An Act To Enhance the Collection of Tax Arrearages
Maine Legislature, Session 121, LD 1217
Committee: Taxation
Sponsors: McLAUGHLIN, BROMLEY, BOWLES, LERMAN, MILLS, SUSLOVIC, HALL, MARTIN
Amends: 36 MRSA §175-A, 36 MRSA §176-A, 36 MRSA §177

Legislative Document 
No. 1217 
H.P.891 
House of Representatives, March 6, 2003 
An Act To Enhance the Collection of Tax Arrearages 
Reference to the Committee on Taxation suggested and ordered printed. 
7f/~/J1.~ 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative McLAUGHLIN of Cape Elizabeth. 
Cosponsored by Senator BROMLEY of Cumberland and 
Representatives: BOWLES of Sanford, LERMAN of Augusta, MILLS of Farmington, MILLS 
of Cornville, SUSLOVIC of Portland, Senators: HALL of Lincoln, MARTIN of Aroostook. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36MRSA§174, as amended by PL 2001, c. 583, §4, is 
repealed. 
Sec. 2. 36 MRSA §175-A, sub-§3. as amended by PL 1997, c. 526, 
§10, is further amended to read: 
3. 
Enforcement. 
The lien provided for by subsection 1 may 
be enforced at any time in accordance with section 176-B after 
the tax liability with respect to which the lien arose becomes 
collectible under section 173, subsection 1 by a civil action 
brought by the Attorney General in the name of the State in the 
Superior Court of the county in which the property is located to 
subject any property, of whatever nature, in which the taxpayer 
has any right, title or interest, to the payment of such tax or 
1iabili ty. 
The court shall, after the parties have been duly 
notified 
of 
the 
action, 
proceed 
to 
adjudicate 
all 
matters 
involved in the action and finally determine the merits of all 
claims to and liens upon the property and, in all cases where a 
claim or interest of the State therein is established, may decree 
a sale of the property by the proper officer of the court and a 
distribution of 
the 
proceeds 
of 
such 
sale 
according to 
the 
findings of the court. 
If the property is sold to satisfy a lien 
held by the State, the State may bid at the sale such sum, not 
exceeding the amount of that lien plus expenses of sale, as the 
assessor directs. 
Sec. 3. 36 MRSA §176-A. sub-H6. as amended by PL 1997, c. 
526, §13, is repealed and the following enacted in its place: 
16. 
Time for collection of taxes. 
Taxes imposed by this 
Title must be collected by levy in accordance with section 176-B 
or before the expiration of the period of collection agreed upon 
in writing by the assessor and the taxpayer. 
Other obligations 
owed to the State and authorized to be collected by the bureau 
must be collected by levy within 10 years 
from the time the 
obligation arises. 
The period agreed upon may be extended by 
subseguent agreements in writing made before the expiration of 
the period previously agreed upon. 
Sec. 4. 36 MRSA §§176-B and 176-C are enacted to read: 
§176-B. 
Collection of tax arrearages 
1. 
Collection after assessment. 
When the assessment of a 
tax imposed by this Title has been made within the period of 
limitation for that tax, the tax may be collected by levy or by a 
proceeding in court, but only: 
A. 
If the levy or warrant is made or the proceeding begun 
within 10 years after the assessment of the tax; or 
B. 
If: 
(1) 
There is 
an installment agreement 
between 
the 
taxpayer and the assessor, prior to the date that is 90 
days after the expiration of any period for collection 
agreed upon in writing by the assessor and the taxpayer 
at the time the installment agreement was entered into; 
or 
(2) 
There is a release of levy or warrant after the 
10-year period, pr ior to the expiration of any period 
for collection agreed upon in writing by the assessor 
and the taxpayer before that release. 
If a proceeding is properly commenced in court for the collection 
of a tax, the period during which that tax may be collected by 
levy or warrant must be extended and may not expire until the 
liability for the tax or a judgment against the taxpayer arising 
from that liability is satisfied or becomes unenforceable. 
2. 
Date when levy or warrant is considered made. 
The date 
on which a levy or warrant on property or rights to property is 
made pursuant to this section is the date on which the seizure is 
effected. 
§176-C-
Suspension of rnnning of period of limitation 
1. 
Definitions. 
As 
used 
in this 
section, 
unless 
the 
context 
otherwise 
indicates , 
the 
following 
terms 
have 
the 
following meanings. 
A. 
"Designated 
summons" 
means 
any 
summons 
issued 
for 
purposes of determining the amount of any tax imposed by 
this Title if: 
(1) 
The 
issuance of the 
summons is preceded by 
a 
review of the issuance by the general counsel of Maine 
Revenue Services; 
( 2) 
The summons is issued at least 60 days before the 
day on which the period prescribed in section l76-B for 
the 
assessment 
of 
such 
tax 
expires, 
including 
any 
extensions; and 
(3) 
The summons clearly states that it is a designated 
summons for purposes of this section. 
A summons that relates to any return may not be treated as a 
designated summons if a prior summons that relates to that 
return was treated as a designated summons for purposes of 
this section. 
B. 
"Judicial enforcement period" means, with respect to any 
summons, the period that: 
(1) 
Begins on the day on which a court proceeding with 
respect to a designated summons is brought; and 
(2) 
Ends 
on 
the 
day 
on 
which 
there 
is 
a 
final 
resolution as to the summonsed person's response to the 
designated summons. 
C. 
"Period of limitations" means the period of limitations 
provided in section 176-B on the making of assessments or 
the collection by levy or a proceeding in court, in respect 
of any deficiency relating to any taxes imposed by the State. 
z. 
ISSuance of notice of deficiency. 
After the mailing of 
a notice of deficiency, the running of the period of limitations 
is suspended: 
A. 
For the period during which the assessor is prohibited 
from making the assessment or from collecting by levy or a 
proceeding in court; and 
B. 
If a proceeding in respect of the deficiency is placed 
on the docket of any state court, until the decision of the 
applicable state court becomes final, and for 60 days after 
the effective date of that decision. 
3. 
Co~rations. If a notice in respect of a deficiency ln 
tax imposed by Part 4 
for 
any taxable year is mailed to 
a 
corporation, 
the suspension of the 
running of 
the period of 
limitations provided in subsection 
applies 
in the case of 
corporations with which that corporation made 
a 
consolidated 
income tax return for that taxable year. 
4. 
Assets of taxpayer in control or custody of court. 
The 
period of limitations on collection after assessment is suspended 
for the period the assets of the taxpayer are in the control ox 
custody of the court in any proceeding before any court of the 
United States or of any state or of the District of Columbia, and 
for 6 months after the release or discharge of those assets. 
5. 
Taxpayer outside United States. 
The 
running 
f 
the 
period of limitations on collection after assessment is suspended 
for the period during which the taxpayer is outside the Uniteg 
States if that period of absence is for a continuous period of at 
least 6 months. If the running of the period of limitations is 
suspended pursuant to this subsection, the period of limitations 
does 
not expire until the later of the date 
the period of 
limitations is scheduled to expire and 6 months after the date of 
return of the taxpayer to the United States. 
6. 
Extensions of time for 
p~nt of estate tax. 
The 
running of the period of limitations for collection of any tax is 
suspended for the period of any extension of time for payment 
granted under provisions of state law. 
7. 
Wrongful levy of property of 3rd party. 
The running of 
the period of limitations is suspended for a period equal to the 
period: 
A. 
Beginning with the date property, including money, of a 
3rd party is wrongfully levied, seized or received by the 
assessor; and 
B. 
Ending on the earlier of the date: 
(1) 
The 
assessor 
returns 
the property pursuant 
to 
section l7S-A; and 
( 2) 
Thirty days after the date on which a 
judgment 
secured pursuant to section 176-A, subsection IS with 
respect to that property becomes final. 
The running of the period of limitations is suspended under this 
subsection only with respect to the amount of the assessment 
equal to the amount of money or the value of specific property 
returned. 
8. 
Wrongful lien. 
In the case of an assessment for which a 
lien 
was 
made 
on 
property, 
the 
running 
of 
the 
period 
of 
limitations is suspended for a period equal to the period: 
A. 
Beginning on the date any person becomes entitled to a 
certif icate 
under 
section 
S-A 
with 
respect 
to 
that 
property; and 
B. 
Ending on the date that is 30 days after the earlier of: 
(1) 
The earliest date on which the State Tax Assessor 
no 
longer 
holds 
any 
amount 
as 
a 
deposit 
or 
bond 
provided under section 17S-A by reason of that deposit 
or bond being used to satisfy the unpaid tax or being 
refunded or released; and 
(2) 
The date any judgment secured against the State 
relating to or arising out of the wrongful lien becomes 
final. 
The running of the period of limitations is suspended under this 
subsection only with respect to the amount of the assessment 
equal to the value of the interest of the State in the property 
plus interest, penalties, additions to the tax and additional 
amounts attributable to that interest, penalties and additions to 
the tax. 
9. 
Bankruptcy cases. 
For a 
case under Title 11 of the 
United States Code, the running of the period of limitations on 
the making of assessments or collection is suspended for the 
period during which the assessor is prohibited by reason of that 
case from making the assessment or collection and an additional 
period of: 
A. 
For assessment, 60 days thereafter; and 
B. 
For collection, 6 months thereafter. 
10. 
Extension 
in 
case 
of 
designated 
summons. 
If 
a 
designated summons is issued by the assessor to a corporation or 
limited liability company, or to any other person to whom the 
corporation or limited liability company has transferred records, 
with respect to a 
tax return by that corporation or limited 
liability company for a taxable year or other period for which 
that 
corporation or limited liability company is being examined 
by the bureau, the running of 
a period of limitations on the 
assessment of that tax is suspended: 
A. 
During a judicial enforcement period: 
(1) With respect to that designated summons; or 
(2) 
With respect to any other summons that is issued 
during the 30-day period that begins on the date on 
which the designated summons is issued and that relates 
to the same return as that designated summons; and 
B. 
During the l20-day period beginning with the 1st day 
after the close of the suspension of the limitation period 
under paragraph A, 
if the court in a 
judicial proceeding 
requires 
any 
compliance 
with 
a 
summons 
referred 
to 
ln 
paragraph A. 
If paragraph B does not apply, 
the period of limitations expires 
days after the close of the suspension of the period under 
paragraph A. 
, 
f , 
Sec. 5. 36 MRSA §177. sub-§l. as amended by PL 1999, c. 708, 
§9, is further amended to read: 
1. 
Generally. 
All sales 
and use taxes collected by 
a 
person pursuant to Part 3, all taxes collected by a person under 
color of Part 3 that have not been properly returned or credited 
to the persons from whom they were collected, all taxes collected 
by or imposed on a person pursuant to chapter 451 or 459, all 
fees collected pursuant to chapter 719 and all taxes collected by 
a person pursuant to chapter 827 constitute a special fund in 
trust for the State Tax Assessor. 
The liability for the taxes or 
fees and the interest or penalty on taxes or fees is enforceable 
by assessment and collection, in the manner prescribed in this 
Part, 
against the 
person and 
against 
any officer, 
director, 
member, agent or employee of that person who, in that capacity, 
is responsible for the control or management of the funds or 
finances of that person or is responsible for the payment of that 
person's taxes. 
An assessment against a responsible individual 
pursuant to this section must be made wi thin 
e--y-e-<H"-6--f.~-t.Re 
aaEe-B£-~~-~-reE~rR-B£-~~~-~~-Ea*e6-w~€-~~~~-B&-ge 
re~eFt.ea--was--fi±ea the time period prescribed in section l76-B. 
An assessment pursuant to this section may be made at any time 
wi th respect to a time period for which a return has become due 
but has not been filed. 
SUMMARY 
This bill repeals the current process for the collection of 
tax 
arrearages 
and 
instead enacts 
a 
process 
similar to 
the 
process 
for 
the 
collection 
of 
federal 
taxes, 
including 
establishing a 10-year period of limitations for the assessment 
or collection of taxes. 
The period of limitations is stayed by 
certain events, such as bankruptcy and the taxpayer being outside 
of the United States.