An Act Concerning Technical Changes to the Tax Laws
Maine Legislature, Session 121, LD 1816
Committee: Taxation
Sponsors: LEMOINE, STANLEY, CLOUGH, LERMAN, TARDY, NASS
Amends: 36 MRSA §111, 36 MRSA §135, 36 MRSA §1752, 36 MRSA §1760, 36 MRSA §2903, 36 MRSA §3204-A, 36 MRSA §5122, 36 MRSA §5200-A, 36 MRSA §5227-A, 36 MRSA §5243, 36 MRSA §5278, 36 MRSA §5311

12lst MAINE LEGISLATURE 
Legislative Document 
No. 1816 
H.P.1338 
House of Representatives, December 22,2003 
An Act Concerning Technical Changes to the Tax Laws 
Submitted by the Department of Administrative and Financial Services pursuant to Joint 
Rule 204. 
Received by the Clerk of the House on December 17, 2003. Referred to the Committee on 
Taxation pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 401. 
;r;~/J7.1ll~ 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative LEMOINE of Old Orchard Beach. 
Cosponsored by Senator STANLEY of Penobscot and 
Representatives: CLOUGH of Scarborough, LERMAN of Augusta, McGOWAN of Pittsfield, 
TARDY of Newport, Senator: NASS of York. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §111, sub-§4, as enacted by PL 1979, c. 378, 
§2, is amended to read: 
4. 
Return. "Return" means any document, digital file or 
electronic data transmission containing information required by 
this Title to be reported to the State Tax Assessor. 
Sec. 2. 36 MRSA §135, sub-§2, as amended by PL 1995, c. 281, 
§4 and PL 1997, c. 526, §14, is further amended to read: 
2. 
Bureau of Revenue Services. 
Returns filed under this 
Title or microfilm reproductions or digital 
images 
of 
those 
returns must be preserved for 3 years and thereafter until the 
State Tax Assessor orders their destruction. 
Sec. 3. 36 MRSA §1752, sub-§12-A is enacted to read: 
12-A. 
Rural 
cOlIDunity health center. 
"Rural 
community 
health 
center" 
means 
a 
person 
that 
delivers, 
or 
provides 
facilities for the delivery of, comprehensive primary health care 
in a place or territory that is classified as rural according to 
the most recent federal decennial census. 
Sec. 4. 36 MRS A §1752, sub-§14-E is enacted to read: 
14-E. 
School. 
"School" 
means 
a 
public or 
incorporated 
nonprofit 
primary, 
secondary 
or 
postsecondary 
educational 
institution that has a regular faculty, curriculum and organized 
body of pupils or students in attendance throughout the usual 
school year and that keeps and furnishes to students and others 
records 
required 
and 
accepted 
for 
entrance 
to 
schools 
of 
secondary, collegiate or graduate rank. 
Sec. 5. 36 MRS A §1760, sub-§16, as amended by PL 1999, c. 708, 
§25, is further amended to read: 
16. 
Hospitals, 
research centers, 
churches 
and 
schools. 
Sales to incorporated hospitals, incorporated nonprofit nursing 
homes licensed by the Department of Human Services, incorporated 
nonprofit residential care facilities licensed by the Department 
of Human Services, incorporated nonprofit home health agencies 
certified under the United States Social Security Act of 1965, 
Ti tIe XVIII, as amended, incorporated nonprofit rural community 
health centers 
eR~a~eQ--i»r-~~-~~i~~-~~~~~~~~--~e~7--~Re 
Qeliye~y--e~--~~~-~-~~--~a~~~--ea~e, incorporated 
nonprofit dental health centers, 
institutions incorporated as 
nonprofit corporations for the sale purpose of conducting medical 
research or 
for 
the purpose of establishing and maintaining 
Page l-LR2505(l) 
laboratories for scientific study and investigation in the field 
of biology or ecology or operating educational television or 
radio stations, schools, incorporated nonprofit organizations or 
their affiliates whose purpose is to provide literacy assistance 
or 
free 
clinical 
assistance 
to 
children 
with 
dyslexia 
and 
regularly organized churches or houses of religious worship, 
excepting sales, storage or use in activities that are mainly 
commercial 
enterprises. 
~Seaeels~--ffieaRs--iReeFpeFa~ea--ReRs~eek 
eaQea~ieRal--iRS~i~Q~ieRST--iRelQaiR~--iRS~i~Q~ieRS--effipeweFea--~e 
eeR~eF-~~~r-~J~~a~~--eF-~~-ae~~ee57--~&-~-a 
Fe~QlaF--fae~1~Yr-~~Fr~~~~-~-~~~-~-~--PQpiJ5--eF 
S~QaeR~s-J£-~~~~~~-~ae-Q5QaJ-~~-~--aaG-~aa~ 
keep-~-~~~~~~-~e-~~~-~-e~aeFs--r~~-~~~~~-aRa 
aeeep~ea--~r-~~~-~~-seaeels-~~-~~--~~~~~Ja~~-eF 
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seRe~i~-e~-aRy-iRaiyiaQalT 
Sec. 6. 36 MRSA §1760, sub-§19 is amended to read: 
19. 
Schools. Rental charged for living quarters, sleeping 
or housekeeping accommodations 
to any student necessitated by 
attendance at a school as-ae~iRea-iR-sQssee~ieR-le. 
Sec. 7. 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 Q 
portable elassFeeffis classroom for lease to 
seaeels-~-i~-l-ed--~e 
eHeffip~ieR--~--~.i,.o.n.--le 
a 
school. 
If the 
portable 
elaS5~eeffi5--aFe classroom is used for an otherwise taxable use 
within 2 years from the date of the first use, the lessor saall 
seeeffie is liable for ~ae use tax based on the original sale price. 
Sec. 8. 36 MRSA §1760, sub-§61, as amended by PL 1999, c. 414, 
§21, is further amended to read: 
61. 
Construction 
contracts 
with 
exempt 
organizations. 
Sales 
to 
a 
construction contractor 
or its subcontractor 
of 
tangible personal 
propertYT--t-o--a--G<Hl-&t--r-uo-t-.i,.o.n.--eeRt.Fae~eFT that 
aFe is to be physically incorporated in, and become a permanent 
part of, real property for sale to any organization or government 
agency provided exemption under this section, except as otherwise 
provided. 
Sec. 9. 36 MRSA §1760, sub-§64, as amended by PL 1995, c. 462, 
Pt. 8, §9, is further amended to read: 
64. 
Schools and school-sponsored organizations. 
Sales of 
tangible personal property and taxable services by PQsJi€--aRa 
p~iyat:e elementary and secondary schools t:aat:--o-t-he-r-w-Hre--Efaality 
as--&G~~&-~--~~~€€~J~--l~T and by student organizations 
sponsored by those schools, including booster clubs and student 
or parent-teacher organizations, as long as the profits from saea 
the 
sales 
are 
used 
to 
benefit 
those 
schools 
or 
student 
organizations or are used for a charitable purpose. 
Sec. 10. 36 MRSA §1760, sub-§76, as enacted by PL 1991, c. 
317, is amended to read: 
76. 
Aircraft parts. 
The sale or use in this State of 
replacement or repair parts of an aircraft i:e--t.-h-i-s--.st.-a-t.-e--wae:e 
used by a scheduled airline in the performance of service 
a:eae~ 
teae~al-~~-a-t.~~~~-t:ae-~J¥J~-~~~-g9a~ar-~~~-~-9F 
under 
United States 
Code, 
Seet:i9:e--l~11 Subtitle VII 
and 
Federal Aviation Administration regulations. 
Sec. 11. 36 MRSA §2903, sub-§4, as enac ted by PL 1997, c. 738, 
§4, is amended to read: 
4. 
Exemptions. 
'±ais--&li-B-S-ee1:.3,.9:e The tax imposed by this 
section does not apply to internal combustion engine fuel: 
A. 
Sold wholly for exportation from this State; 
B. 
Brought into this State in the ordinary standardized 
equipment fuel 
tank attached to 
and 
a 
part of 
a 
motor 
vehicle and used in the operation of that vehicle in this 
State; 
C. 
Sold in bulk to any political subdivision of this State; 
D. 
Bought or used by any person to propel jet or turbojet 
engine aircraft in international tli~at: flights; 
E. 
Brought 
into this 
State 
in 
the 
fuel 
tanks 
of 
an 
aircraft; or 
F. 
On which the collection of the tax 
imposed by this 
section is precluded by federal law or regulation. 
Sec. 12. 36 MRSA §3204-A, sub-§7, as amended by PL 1997, c. 
738, §ll, is further amended to read: 
7. 
Kerosene for retail sale. 
Kerosene prepackaged for home 
use or delivered into a separate tank for retail sale, in which 
case the excise tax must be remitted by licensed users pursuant 
to section 3207, rather than by the supplier; and 
Sec. 13. 36 MRSA §5122, sub-§I, llN, as repealed and replaced 
by PL 2003, c. 479, §2, is amended to read: 
N. 
With respect to property placed in service during the 
taxable 
year, 
an 
amount 
equal 
to 
the 
net 
increase 
in 
depreciation or expensing attributable to: 
(1) For taxable years beginning on or after January 1, 
2002 but prior to January 1, 
6GG§ 2006, 
a 
30'1-0 bonus 
depreciation deduction claimed by the taxpayer pursuant 
to Section 101 of the federal Job Creation and Worker 
Assistance Act of 2002, Public Law 107-147 with respect 
to property placed in service during the taxable year; 
(2) For taxable years beginning on or after January 1, 
2002 
but 
prior 
to 
January 
1, 
2006, 
a 
50% 
bonus 
depreciation deduction claimed by the taxpayer pursuant 
to Section 201 of the federal Jobs 
and Growth Tax 
Relief Reconciliation Act of 2003, Public Law 108-27 
with respect to property placed in service during the 
taxable year; and 
(3) For taxable years beginning on or after January 1, 
2003 but prior to January 1, 
2006, 
the increase in 
aggregate cost claimed under Section 179 of the Code 
pursuant to Section 202 of the federal Jobs and Growth 
Tax 
Relief 
Reconciliation 
Act 
of 
2003, 
Public 
Law 
108-27; 
Sec. 14. 36 MRS A §5122, sub-§2, llH, as amended by PL 2003, c. 
390, §32 and affected by §53, is further amended to read: 
H. 
For each taxable year subsequent to the year of the 
loss, 
an amount equal to the absolute value of the net 
operating loss arising from tax years beginning on or after 
January 1, 
1989, 
but before January 1, 
1993, 
for which 
federal adjusted gross income was increased in accordance 
with subsection L 
paragraph H, and the absolute value of 
the amount of any net operating loss arising from tax years 
beginning on or after January 1, 
2002, for which federal 
adjusted gross 
income 
was 
increased 
in 
accordance 
with 
subsection 1, paragraph H and that pursuant to the Code, 
Section 
was 
carried 
back 
for 
federal 
income 
tax 
purposes, 
less 
the absolute value of loss 
used in the 
taxable year of loss to offset any addition modification 
required by subsection 1, but only to the extent that: 
(1) 
Maine taxable income is not reduced below zero; 
(2) 
The taxable year is within the allowable federal 
period for carry-over; and 
(3) 
The 
amount has not been previously used as 
a 
modification pursuant to this subsection; 
Sec. 15. 36 MRSA §5200-A, sub-§I, ,N, as repealed and replaced 
by PL 2003, c. 479, §5, is amended to read: 
N. 
With respect to property placed 
taxable 
year, 
an 
amount 
equal 
to 
depreciation or expensing attributable 
in service during the 
the 
net 
increase 
in 
to: 
(1) For taxable years beginning on or after January 1, 
2002 but prior to January 1, 
6999 2006, 
a 
30°", bonus 
depreciation deduction claimed by the taxpayer pursuant 
to Section 101 of the federal Job Creation and Worker 
Assistance Act of 2002, Public Law 107-147 with respect 
to property placed in service during the taxable year; 
(2) For taxable years beginning on or after January 1, 
2002 
but 
prior 
to 
January 
1, 
2006, 
a 
50°'0 
bonus 
depreciation deduction claimed by the taxpayer pursuant 
to Section 201 of the federal Jobs 
and Growth Tax 
Relief Reconciliation Act of 2003, Public Law 108-27 
wi th respect to property placed in service during the 
taxable year; and 
(3) For taxable years beginning on or after January 1, 
2003 but prior to January 1, 
2006, 
the increase in 
aggregate cost claimed under Section 179 of the Code 
pursuant to Section 202 of the federal Jobs and Growth 
Tax 
Relief 
Reconciliation 
Act 
of 
2003, 
Public 
Law 
108-27; 
Sec. 16. 36 MRS A §5206-F, as enacted by PL 1997, c. 746, §19 
and affected by §24, is amended to read: 
§SZ06-F. 
Time for filing returns 
The 
franchise 
tax 
return 
required 
by 
section 
5220, 
subsection 6 must be filed on or before the 15th day of the 3rd 
month following the end of the financial institution's fiscal 
ye a r . 
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:eY-~Ris-see~ieR-~e!'-~iliB~-~he-!'eEQ!'BT 
Sec. 17. 36 MRS A §5227, as amended by PL 1997, c. 746, §22 
and affected by §24, is further amended to read: 
§5227. 
Time for filing returns 
The income tax return required by this Part must be filed on 
or before the date a federal income tax return, without regard to 
extension, is due to be filed. 
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eH~eRsieR-eE-~ime-€eF-€i±iJl.~-~Re-Fe~QFJl.T 
Sec. 18. 36 MRSA §5227-A is enacted to read: 
§5227-A. 
Requirement to file amended Maine returns 
1. 
Amended 
return required. 
A taxpayer shall 
file 
an 
amended Maine 
return as 
required in this Part whenever 
the 
taxpayer files an amended federal return affecting the taxpayer's 
liability under this Part, whenever the Internal Revenue Service 
changes or corrects any item affecting the taxpayer's liability 
under this Part or whenever for any reason there is a change or 
correction affecting the taxpayer's liability under this Part. 
2. 
Amended return filed. 
The amended Maine return must be 
filed within 90 days of the final determination of the change or 
correction or the filing of the federal amended return. 
3. 
Contents of amended return. 
The amended Maine return 
must indicate the change or correction and the reason for that 
change or correction. The amended return constitutes an admission 
as to the correctness of the change unless the taxpayer includes 
with the return a written explanation of the reason the change or 
correction is erroneous. If the taxpayer files an amended federal 
return, a copy of the amended federal return must be attached to 
the amended Maine return. 
4. 
Additional requirements. 
The State Tax Assessor may 
require additional information to be filed with the amended Maine 
return. The assessor may prescribe exceptions to the requirements 
of this section. 
Sec. 19. 36 MRSA §5243, as repealed and replaced by PL 1991, 
c. 546, §35, is repealed. 
Sec. 20. 36 MRSA §5278, sub-§4, as amended by PL 1989, c. 508, 
§24, is further amended to read: 
4. 
Notice of change or correction. 
If 
a 
taxpayer 
is 
required by section §64~ 5227 -A to file an amended Maine return, 
a claim for credit or refund of any resulting overpayment of the 
tax saa±± must be filed by the taxpayer within 2 years from the 
time the filing of the amended return was required. 
The amount 
of the credit or refund saa±± may not exceed the amount of the 
reduction in tax attributable to the federal amendment. 
This 
subsection saa±± ~ 
not affect the time wi thin which or the 
amount for which a claim for credit or refund may be filed apart 
from this subsection. 
Sec. 21. 36 MRSA §5311, sub-§3, as enacted by P&SL 1969, c. 
154, §F, is repealed. 
Sec. 22. 36 MRS A §5311, sub-§4, as enacted by PL 1977, c. 165, 
§7, is repealed. 
SUMMARY 
This bill makes the following changes to the laws governing 
taxation. 
The bill clarifies that the Department of Administrative and 
Financial 
Services, 
Bureau of 
Revenue 
Services 
must preserve 
electronically transmitted tax returns for at least 3 years, and 
that returns may be preserved in the form of digital images 
rather than microfilm reproductions. 
The bill adds definitions of "rural community health center" 
and "school" to the sales and use tax law, repeals language that 
is definitional in nature from the statute exempting these types 
of entities and repeals cross-references to the repealed language. 
The bill clarifies that the sales tax exemption for sales to 
contractors of materials that will be incorporated into real 
estate of an exempt entity includes sales to subcontractors. 
The bill replaces outdated references to federal laws and 
regulations governing air carriers from the sales tax exemption 
for parts used by scheduled airlines. The existing statute refers 
to regulations of the Civil Aeronautics Board, which no longer 
exists, and cites a federal law that has been repealed. 
The 
bill 
clarifies 
the 
application 
of 
provisions in the gasoline tax law. 
the 
exemption 
The bill expands the special fuel tax exemption for kerosene 
delivered to a separate tank for retail sale to include kerosene 
prepackaged for 
home 
use. 
The 
Bureau of Revenue Services is 
currently applying this interpretation administratively. 
The 
bill 
corrects 
the 
applicable 
tax 
years 
for 
the 
provisions relating to the modification of federal adjusted gross 
income for property eligible for federal bonus depreciation for 
individual income tax computation purposes. 
The bill adds a reference to net operating loss provisions 
for clarity and consistency with other statutory provisions. 
The bill deletes redundant provisions that require taxpayers 
to make timely payment of income and franchise taxes. 
The bill relocates an inappropriately placed requirement to 
file amended returns into the chapter of law governing the filing 
of returns, in order to clarify that amended returns are returns 
for 
purposes 
of 
determining 
the 
timeliness 
of 
assessments, 
requests for appeal and refund requests. 
The bill repeals a cross-reference to the provision repealed 
in the Maine Revised Statutes, Title 36, section 5227. 
The bill repeals a redundant statute authorizing the State 
Tax 
Assessor 
to 
name 
the assessor's 
employees 
as 
agents 
to 
collect income taxes. 
The bill also makes various grammatical changes.