An Act To Make Changes to the Laws Governing the Tax on Motor Fuel
Maine Legislature, Session 121, LD 0664
Committee: Transportation
Sponsors: McKENNEY, COLLINS
Amends: 36 MRSA §2903, 36 MRSA §3203

Legislative Document 
No. 664 
H.P.494 
House of Representatives, February 11, 2003 
An Act To Make Changes to the Laws Governing the Tax on Motor 
Fuel 
Reference to the Committee on Transportation suggested and ordered printed. 
Presented by Representative McKENNEY of Cumberland. 
Cosponsored by Representative: COLLINS of Wells. 
Printed on recycled paper 
77/~ 
/J7.1iJu~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §2903, sub-§I, as amended by PL 2001, c. 688, 
§l, is further amended to read: 
1. 
Excise 
tax 
imposed. 
An 
excise 
tax 
is 
imposed 
on 
internal combustion engine fuel used or sold wi thin this State, 
including sales to the State or a political subdivision of the 
State, at the rate of 6dS ~ 
per gallon, except that the rate is 
3.4¢ per gallon on internal combustion engine fuel, as defined in 
section 2902, bought or used for the purpose of propelling jet or 
turbojet engine aircraft. 
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Sec. 2. 36 MRSA §2903, sub-§I-C, as enacted by PL 2001, c. 
688, §3, is amended to read: 
I-C. 
Inventory tax. 
On the date that any increase in the 
rate of tax imposed under this chapter takes effect, an inventory 
tax is imposed by this subsection upon all internal combustion 
engine fuel that is held in inventory by a distributor or retail 
dealer as of the end of the day prior to that date with respect 
to which the tax imposed pursuant to subsection 1 has been paid. 
The 
inventory tax is computed 
by multiplying the 
number 
of 
gallons of tax-paid fuel held in inventory by the difference 
between 
the 
tax 
rate 
already 
paid 
and 
the 
new 
tax 
rate. 
Distributors and retail dealers that hold such tax-paid inventory 
shall make payment of the inventory tax on or before the 15th day 
of the next calendar month, accompanied by a form prescribed and 
furnished by the State Tax Assessor. 
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This 
section does 
not 
apply to 
internal combustion engine fuel purchased or used for the purpose 
of propelling jet or turbojet engine aircraft. 
Sec. 3. 36 MRSA §3203. sub-§I. as amended by PL 200L c. 688, 
§5, is further amended to read: 
1. 
Generally. 
Except as provided in section 3204-A, 
an 
excise tax is levied and imposed on all suppliers of distillates 
sold, on all retailers of low-energy fuel sold and on all users 
of special fuel used in this State for each gallon of distillate 
at the 
rate of 
6~S ~ per gallon and for 
each gallon of 
low-energy fuel based on the British Thermal Unit, referred to in 
this 
subsection 
as 
"BTU," 
energy 
content 
for 
each 
fuel 
as 
compared to gasoline. 
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Page l-LR0142(1) 
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aa~~s~ffieR~-p~~6~~R~-~~~~~-~~~~r--Appl~ea91e-S±Y These values 
are as follows. 
Fuel type 
Gasoline 
Methanol 
(M85) 
Ethano 
(E85) 
Propane 
B'TU content 
per gallon 
115,000 
65,530 
81,850 
84,500 
Compressed 
100,000 
Natural Gas (BTU per 100 
standard cubic 
feet) 
Formula 
(B'TU 
value fuel/ 
B'TU value 
gasoline) 
x tax rate 
gasoline 
Tax rate 
100q" x 6U ll.t. 6U ll.t. per 
gallon as 
authorized 
in section 
2903 
q" x n¢ ll.t. l6 ... §¢ ~ 
per 
gallon 
q" x 66¢ ll.t. 
±§ ... e¢ l1..t per 
gallon 
gb x 66¢ ll.t. le¢.lL.2l per 
gallon 
87~" x 66¢ ll.t. 
... l¢ ~ 
per 
standard 
cubic 
feet 
Sec. 4. 36 MRSA c. 465. as enacted by PL 2001, c. 
688, §8, is repealed. 
SUMMARY 
This bill does the following: 
1. 
It repeals the indexing of motor fuel tax rates; 
2. 
It increases the gasoline tax by 2i; 
3. 
It increase the special fuels tax by lc: and 
4. 
It eliminates the provision that allows credits on the 
inventory tax when the tax rate on motor fuels is reduced.