An Act To Improve the Viability of Railroads Operating in Maine
Maine Legislature, Session 121, LD 1918
Committee: Taxation
Amends: 36 MRSA §1760

Legislative Document 
No. 1918 
S.P.757 
In Senate, March 9, 2004 
An Act To Improve the Viability of Railroads Operating in Maine 
Reported by Senator STANLEY of Penobscot for the Joint Standing Committee on 
Taxation pursuant to Public Law 2003, chapter 498, section 11 and Resolve 2003, chapter 101, 
section 3. 
Reference to the Committee on Taxation suggested and ordered printed under Joint Rule 
218. 
Printed on recycled paper 
JOY J. O'BRIEN 
Secretary of the Senate 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §1760, sub-§8"n is enacted to read: 
D. 
Motor 
fuel 
purchased 
and 
used 
for 
the 
purpose 
of 
powering railroad locomotives. 
Sec. 2. 36 MRS A §1760, sub-§41, as amended by PL 1999, c. 759, 
§3 and affected by §4, is further amended to read: 
41. 
Certain instrumentalities of interstate 
or 
foreign 
commerce. The sale of a vehicle, 
~ai~~eae-~e~~ia~-6~eekT aircraft 
or watercraft that is placed in use by the purchaser as an 
instrumentality of interstate or foreign commerce within 30 days 
after that sale and that is used by the purchaser not less than 
80% of the time for the next 2 years as an instrumentality of 
interstate or foreign commerce. 
The State Tax Assessor may for 
good cause extend for not more than 60 days the time for placing 
the instrumentality in use in interstate or foreign commerce. For 
purposes of this subsection, property is "placed in use as an 
instrumentality 
of 
interstate 
or 
foreign 
commerce" 
by 
its 
carrying of, or providing the motive power for the carrying of, a 
bona fide payload in interstate or foreign commerce, or by being 
dispatched to a specific location at which it will be loaded upon 
arrival with, or will be used as motive power for the carrying 
of, a payload in interstate or foreign commerce. For purposes of 
this subsection, "bona fide payload" means a cargo of persons or 
property 
transported 
by 
a 
contract 
or 
common 
carrier 
for 
compensation that exceeds the direct cost of carrying that cargo 
or pursuant to a legal obligation to provide service as a public 
utility or a 
cargo of property transported in the reasonable 
conduct of 
the purchaser's 
own 
nontransportation business in 
interstate commerce. 
Sec.3. 36 MRSA §1760, sub-§41-A is enacted to read: 
41-A. 
Certain railroad rolling stock used in interstate or 
foreign commerce. 
The sale of: 
A. 
Railroad rolling stock that is placed in use by the 
purchaser, 
or 
by 
a 
lessee, 
as 
an 
instrumentality 
of 
interstate or foreign commerce wi thin 30 days after that 
sale, or within 30 days after the commencement of the lease, 
and that is used by the purchaser or by the lessee not less 
than 
80% 
of 
the 
time 
for 
the 
next 
years 
as 
an 
instrumentality of 
interstate or 
foreign 
commerce. 
The 
State Tax Assessor may for good cause extend for not more 
than 60 days the time for placing the instrumentality in use 
in interstate or foreign commerce. 
For purposes of this 
SUbsection, property is "placed in use as an instrumentality 
Page l-LR2699(l) 
of interstate or foreign commerce" by its carrying of, or 
providing the motive power for the carrying of, a bona fide 
payload in interstate or foreign 
commerce, 
or 
by being 
dispatched to a specific location at which it will be loaded 
upon arrival with, or will be used as motive power for the 
carrying of, a payload in interstate or foreign commerce. 
For purposes of this subsection, "bona fide payload" means a 
cargo of persons or property transported by a contract or 
common carrier for compensation that exceeds the direct cost 
of carrying that cargo or pursuant to a legal obligation to 
provide service as a public utility or a cargo of property 
transported in the reasonable conduct of the purchaser's own 
nontransportation business in interstate commerce; and 
B. 
Parts 
and 
attachments 
that 
are 
intended 
to 
become 
attached to or part of railroad rolling stock described in 
paragraph A and that are attached to or installed on the 
railroad rolling stock in the State, regardless of when the 
railroad rolling stock was acguired. 
Sec. 4. Effective date. 
This Act takes effect July 1, 2005. 
SUMMARY 
This bill is reported out by the Joint Standing Committee on 
Taxation pursuant to Public Law 
2003, 
chapter 498. 
The bill 
proposes to 
amend the sales 
and use 
tax 
laws 
applicable to 
railroads to exempt from sales and use tax motor fuel used for 
powering 
railroad 
locomotives 
and 
parts 
and 
attachments 
for 
otherwise exempt railroad rolling stock. 
The bill also extends 
the exemption for railroad rolling stock used in interstate and 
foreign commerce to include leases of railroad rolling stock.