An Act To Modernize Maine's Tax Code
Maine Legislature, Session 122, LD 1587
Committee: Taxation
Sponsors: DUDLEY, STRIMLING, LERMAN, DAMON, NUTIING
Amends: 36 MRSA §5219-Y, 36 MRSA §6201, 36 MRSA §6207, 36 MRSA §6221, 30-A MRSA §5681, 36 MRSA §5111, 36 MRSA §511, 36 MRSA §1752, 36 MRSA §1760, 36 MRSA §2551, 36 MRSA §2552, 36 MRSA §2, 36 MRSA §1811, 36 MRSA §6652, 36 MRSA §6651

Legislative Document 
No. 1587 
H.P.1123 
House of Representatives, April 26, 2005 
An Act To Modernize Maine's Tax Code 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative DUDLEY of Portland. 
Cosponsored by Senator STRIMLING of Cumberland and 
'7r/~'1h.~ 
MILLICENT M. MacFARLAND 
Clerk 
Representative: LERMAN of Augusta, Senators: DAMON of Hancock, NUTIING of 
Androscoggin. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 36 MRSA §5219-Y is enacted to read: 
§5219-Y. 
Maine Residents Property Tax Program credit 
A refundable cr~j~ is_91low~~inst the taxes imposed by 
this Part in the amount of benefits allowed under chapter 907. 
This credit is not available if the taxpayer has filed a separate 
application for benefits under chapter 907. 
Sec. A-2. 36 MRSA §6201, sub-§ll-A, as amended by PL 2005, c. 
2, Pt. E, §2 and affected by §§7 and 8, is further amended to 
read: 
II-A. 
Rent 
constituting 
property 
taxes 
accrued 
for 
nonelderly household. 
"Rent constituting property taxes accrued 
for 
nonelderly household" 
means 
dQ% 
~ of 
the 
gross 
rent 
actually paid in cash or its equivalent in any tax year by a 
claimant and the claimant's household solely for the right of 
occupancy of their Maine homestead in the tax year and which rent 
constitutes the basis, in the succeeding calendar year, 
of a 
claim for relief under this chapter by the claimant. 
Sec. A-3. 36 MRSA §6207, sub-§l, as amended by PL 2005, c. 2, 
Pt. E, §4 and affected by §§7 and 8, is repealed. 
Sec. A-4. 36 MRS A §6207, sub-§l-A is enacted to read: 
I-A. 
8fmefit_c_alcul.ati~)ll------J!~nin9-..January L 
200Q1_f_9X 
~laimants representing a 
nonelderly household, 
the benefit is 
100% of that portion of the benefit base that exceeds 5'\ of 
income. 
Sec. A-5. 36 MRSA §6207, sub-§5 is enacted to read: 
5. 
Maximum benefit. 
The maximum benefit available under 
this section is $5,000. 
Sec. A-6. 36 MRSA §6221 is enacted to read: 
§6221. 
Income tax credit option 
A person eligible for benefits under this chapter may elect 
to receive those benefits as 
a credit against income tax as 
Page l-LR1638(1) 
... 
• 
• 
~ided in section 5219-Y if the credit is claimed on the 
claimant's annual income tax return. 
PARTB 
Sec. B-1. 30-A MRSA §5681, sub-§5, "A and B, as amended by PL 
2003, c. 20, Pt. W, §1, are further amended to read: 
A. 
For months beginning before July 1, 2005, 
5.1~; aRe 
B. 
For months beginning on or after July 1, 
2005, 
1mt. 
before October 1, 2005, 5.2~T~ 
Sec. B-2. 30-A MRSA §5681, sub-§5"e is enacted to read: 
C. 
For months beginning on or after October 1, 2005, 
8.5~. 
PARTe 
Sec. e-l. 36 MRSA §5111, sub-§I-B, as enacted by PL 1999, c. 
731, Pt. T, §3, is amended to read: 
I-B. 
Single individuals and married persons filing separate 
returns; tax years beginning 2005. 
For tax years beginning on or 
after January 1, 
6996 l.Q.Q..5., 
for single individuals and married 
persons filing separate returns: 
If Maine ~aHa9le taxable income is: 
Less than $4,200 
At least $4,200 but 
less than $8,350 
At least $8,350 but 
less than $16,700 
At 1~ $16,700 e~-me~e 
but less than $100,000 
$100,000 or more 
The tax is: 
2q", of the Maine 
taxable income 
$84 plus 4.5% of 
the excess over 
$4,200 
$271 plus 7~ of 
the excess over 
$8,350 
$856 plus 8.5~ 
of the excess 
over $16,700 
.s7,937 plus 10~ 
of the excess 
over $100,000 
Sec. C-2. 36 MRSA §511l, sub-§2-B, as enacted by PL 1999, c. 
731, Pt. T, §5, is amended to read: 
2-B. 
Beads of households; tax years beginning 2005. 
For 
tax 
years 
beginning on or after January 1, 
aQQa 
~, for 
unmarried 
individuals 
or 
legally 
separated 
individuals 
who 
qualify as heads of households: 
If Maine ~aHasle taxable income is: 
Less than $6,300 
At least $6,300 but 
less than $12,500 
At least $12,500 but 
less than $25,050 
At least $25,050 9F-m9Fe 
but less than $150,000 
$150,000 or more 
Sec. C-3. 36 MRSA §5111. sub-§3-B, as 
731, Pt. T, §7, is ~nended to read: 
The tax is: 
2°-0 of the Maine 
taxable income 
$126 plus 4.5% 
of the excess 
over $6,300 
$405 plus 7% of 
the excess over 
$12,500 
$1,284 plus 8.5% 
of the excess 
over $25,050 
$11,905 plus 10% 
of the excess 
over $150,000 
enacted by PL 1999, c. 
3-B. 
Individuals filing married joint return or surviving 
spouses; tax years beginning 2005. 
For tax years beginning on or 
after January 1, aQQa ~, for individuals filing married joint 
returns or surviving spouses permitted to file a joint return: 
If Maine ~aHaale taxable income is: 
Less than $8,400 
At least $8,400 but 
less than $16,700 
At least $16,700 but 
The tax is: 
2'l-0 of the Maine 
taxable income 
$168 plus 4.5°-0 
of the excess 
over $8,400 
$542 plus 7% of 
• 
less than $33,400 
A.t.._le.!;l£ $33,400 eJ;'-RleJ;'e 
but less than $200,000 
$200,000 or more 
the excess over 
$16,700 
$1,711 plus 8.5~ 
of the excess 
over $33,400 
$15.872 plus 10~ 
of the excess 
over $200,000 
Sec. C-4. 36 MRSA §S126, as amended by PL 2001, c. 583, §16, 
is repealed and the following enacted in its place: 
§5126. 
Personal exemptions 
For tax years beginning on or after January 1, 
2005, 
a 
~£iQent individual is allowed an amount for each exemption that 
is egual to the amount allowed for an exemption under the Code. 
Sec. CoS. 36 MRSA §S219-S, as amended by PL 2003, c. 20, Pt. 
GG, §1 is further amended to read: 
§5219-S. 
Earned income credit 
A taxpayer is allowed a ui.undaJU.e. credit against the taxes 
otherwise due under this Part equal to 
5% ~ of the federal 
earned income credit for the same taxable year, except that for 
tax 
years 
beginning in 
2003, 
2004 
and 
2005, 
the applicable 
percentage is 4.92% instead of 5%. 
~Re-€£eQ4~-~~-~~-~Re 
s~a~e-iBeeRle-~aH-~e-less-~RaB-BeJ;'eT 
Sec. C-6. 
Application. 
This 
Part 
applies 
to 
tax 
years 
beginning on or after January 1, 2005. 
PARTD 
Sec. D-l. 36 MRSA §1752. sub-§14, 1[8, as amended by PL 2003, 
c. 673, Pt. 
V, 
§16 and affected by §29, is further amended to 
read: 
B. 
"Sale price" does not include: 
(1) 
Discounts allowed and taken on sales; 
(2) 
Allowances in cash or by credit made 
upon the 
return of merchandise pursuant to warranty; 
(3) 
The price of property returned by customers, when 
the full price is refunded either in cash or by credit; 
(4) 
The price received for labor or services used in 
installing or applying or repairing the property sold, 
if separately charged or stated; 
(5) 
Any 
amount charged or collected, in lieu of a 
gratuity or tip, 
as 
a 
specifically stated service 
charge, when that amount is to be disbursed by a hotel, 
motel, restaurant or other eating establishment to its 
employees as wages; 
(6) 
The amount of any tax imposed by the United States 
on or wi th respect to retai 1 sales, whether imposed 
upon 
the 
retailer 
or 
the 
consumer, 
except 
any 
manufacturers', importers', alcohol or tobacco excise 
tax; 
(7) 
The cost of transportation from the retailer's 
place of business or other point from which shipment is 
made directly to the purchaser, provided that those 
charges are separately stated and the transportation 
occurs by means of common carrier, contract carrier or 
the United States mail; 
(8) 
The 
fee 
imposed 
by 
Title 
10, 
section 
1169, 
subsection 11; 
(9) 
The fee imposed by section 4832, subsection 1; e~ 
(10 ) 
The lead-acid battery deposit imposed by Title 
38, section 1604, subsection 2-BTL-QI 
(11, 
With respect to any fee for a taxable service, 
any 
portion 
of 
that 
fee 
representing 
direct 
reimbursement charged to the recipient of the taxable 
service for commodities or services previously paid by 
the person providing the service, as long as any tax on 
those commodities or services, if any tax applies, has 
been previously paid. 
Sec. D-2. 36 MRSA §1760, sub-§14 is repealed. 
Sec. D-3. 36 MRSA §1760, sub-§24 is amended to read: 
24. 
Funeral services. Sales of b~sic funeral 
services~Q.t 
exceeding $2,500 in valueL-t.hat ~ provided for the disposition 
or interment of a deceased human body. 
Sec. D-4. 36 MRSA §1760, sub-§34, as repealed and replaced by 
PL 1981, c. 163, §4, is repealed. 
Sec. D-5. 36 MRSA §2551, sub-§§l-A, I-B and l-e are enacted to 
read: 
I-A. 
Amusement 
apd~creational servi~s. 
"Amusement all.!:! 
recreational services" means any services provided in this State 
to the general public or through private clubs that involve 
exchanging a 
right of aCC1!.ss 
to any amusement. 
recreational. 
exhibitive, cultural or athletic activity for any user fee, price 
of admission, gate fee or eguivalent form of remuneration. 
I-B. 
Business 
ser~n. 
"Business 
services" 
means 
any 
services provided in this State to business consumers except 
those 
services 
that 
constitute 
an 
integral 
or 
inseparable 
component of any activity of the business consumer involving the 
manufacturing, 
fabrication, 
processing 
or 
manipulation 
of 
tangible personal 
pr~erty so 
that the 
business 
service is 
targeted to the unigue needs of the business consumer an.!:! is not 
transferable across a range of business activities. 
"Business 
services" includes, without limitation, such services as: 
A. 
Motor 
vehicJ!'l-pg..~king.,--2tb~th£.n metered space, in a 
lot or garage having 30 or more spaces: 
B. 
The leasing and renting of tangible personal property: 
.c. 
Employment~1!n.c'y_§.ervices of any kind, except when the. 
services are provided to an employer whose place of business 
is located in another state: 
D. 
Credit collection and credit reporting services: 
E. 
Secretarial, stenographic and editing services: 
F. 
Building 
mai.n.tJ:UU';\ll.cJ~.~P.njJ;.or ial and cleaning services, 
including window cleaning services: 
G. 
Office moving and installation: 
H. 
Document and record preservation and storage: 
I. 
Telephone answering services; 
J. 
Private 
investi_9.~ttj.Qp...L.-.p.9-troL 
building 
alarm 
and 
security and armored car services: 
K. 
Management 
consulting, 
advertising, 
information 
and 
public relations; 
L. 
Tax preparation; 
M. 
Financial 
accounting, 
financial 
management 
and 
investment counseling; 
N. 
Office and business machine repair; 
O. 
Sign construction and installation; 
P. 
Food catering and institutional food preparation and 
delivery; and 
O. 
Photocopying and document preparation and delivery. 
"Business services" does not include construction services. 
I-C. 
Construction services. 
"Construction services" means 
services provided in this State to the general public by a ~~L~~ 
engaged in the activity of building. 
"Activity of building" 
means 
an activity pertaining to any building, 
highway, 
road L 
railroad, excavation, manufactured building or other structure 
and 
involves 
any 
act 
of 
cQ~uction, alteratiQn, 
repair, 
substantial maintenance. improvement. movement or demolition. or 
the construction of scaffolding or other structures or 
work 
related to the activity of building. 
"Construction services" 
includes. but is not limited to, the services typically provided 
by building contractors. road and driveway contractor:.s~oncrete 
contractors, 
excavators, 
carpenters, 
masons, 
electricians, 
plumbers, roofers, siding applicators and house painters. 
Sec. D-6. 36 MRSA §2551, sub-§§5-A and 5-B are enacted to read: 
5-A. 
Lega,l services. 
services 
provided 
by 
an 
support staff. 
"Le..ggl services" means professional 
attorney-at-law 
and 
that attorney's 
5-B. 
Licensed 
profe&$-.ignal 
services. 
"Licensed 
p'rofessional services" means services provided in this State to 
the general public by a person holding a certificate, license, 
registration or other formal ruu:mission to perform, provide or 
practice 
the 
service 
in 
this 
State, 
and 
that 
certificate, 
license, 
registration 
or 
other 
formal 
permission 
is 
characteristically granted only when 
the person has 
obtained 
advanced 
education 
or 
specialized 
training. 
"Licensed 
p-rofessional 
services" 
includes, 
without 
limitation, 
such 
services as: 
A. 
Lobbying; 
• 
B. 
Architectural and design consulting: 
c. 
Legal services: 
D. 
Surveying~ __ ~a~nMd~ __ p~r~o~f~e~s~s~i~o~n~a~l~~eun~g~~~'n~e~e~r:i~n~g __ ~s~e~r~v~i~c~e~s~, 
including 
geological 
and 
hydrogeological 
consulting 
and 
consulting 
related 
to 
soil 
analysis 
and 
subsurface 
engineering: 
E. 
Arbitration: 
F. 
Appraisal services: and 
G. 
Accounting, 
financial 
investment 
and 
financial 
management. 
_'_'J .. icens..eLJrr~ional service~" does not include those services 
provided by health care practitioners. 
Sec. D-7. 36 MRSA §2551, sub-§7-A is enacted to read: 
7-A. 
Personal servi~es. 
"Personal services" means services 
provided in this State to the general public by a person of 
specialized skill, 
talent 
or 
experience. 
Personal 
services 
characteristically involve the provision of attendant care to the 
recipient of the service or care or maintenance or repair of the 
recipient's 
real 
or 
personal 
property. 
"Personal 
services" 
includes, without limitation, such services as: 
A. 
Personal atten9ant services, inCluding, but not limi~ 
to, 
barbering, 
cosmetology, 
manicuring, 
tattooing, 
body 
piercing, 
massage, 
reflexology, 
tanning 
and exercise or 
fitness services; 
B. 
Laundering and dry cleaning; 
C. 
Painting, papering and interior decorating: 
D. 
Jewelry, camera, watch and gun cleaning and repair; 
E. 
Pet grooming and kennel services; 
F. 
Musical instrument tuning and repair: 
G. 
Swimming 
pool 
ins tall ation, 
repair, 
cleaning 
and 
maintenance; 
H. 
Radio, television and sound system repair: 
I. 
Furniture, rug and upholstery cleaning and repair: 
J. 
Locksmith services: 
K. 
Personal prQperty and self-storage servi!;e.SJ including 
storage and mooring for noncommercial watercraft: 
L. 
Washing, cleaning, polishing, lubrication, painting and 
detailing motor vehicles: 
M. 
Disinfestation and pest extermination or control: 
N. 
Landscaping, 
lawn care, 
grounds maintenance and tree 
removal: 
o. 
Photography and photographic studio services: 
P. 
Printing, 
imprinting, 
pain~ing or 
lett~~ing tangible 
personal property for persons who furnish tangible personal 
property for that service: 
o. 
Any 
fabrication, 
printing or production of tangible 
personal 
pr~rty by 
spekLal 
order 
wh~n~~t~h~a~t~~t~a~n=g~ib~l~e 
personal property is not intended for resale; 
R. 
Repair of noncommercial watercraft; 
s. 
Dance instruction and dan!;e studio services; 
T. 
Dating, escort and personal introduction services; 
~U~. __ ~F~l~o~w~e~r __ ~o~r~~b~a±l±l~o~o~nL-~d~e~l~ivLXe~r*y __ ~s~e~~rLv~~~·c~e~s __ ~a~n~d~~s~e~rv.ic~~ 
similarly 
provided 
as 
a 
demonstration 
of 
personal 
appreciation: 
V. 
Limousine services: 
W. 
Taxidermy; 
x. 
Flight instruction; and 
Y. 
Antigue and art auctioning and dealership services. 
"Personal services" does not include construction services. 
Sec. D-S. 36 MRSA §2552, sub-§l, 1J1rF and G, as enacted by PL 
2003, c. 673, Pt. V, §25 and affected by §29, are amended to read: 
.. 
.. 
F. 
The 
installation, 
maintenance 
or 
repair 
of 
teleco~munications equipment; aRa 
G. 
Private nonmedical institution servicesT~ 
Sec. D-9. 36 MRSA §2SS2, sub-§l, "U, I, J and K are enacted to 
read: 
H. 
Amusement and recreational services: 
I. 
Business services; 
J. 
Licensed professional services; and 
K. 
Personal services. 
Sec. D-I0. 36 MRSA §2SS2, sub-§3 is enacted to read: 
3. 
Continge~ee. When a taxable service is provided for 
a 
fee that is 
continge~ an ultimate award, settlement or 
similar financial result and the fee is a certain percentage of 
that ultimate award or settlement. the fee that is ultimately 
paid is deemed to include the applicable tax. 
Sec. D-l1. 36 MRSA §2SS7, sub-§§29 and 30, as enacted by PL 
2003, c. 673, Pt. V, §25 and affected by §29, are amended to read: 
29. 
Centers 
for 
innovation. 
Sales 
to 
centers 
for 
innovation as described in Title 5, section 13141; aRa 
30. 
Sales for resale. 
Sales of services to another service 
provider for resaleT; and 
Sec. D-12. 36 MRSA §2SS7, sub-§31 is enacted to read: 
31. 
Ce~in leg~!U7"vic.es. 
Legal services provided on a 
pro bono basis, all legal services provided by court appointment 
_a...n.Q all leg~ervices p~~ed to a client without substantial 
assets of any kind whose household income from all sources is 
leJli! than 200% of the federal poverty level during the period 6 
months prior to the initiation of the legal service or during the 
period 6 months subsequent to the initiation of the legal service 
as such a determination can be reasonably calculated, whichever 
analysis yields the lesser income. 
PARTE 
Sec. E-l. 36 MRSA §1811, first" 
as amended by PL 
2001, c. 
439, Pt. TTTT, §2 and affected by §3, is further amended to read: 
A tax is imposed on the value of all tangible personal 
property and taxable services sold at retail in this State. 
The 
rate of tax is 
7% 
on the value of liquor sold in licensed 
establishments as defined in Title 28-A, section 2, subsection 
15, in accordance with Title 28-A, chapter 43; 
1% 
10% on the 
value of rental of living quarters in any hotel, rooming house or 
tourist or trailer camp; 10% on the value of rental for a period 
of less than one year of an automobile; 
7% 
on the value of 
prepared food; 
and 
5% 
on 
the 
value 
of all other tangible 
personal property and taxable services. 
Value is measured by the 
sale price, except as otherwise provided. 
PARTF 
Sec. F-l. 36 MRSA §6652, sub-§l, as amended by PL 2003, c. 
391, §12, is further amended to read: 
1. 
Generally. 
A person 
against 
whom 
taxes 
have 
been 
assessed pursuant to Part 2, except for chapters III and 112, 
with respect to eligible property and who has paid those taxes is 
entitled to 
reimbursement of 
those 
taxes 
from 
the 
State as 
provided in this chapter. 
~amount of reimbursement is limited 
to 70% of the amount by which the taxes paid with respect to the 
eligible property exceeds the amount that has been or will be 
returned to the taxpayer by a municipality due to the taxpayer's 
participation in a municipal development district under Title 
30-A, chapter 206. 
For purposes of this chapter, a tax applied 
as a credit against a tax assessed pursuant to chapter III or 112 
is a 
tax assessed pursuant to chapter III or 112. 
Eligible 
property is subject to reimbursement pursuant to this chapter for 
up to 12 property tax years, but the 12 years must be reduced by 
one year for each year during which a taxpayer included the same 
property in its investment credit base under section 5219-D, 
5219-E or 5219-M and claimed the credit provided in one or more 
of those sections on its income tax return, and reimbursement may 
not be made for taxes assessed in a year in which one or more of 
those credits is taken. 
A successor in interest of a person 
against whom taxes have been assessed with respect to eligible 
property is entitled to reimbursement pursuant to this section, 
whether 
the tax 
was 
paid by 
the person assessed or by the 
successor, as long as a transfer of the property in question to 
the successor has occurred and the successor is the owner of the 
property as of August 1st T 
of the year in which a 
claim for 
reimbursement 
may 
be 
filed 
pursuant 
to 
section 
6654. 
For 
purposes of this paragraph, "successor in interest" includes the 
initial successor and any subsequent successor. 
When an eligible 
successor in interest exists, the successor is the only person to 
• 
whom reimbursement under this chapter may be made with respect to 
the transferred property. 
PARTG 
Sec. G-I. 36 MRSA §6651, sub-§2-A is enacted to read: 
2-A. 
Honq1@lified service. 
"Nongualified service" means 
any service engaged in within this State for another person or 
persons for a fee, reLainer, commission or other considera~ 
~clusive of 
activities 
engaged 
in 
for 
an 
employer 
by 
an 
employee, 
including 
but 
not 
limited 
to 
business 
services, 
professional 
services. 
personal 
services 
and 
recreational 
services. 
"Nongualified service" does not include any gualified 
~ervice and does n~c..l~ny of the following services or an-y 
activity 
conducted 
predominantly 
in 
support 
of 
either 
the 
services or business activity related to those services: 
A. 
Production as defined in section 1752, subsection 9-B: 
B. 
Fabrication 
services 
as 
defined 
in 
section 
2551, 
subsection 3: 
C. 
Wood harves.ti.n9----21lerations anq 
gravel. oil, gas or other natural 
severed from the soil or water: and 
the 
severanC~Q_L_f;Lg!lJ;JL 
resources produced or 
D. 
Commercial 
agricultural 
productiQn. 
cQmrrH~.rci.Q.l 
aguacultural production and commercial fishing as defined in 
section 2013, subsection 1. 
Activities 
conducted 
by 
a 
person in support of 
any of 
the 
services listed in paragraphs A to D or any gualified service 
engaged 
in 
by 
that 
person 
include, 
without 
limitation, 
management, 
administration, 
marketing, 
purchasing. 
design, 
engineering, 
repair, 
maintenance, 
operation 
of 
support 
and 
auxiliary equipment. distribution, accounting, finance, billing, 
payroll, 
workers' 
compensation. 
accounts 
payable, 
accounts 
receivable. medical services, risk management. labor relations, 
training, 
human resources, 
legal services. packaging, storage, 
res~rch and 
development, 
guality control 
and 
environmental, 
security, safety and fire protection. 
Sec. G-2. 36 MRSA §6651, sub-§§4 and 5 are enacted to read: 
4. 
Qualified sery_i~~ualified service" means any of the 
following when provided by one person to another for 
a 
fee, 
~tainer. 
commission 
Qr 
other 
consideration: 
construction 
services: printing; retail or wholesale services exclusive of 
Page l2-LR1638(1) 
those 
performed 
at 
or 
in 
support 
of 
retail 
facilities: 
modification of real or tangible personal property: deve.lopment 
of computer software: leasing by a lessor of property that would 
be eligible for reimbursement u.nder thi~ chap~~~<LJ:JJ.~QP-~:r;:ty 
been 
owned 
by 
the 
lessee 
rather 
than 
the 
lessor L-----.S.ervices 
provided by a financial institution as defined in section 5206-D, 
~ubsection 8: services provided by credit unions authorized to do 
business in this State pursuant to Title 
9-B, 
section 131, 
.fLUbs.e..c~iQn 12-A: 
service~--PJ'_Qvided by 
~_Qs_ura.nce c01!lpanit'ULAupject 
to taxation under chapter 357: Internet access services; computer 
~ystem services, 
including 
but 
not 
limited 
to 
maintenance, 
support, 
development, 
management, 
operation, 
communication, 
~raining, 
help 
desk, 
data 
prQcessing, 
research, 
anillsi~ 
troubleshooting and similar services involving computer systems; 
repair, 
maintenance, 
refitting, 
refurbishing 
or 
upgrading 
commercial or military watercraft and all maChinery, equipment 
and other property attached tQ or located on such watercraft and 
related 
to 
the 
use 
of 
such watercraft; 
and 
transportation 
services. 
"Qualified service" also includes any activity by a 
person 
engaged 
in 
a 
qualified 
service 
that 
is 
conducted 
predQminantly in support of either the qualified service engaged 
in by that pe.rson Qr the business activity Qf that person related 
to that qualified service. 
5. 
Retail sales (ilc;...ility. 
"Retail sales faciIi ty" means a 
physical structure or portion thereof located in the State and 
Q.redominantly used as 
a facility to serve cus_tomers who 
are 
physically present at the facility for the purpose of purchasing 
goods or a nonqualified service at retail. 
Sec. G-3. 36 MRSA §6652, sub-§l-B, 1[B, as amended by PL 2003 t 
c. 625, §1 and affected by §3 and amended by c. 687, Pt. A, §10 
and affected by Pt. B, §11, is further amended to read: 
B. 
Lamps and lighting fixtures; aa. 
Sec. G-4. 36 MRSA §6652, sub-§l-B, 1IC, as enacted by PL 2003, 
c. 625, §2 and affected by §3 and enacted by c. 687, Pt. A, §11 
and affected by Pt. B, §ll, is repealed and the following enacted 
in its place: 
C. 
Gamblin...g _m.9-_c.hilles or devices, 
incIJ!Q.~n9' but not Um,l. ted 
to, 
electronic 
video 
machines, 
specifically designed or 
manufactured for use in the operation of an.Y...-.9.Q,.mbling or 
wagering activity. 
As 
used in 
th~aragraph,~ambling 
machine or devic~_means any device, machine, parapb1trnalig 
or equipment that is used or usable in the playing phases of 
any gambling activity, whether that activity consists of 
gambling between persons or gambling by a person involving 
the playing of a machine, including equipment used in the 
.. 
• 
read: 
playing 
phases 
Qf 
lQttery 
schemes. 
"Electronic 
videQ 
machi~~.haJL~e same meaning as in Title 17, section 330, 
subsectiQn I-Ai and 
Sec. G-5. 36 MRSA §6652, sub-§l-B"n is enacted tQ read: 
D. 
A slQt machine and associated equipment, as thos~erms 
are defined in Title 8, section 1001, and any part thereof, 
and any device or machine used directly and primarily in the 
operation or 
use 
of 
a 
slot machine, 
including but not 
limited to printing mechanisms, 
video 
display monitors, 
metering devices and computer equipment. 
Sec. G-6. 36 MRSA §6652, sub-§l-B, "E and F are enacted to 
E. 
Property 
pr~inantly employed 
by 
the 
person 
in 
possession of that property either in the .provision of a 
nonqualified service or in support of the provision Qf a 
llilllil~ified 
service 
being 
provided 
by 
that 
persQn, 
exclusive of property used 
by 
a 
person in providing 
a 
nonqualified service to 
an affiliate when that property 
would be eligible for reimbursement if it were owned by that 
affiliate: and 
F. 
Property employed by the person in pos~ion of th_at 
property either in 
a 
retail sales facility or employed 
predominantly in the support of such a facility. 
Property 
employed in support of a retail sales facility does not 
include 
property 
employed 
predominantly 
in 
one 
or 
more 
qualified services or in one or more of the services listed 
in section 6651. subsection 2-A, paragraphs A to D by any 
person, or in any activity in support of or the business 
activity of that person related to such qualified services 
or listed services. 
Paragraphs A and B a'pply to property tax years beginning after 
April 1, 1996. 
PrQperty affected by paragraphs A and B that was 
eligible fQr reimbursement pursuant tQ chapter 915 of prQperty 
taxes paid for the 1996 property tax year is grandfathered into 
the program and continues to be eligible fQr reimbursements fQr 
up 
tQ 
prQperty tax years, 
unless it subsequently becomes 
ineligible. 
Paragraphs 
E and 
F 
apply to property tax years 
beginning after April 1, 2005. 
PXQperty affected by paragraphs E 
and F that was eligible fQr reimbursement under this chapter for 
property 
taxes 
paid 
for 
the 
2005 
property 
tax 
year 
is 
grandfathered into the program and continues to be eligible for 
reimbursement to lliL-extent 
p~rmitted by this chapter as that 
property existed on April 1, 2005, unless it subsequently becQmes 
ineligible. 
Property used in the prQyision Qf a nonqualified 
service or in support of tb~-prQvision of a 
nong:ualif~LfH~rvice, 
an_Q.---p-roperty used i~j!t_QJ_Lsales faciU,~ or in support of a, 
retail sales facility includes, without limitation, property u$ed 
in 
man~_~ent, 
mark~tj~gJ __ purchasing, 
distribution, 
accounting 
and research and development. 
Sec. G-7. Application. 
That section of this Part that repeals 
and replaces the Maine Revised Statutes, Title 36, section 6652, 
subsection 
l-B, 
paragraph 
C 
applies 
to 
property 
tax 
years 
beginning on or after April 1, 2004. 
Sec. G-8. Retroactivity. 
amend 
the 
Maine 
Revised 
Those sections 
Statutes, 
Title 
of this Part that 
36, 
section 
6652, 
subsection I-B, paragraph B; repeal and replace Title 36, 
6652, subsection I-B, paragraph C; 
and enact Title 36, 
6652, subsection I-B, paragraph D apply retroactively to 
3, 2004. 
section 
section 
January 
SUMMARY 
Part A affects the Maine Residents Property Tax Program, the 
so-called "circuit breaker program," by: 
1. 
Changing the tax-to-income threshold to 
100% of the 
benefit base that exceeds 5% of income; 
2. 
Increasing the maximum rebate to $5,000; 
3. 
Increasing the renter rebate to 25%; and 
4. 
Allowing persons to use the income tax form to file for 
a refundable credit. 
Part B increases from 5.1"0 to 8.5% the percentage of sales 
and income tax revenues transferred to the Local Government Fund 
for revenue sharing. 
Part C reforms the income tax by increasing the personal 
exemption amount to equal the federal 
amount, 
increasing the 
earned income credit and making it refundable and creating a 10% 
income tax bracket for income of $100,000 or more for single 
filers, $150,000 or more for persons filing as heads of household 
and $200,000 for persons filing married joint returns. 
Part D includes, 
in the services subject to the service 
provider tax, amusement and recreational, business, personal and 
professional services. 
Under this bill, the provision of those 
services is subject to 
the 
5'1-0 
tax. 
The 
term 
"construction 
services" is also defined for 
the purpose of distinguishing 
• 
.. 
nontaxable 
construction 
services 
from 
taxable 
personal 
or 
business services. 
Part D eliminates the sales tax exemption for 
sa1es of 
short-term publications. 
It also limits the exemption on funeral 
services 
and 
repeals 
the 
exemption 
on 
coin-operated vending 
machine sales. 
I t also amends the law by creating an exemption 
for certain legal services provided to low-income clients. 
Part E increases the sales tax on lodging from 7% to 10%. 
Part 
F 
reforms 
the business 
equipment 
tax 
reimbursement 
(BETR) 
program by limiting state reimbursement to 70% of the 
taxes paid on eligible property reduced by the amount of tax 
reimbursement received for the property through a tax increment 
financing agreement . 
. 
Part G provides that, for property first placed in service 
in property tax years beginning after April 1, 
2005, property 
used in, 
or in support of, 
the provision of 
a 
nonqualified 
service or 
a retail sales facility is not eligible for 
BETR 
reimbursement. 
Part G corrects a numbering problem created by Public Law 
2003, 
chapters 
and 
687, 
which 
enacted 
substantively 
different provisions with the same paragraph designation. 
Part G 
also makes the provisions retroactive to January 3, 
2004, 
the 
effective date of chapter 687. 
Part G also corrects a conflict .