An Act To Phase Out the Tax on Business Equipment
Maine Legislature, Session 121, LD 0983
Committee: Taxation
Sponsors: BLAIS, BERUBE, SHOREY
Amends: 5 MRSA §13070-J, 36 MRSA §662, 36 MRSA §6664

Legislative Document 
No. 983 
S.P.324 
In Senate, February 25, 2003 
An Act To Phase Out the Tax on Business Equipment 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Senator BLAIS of Kennebec. 
Cosponsored by Representative BERUBE of Lisbon and 
JOY J. O'BRIEN 
Secretary of the Senate 
Senator: SHOREY of Washington, Representati ve: V A UGHAN of Durham. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 5 MRSA §13070-J, sub-§l, ~D, as corrected by RR 200l, 
c. 2, Pt. A, §ll, is amended to read: 
D. 
"Economic development incentive" means: 
(1) 
Assistance from Maine Quality Centers under Title 
20-A, chapter 43l-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 
915. 
This 
subparagraph is repealed April 1, 2010; 
(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 §662 is enacted to read: 
§662. 
Certain personal property used in business 
1. 
Definitions. 
As 
used 
in this 
section, 
unless 
the 
context 
otherwise 
indicates, 
the 
following 
terms 
have 
the 
following meanings. 
A. 
"Business property" 
means 
tangible personal property 
~ 
(1) 
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 
the 
intended to be used exclusively for a business purpose 
by the person who will possess that property; and 
(2) Either: 
(a) 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 
(b) 
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 111 has been paid or any watercraft registered 
for use on state waters on which a tax assessed pursuant to 
chapter 112 has been paid. 
B. 
"Inventory parts" 
includes repair parts, 
replacement 
parts, 
replacement 
eguipmenL 
additions, 
accessions 
and 
accessories 
on 
hand 
but 
not 
in 
service 
and 
stocks 
or 
inventor ies of repair parts, replacement parts, replacement 
eguipment, additions, accessions and accessories on hand but 
not in service if acguired after April 1, 2005, regardless 
of when placed in service. 
2. 
Phaseout of tax on business property. 
An exemption from 
personal 
property 
tax 
levied pursuant 
to 
this 
Part 
is 
provided under this subsection for a percentage of the just value 
of business property according to the following: 
A. 
Beginning April 1, 2005, 
20'1-0 of the just value of the 
business property is exempt; 
B. 
Beginning April 1, 2006, 
40'1-0 of the just value of the 
business property is exempt; 
C. 
Beginning April 1, 2007, 
60'\, of the just value of the 
business property is exempt; 
D. 
Beginning April 1, 2008, 
80'\, of the just value of the 
business property is exempt; and 
E. 
Beginning April 1, 2009, 
100'1-0 of the just value of the 
business property is exempt. 
3. 
Reimbursement 
to 
municipalities. 
The 
State 
shall 
reimburse municipalities for 
revenue lost as 
a 
result of the 
operation of this section according to the procedure established 
in section 661. 
Sec.3. 36 MRSA §6664 is enacted to read: 
§6664. 
Repeal 
This chapter ~s repealed April 1, 2010. 
SUMMARY 
This 
bill provides 
an 
exemption 
of 
20'\, 
from 
personal 
property taxation on business property beginning April 1, 
2005 
and increases that exemption by the same amount each year until 
the business property is completely exempt beginning April 1, 
2009. 
Under 
the 
requirements 
of 
the Constitution of 
Maine, 
Article IV, Part Third, Section 23, 
the State is required to 
reimburse each municipality 50'\, of the property tax revenue loss 
suffered by that municipality as a result of this bill. 
This 
bill 
also 
repeals 
the 
business 
equipment 
tax 
reimbursement program in 2010, since business property is exempt 
from personal property taxation beginning April 
1, 
2009 
and 
businesses currently have one year to file for reimbursement. 
•