An Act To Promote Maine Farm and Dairy Products in Place of Soft Drinks in Public Schools and To Create a Maine Residency Program for New Dentists
Maine Legislature, Session 121, LD 0505
Committee: Taxation
Sponsors: MILLS
Amends: 20-A MRSA §15612

Legislative Document 
No. 505 
H.P.390 
House of Representatives, February 5, 2003 
An Act To Promote Maine Farm and Dairy Products in Place of Soft 
Drinks in Public Schools and To Create a Maine Residency Program 
for New Dentists 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative MILLS of Cornville. 
Printed on recycled paper 
/Yl~ 
1'h.11!u£~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 20-A MRSA §15612. sub-§15 is enacted to read: 
15. 
Health promotion fund. 
School 
administrative units 
that adopt policies that prohibit the advertising and sale of 
soft drinks 
and 
candy on all school property and that make 
available 
on 
a 
daily basis 
Maine 
dairy products 
and 
fresh 
in-season farm products for sale and consumption as snack foods 
and as a part of regular school meal programs may receive an 
adjustment from the Health Promotion Fund as provided in Title 
36, section 4855. 
Sec. 2. 36 MRSA c. 721 is enacted to read: 
CHAPTER 121 
SOFT DRINK AND SYRUP TAX 
§4851. 
Definitions 
As 
used 
in this 
chapter, 
unless 
the 
context 
otherwise 
indicates, the following terms have the following meanings. 
1. 
Bottle. 
"Bottle" means 
any closed or sealed glass, 
metal, paper or plastic container or any other type of container 
regardless of the size or shape of the container. 
2. 
Bottled soft drink. 
"Bottled soft drink" 
means 
any 
ready-to-consume, 
nonalcoholic 
drink, 
whether 
carbonated 
or 
noncarbonated, commonly referred to as a soft drink and contained 
in a bottle. 
3. 
Distributor. 
manufacturer 
or 
wholesale 
dealer. 
"Distributor, manufacturer or wholesale dealer" means any person 
who receives, stores, manufactures, bottles or sells bottled soft 
drinks, 
syrup, 
simple 
syrup or 
powder 
or 
base 
products 
for 
mixing, compounding or making soft drinks for sale to retailers, 
other manufacturers, wholesale dealers or distributors for resale 
purposes. 
4. 
Milk. 
"Milk" means natural liquid milk regardless of 
animal source or butterfat content; natural milk concentrate, 
whether or not reconstituted, 
regardless of animal 
source or 
butterfat content; or dehydrated natural milk, 
whether or not 
reconstituted. 
5. 
Natural fruit 
Ju~ce. 
"Natural fruit juice" means the 
original liquid resulting from the pressing of fruit, the liquid 
resulting 
from 
the 
reconstitution 
of 
fruit 
juice 
Page l-LR0845(1) 
concentrate or the liguid resulting from the restoration of water 
to dehydrated fruit juice. 
6. 
Natural 
vegetable 
juice. 
"Natural vegetable 
juice" 
means 
the 
original 
liguid 
resulting 
from 
the 
pressing 
of 
vegetables, 
the 
liguid resulting 
from 
the 
reconstitution of 
vegetable juice concentrate or the liguid resulting from the 
restoration of water to dehydrated vegetable juice. 
7. 
Nonalcoholic beverage. 
"Nonalcoholic beverage" 
means 
any beverage not subject to tax under Title 28-A, Part 4. 
8. 
Place of business. 
"Place of business" means any place 
where 
soft drinks, 
syrups, 
simple 
syrups 
or 
powder 
or 
base 
products are manufactured or any place where bottled soft drinks, 
syrup, simple syrup, powder or base product or any other item 
taxed under this chapter is received. 
9. 
Powder or base product. 
"Powder or base product" means 
a solid mixture of basic ingredients used in making, mixing or 
compounding soft drinks by mixing the powder or other base with 
water, ice, syrup, simple syrup, fruits, vegetables, fruit juice, 
vegetable juice or any other product suitable to make 
a soft 
drink. 
10. 
Retailer. 
"Retailer" means any person, other than a 
manufacturer, distributor or wholesaler, 
who 
receives, 
stores, 
mixes, 
compounds or manufactures any soft drink and sells or 
otherwise dispenses the soft drink to the ultimate consumer. 
11. 
Sale. 
"Sale" means the transfer of title or possession 
for 
a 
valuable 
consideration 
of 
tangible 
personal 
property 
regardless of the manner by which the transfer is accomplished. 
12. 
Sitnp1e syrup. 
"Simple syrup" means a mixture of sugar 
and water. 
13. 
Soft 
drink. 
"Soft 
drink" 
means 
any 
nonalcoholic 
beverage, 
whether naturally or artificially flavored, 
whether 
carbonated 
or 
noncarbonated, 
sold 
for 
human 
consumption, 
including, 
but 
not 
limited to, 
soda 
water, 
cola 
and 
other 
flavored drinks, any fruit or vegetable drink containing 10°i> or 
less of natural fruit juice or natural vegetable juice and all 
other drinks and beverages commonly referred to as soft drinks, 
but not including coffee or tea unless the coffee or tea is 
bottled as a liguid for sale. 
14. 
Syrup. 
"Syrup" 
means 
the liguid mixture 
of basic 
ingredients used in making, mixing or compounding soft drinks by 
mixing 
the 
syrup 
with 
water, 
simple 
syrup, 
ice, 
fruits, 
vegetables, fruit juice, vegetable juice or any other product 
suitable to make a soft drink. 
§4852. 
Tax rate 
1. 
Tax 
imposed. 
There 
is 
imposed 
a 
tax 
on 
every 
distributor, manufacturer or wholesale dealer to be calculated as 
follows: 
A. 
Two dollars per gallon of syrup or simple syrup sold or 
offered for sale; 
B. 
Twenty-one cents per gallon of bottled soft drinks sold 
or offered for sale; and 
C. 
When a package or container of powder or base product is 
sold or offered for sale in the State, the tax on the sale 
of each package or container is equal to 21¢ for each gallon 
of soft drink that may be produced from each package or 
container 
by 
following 
the 
manufacturer's 
instructions. 
This tax applies when the powder or base product is sold to 
a retailer for sale to the ultimate consumer after the soft 
drink is produced by the retailer. 
2. 
Purchase 
from 
unlicensed 
seller. 
A 
retailer 
who 
purchases bottled soft drinks, syrup, simple syrup or powder or 
base 
product 
from 
an 
unlicensed distributor, 
manufacturer 
or 
wholesale dealer is liable for the tax imposed in subsection 1. 
§4853. 
Exemptions 
The following are exempt from the tax imposed by section 
4852: 
1. 
Sales to Federal Government. 
Syrups, 
simple syrups, 
powders or base products or soft drinks sold to the Federal 
Government; 
2. 
Products exported from State. 
Syrups , 
simple syrups , 
powders or base products or soft drinks exported from the State 
by a distributor, manufacturer or wholesale dealer; 
3. 
Coffee or tea base. 
Any powder or base product used in 
preparing coffee or tea; 
4. 
Juice 
or 
vegetable 
concentrate. 
Any 
frozen, 
freeze-dried or other concentrate to which only water is added to 
produce a soft drink containing more than 10% natural fruit juice 
or natural vegetable juice; 
5. 
Fruit or vegetable juice. 
Any 
soft drink containing 
more than 10% natural fruit juice or natural vegetable juice; 
6. 
Sales to another distributor, manufacturer or wholesale 
dealer. 
Syrups, simple syrups, powders or base products or soft 
drinks sold by a distributor, manufacturer or wholesale dealer to 
a 
distributor, 
manufacturer 
or 
wholesale 
dealer 
who 
holds 
a 
license 
under 
section 
4856 
if 
the 
license 
number 
of 
the 
distributor, manufacturer or wholesale dealer to whom the soft 
drink is sold is clearly shown on the invoice for the sale that 
is claimed to be exempt. 
This exemption does not apply to any 
sale to a retailer; 
7. 
Infant formula. 
Any product, whether sold in liguid or 
powder form, that is intended by its manufacturer for consumption 
by infants and that is commonly referred to as infant formula; 
8. 
Water. 
Water to which nQ flavoring, whether artificial 
or natural, has been added and which has not been artificially 
carbonated; 
9. 
Dietary aids. 
Any product, whether sold ln liguid or 
powder form that is intended by its manufacturer for use as a 
dietary supplement or for weight reduction; 
10. 
Consumer mix. ---.lillY powder or other base product that is 
intended by its manufacturer to be sold and used for the purpose 
of domestically mixing soft drinks by the ultimate consumer; and 
II. 
products. 
Milk products. 
54854. 
Reports 
Any product _ containing milk or milk 
A distributor, 
manufacturer 
or wholesale dealer 
and 
any 
retailer subject to the tax imposed by this chapter shall file a 
monthly return with the assessor and pay the tax on or before the 
15th day of the month following the month in which the sale or 
purchase was made. 
The returns must be made on forms prescribed 
by the assessor. 
The return must contain any information the 
assessor reguires for the proper administration of this chapter. 
When 
a retailer is also acting as 
a distributor or wholesale 
dealer, 
the duty to report and pay the tax 
imposed by this 
chapter arises when the property is transferred to a retail store 
for sale to the ultimate consumer, as reflected by the records of 
the taxpayer. 
54855. 
Disposition of revenues; Health Promotion Fund 
1. 
Health Promotion Fund. 
There is created the Health 
Promotion Fund, referred to in this section as "the fund." 
All 
revenue received from the tax imposed by this chapter, after the 
cost of administration of this chapter by the bureau has been 
deducted, must be paid to the fund. 
Money in the fund does not 
lapse but is carried forward for the purposes of this section. 
Expenditures from the fund may be made only in accordance with 
subsection 2. 
2. 
Use of fund. 
Money in the fund may be used for the 
following purposes. 
A. 
Fifty percent of money in the fund must be distributed 
by the Department of Education each year on a per-student 
basis to school administrative units that adopt policies 
that prohibit the advertising and sale of soft drinks anq 
candy on all school property and that make available on a 
daily basis Maine dairy products and fresh in-season farm 
products for sale and consumption as snack foods and as part 
of regular school meal programs. 
B. 
Fifty percent of money in the fund must be used by the 
Department of Human Services for a dental health residency 
program for one or more qualifying hospitals in the State 
based on competitive applications. 
§4856. 
Licenses 
1. 
Distributor, 
manu.facturer 
or 
wholesale 
dealer. 
Any 
distributor, manufacturer or wholesale dealer who sells or offers 
for sale syrups, simple syrups, powders or base l?roducts or soft 
drinks for sale to retailers within the State shall obtain from 
the 
bureau 
a 
license 
for 
the 
privilege 
of 
conducting 
such 
business within the State. 
2. 
Retailer. 
Any retailer who 
purchases syrups, 
simple 
syrups, 
powders 
or 
base 
products 
or 
soft 
drinks 
from 
an 
unlicensed distributor, manufacturer or wholesale dealer shall 
obtain a license from the bureau for the privilege of conducting 
such business. 
3. 
Location; display. 
Any 
person required to obtain 
a 
license under this chapter shall obtain a license for each plac~ 
of business owned or operated by that person. 
The license must 
be conspicuously disl?layed at the place of business for which it 
was issued. 
§4857. 
Rules 
The assessor may adopt rules under the Maine Administrative 
Procedure Act to provide for the administration of this chapter. 
These rules may provide for a fee to cover the cost of issuing 
licenses required under section 4856. 
Rules adopted under this 
section are 
routine 
technical 
rules 
as 
defined in Title 
5, 
chapter 375, subchapter 2-A. 
Sec. 3. Dental health residency program. 
The 
Department of 
Human Services shall establish a dental health residency program 
for the purpose, which is funded pursuant to the Maine Revised 
Statutes, Title 36, section 4855, subsection 2, of improving the 
dental health of residents of the State. 
The program shall make 
grants to one or more qualifying hospitals in the State based on 
competitive applications. 
SUMMARY 
This bill establishes a tax on the distribution, manufacture 
and wholesale of soft drinks and soft drink products. 
One half 
of the revenue from the tax would be distributed to schools that 
prohibit the advertising and sale of soft drinks and candy and 
that sell Maine dairy and farm products. 
The other 1/2 of the 
revenue would be used to establish dental residency programs at 
one or more qualifying Maine hospitals.