c. 2, Pt. A, §11, is amended to read: 
D. 
"Economic development incentive" means: 
(1) 
Assistance from Maine Quality Centers under Title 
20-A, chapter 431-A; 
(2) 
The Governor's Training Initiative Program under 
Title 26, chapter 25, subchapter 4; 
(3) 
Municipal 
tax 
increment 
financing 
under 
Title 
30-A, chapter 206; 
(4) 
The jobs and investment tax credit under Title 36, 
section 5215; 
(5) 
The research expense tax credit under Title 36, 
section 5219-K; 
(6) 
Reimbursement for taxes paid on certain business 
property under Title 36, chapter 919 916; 
(7) 
Employment tax increment financing under Title 36, 
chapter 917; 
(8) 
The Shipbuilding facility credit under Title 36, 
chapter 919; or 
(9) 
The credit for seed capital investment under Title 
36, section 5216-B. 
Sec. 2. 36 MRSA ~661. sub-§6 is enacted to read: 
6. 
Local option reimbursement program reduction. 
If 
a 
municipality 
adopts 
a 
local 
option 
business 
equipment 
tax 
reimbursement program pursuant to chapter 916, the amount of the 
reimbursement provided under that program is not eligible for 
reimbursement pursuant to this section. 
Sec. 3. 36 MRSA §5219-E. sub-§I, llB, as amended by PL 1997, c. 
24, Pt. C, §11, is further amended to read: 
B. 
"Investment credit base" means the total original basis, 
without adjustment, for federal income tax purposes, of the 
taxpayer of all machinery and equipment placed in service 
for the first time in this State by the taxpayer or other 
person during any of the prior 5 taxable years, except in 
Page l-LR0746(1) 
taxable years ending in 1995, the prior 6 taxable years, 
excluding the basis of machinery and equipment placed in 
service in this State prior to January 1, 1989 and after 
April 1, 1996. 
In the case of a combined report, the term 
,:,:,investment credit base,:,:, means the sum of the investment 
credit bases for all corporations included in the report. 
If the taxpayer is reimbursed pursuant to chapter 91a 916 
for 100°'!> of the property taxes assessed during the taxable 
year 
against 
all 
of 
the 
machinery 
and 
equipment 
that 
constitutes eligible property as defined in section 99al 
QQll, subsection 1 2., that machinery and equipment may not 
be included in the investment credit base for that taxable 
year. 
The term "taxable year" means the taxable year for 
income tax purposes of the taxpayer. 
Sec. 4. 36 MRSA c. 915, as amended, is repealed. 
Sec. 5. 36 MRSA c. 916 is enacted to read: 
CHAPTER 916 
LOCAL OPTION BUSINESS EOUIPMENT TAX REIMBURSEMEH'l' 
§6671. 
Local option tax reimbursement 
1. 
Municipalities authorized to adopt program. 
If the 
legal 
voters 
of 
a 
municipality 
give 
their 
approval 
in 
a 
referendum vote, the legislative body of that municipality may 
adopt 
a 
local 
option 
business 
equipment 
tax 
reimbursement 
program, 
referred 
to 
in 
this 
chapter 
as 
"a 
reimbursement 
program," as specified in this chapter. 
§6672. 
Organization of reimbursement program 
A municipality that adopts a reimbursement program must do 
so according to this section. 
1. 
Percentage of reimbursement. 
The municipality may adopt 
a reimbursement program that provides for a maximum reimbursement 
of 100°'!> of the personal property taxes levied pursuant to this 
Part and paid to that municipality on eligible business equipment. 
2. 
Eligible business equipment. 
Business equipment that is 
eligible for reimbursement is tangible personal property that: 
A. 
Is used or held for 
use exclusively for 
a 
business 
purpose by the person in possession of it or, in the case of 
construction in progress or inventory parts, is intended to 
be used exclusively for a business purpose by the person who 
will possess that property; and 
B. 
Either: 
(1) Was subject to an allowance for depreciation under 
the Code on April 1st of the property tax year to which 
the claim for reimbursement relates or would have been 
subject to an allowance for depreciation under the Code 
as of that date but for the fact that the property has 
been fully depreciated; or 
(2) 
In 
the 
case 
of 
construction 
in 
progress 
or 
inventory parts, would be subject under the Code to an 
allowance for depreciation when placed in service or 
would 
have 
been 
subject 
to 
an 
allowance 
for 
depreciation under the Code as of that date but for the 
fact that the property has been fully depreciated. 
"Business property" also includes all property that is affixed or 
attached to a building or other real estate if it is used to 
further a particular trade or business activity taking place in 
that building or on that real estate. "Business property" does 
not-
include components or attachments to 
a 
building if used 
primarily to serve the building as a building, regardless of the 
particular trade or activity taking place in or on the building. 
"Business property" also does not include land improvements if 
used primarily to further the use of the land as land, regardless 
of the particular trade or business activities taking place in or 
on the land. In the case of construction in progress or inventory 
parts, the term "used" means "intended to be used." "Business 
property" 
also 
does 
not 
include 
any 
vehicle 
registered 
for 
on-road use on which a tax assessed pursuant to chapter III has 
been paid or any watercraft registered for use on state waters on 
which a tax assessed pursuant to chapter 112 has been paid. 
3. 
Reimbursement program restrictions. 
A municipality may 
adopt a reimbursement program that: 
A. 
Has 
stricter eligibility 
reguirements 
for 
business 
eguipment than those specified in subsection 2; 
B. 
Applies only to businesses located in specific areas of 
the municipality; or 
C. 
Applies 
only 
to 
businesses 
engaged 
~n 
a 
specific 
business activity. 
§6673. 
Notification to assessor 
A municipality that adopts 
a 
reimbursement program under 
this chapter shall notify the assessor at least 90 days before 
the reimbursement program is effective. 
The municipality shall, 
by July 1st of each year, notify the assessor of the following: 
1. 
Percentage. 
The percentage of the personal property 
taxes reimbursed; 
2. 
Reimbursement paid. 
The total dollar amount of the 
reimbursement paid; and 
3. 
Eligibility requirements. 
The 
type 
of business 
and 
business 
eguipment 
eligible 
for 
reimbursement 
under 
the 
reimbursement program and any location restrictions. 
§§674. 
Referendum 
The guestion of whether to adopt a 
reimbursement program 
must be submitted to the legal voters of a municipality that 
seeks to adopt a reimbursement program. 
The petition process and 
the voting at elections held in towns and plantations must be 
held and conducted in accordance with Title 30-A, sections 2528, 
2529 and 2532 even if the town or plantation has not accepted the 
provisions of section 2528. 
The voting at elections held in 
municipalities must be held and conducted in accordance with 
Title 2l-A. 
The municipal clerk shall make 
a 
return of the results, 
certify the results and send them to the Secretary of State. 
The 
Secretary of State shall forward the results to the assessor. 
A reimbursement program may be discontinued by referendum 
conducted in the 
same 
manner 
as the 
referendum adopting the 
reimbursement program under this chapter. 
§6675. 
Effective date of reimbursement program 
A reimbursement program authorized by this chapter takes 
effect 120 days after the municipal referendum vote if it is 
accepted by a majority of the local voters voting at the election 
and the total number of votes cast for and against acceptance of 
the reimbursement program exceeds 20% of the total votes cast in 
that municipality in the most recent gubernatorial election. 
SUMMARY 
This bill repeals the Business Equipment Tax Reimbursement 
program that provides state reimbursement of property taxes paid 
on personal business property. 
This bill allows 
a municipality to adopt a 
local option 
business 
equipment 
tax 
reimbursement 
program 
in 
which 
the 
municipality would reimburse the business for property taxes paid 
on 
business 
equipment 
located 
in 
that 
municipality. 
The 
municipality may reimburse any portion of the taxes paid, up to 
100%. 
The municipality also may restrict the program to certain 
types of business equipment, specific areas of the municipality 
or certain types of business. 
Taxes reimbursed pursuant to the local option reimbursement 
program 
adopted 
by 
a 
municipality 
are 
not 
eligible 
for 
reimbursement by the State.