An Act To Broaden the Sales Tax Base and Lower the Sales and Use Tax and Service Provider Tax Rates
Maine Legislature, Session 122, LD 1437
Committee: Taxation
Sponsors: PERCY, STRIMLING, PERRY, DAVIS, GREELEY, HOTHAM, SMITH, TARDY, THOMPSON, WATSON
Amends: 36 MRSA §1752, 36 MRSA §1760, 36 MRSA §1765, 36 MRSA §1811, 36 MRSA §1863, 36 MRSA §1864, 36 MRSA §2012, 36 MRSA §2013, 36 MRSA §2014, 36 MRSA §2551, 36 MRSA §2557

Legislative Document 
No. 1437 
H.P.1001 
House of Representatives, March 22, 2005 
An Act To Broaden the Sales Tax Base and Lower the Sales and Use 
Tax and Service Provider Tax Rates 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative PERCY of Phippsburg. 
11/~ 
/f7.7J2et£~ 
MILLICENT M. MacFARLAND 
Clerk 
Cosponsored by Senator STRIMLING of Cumberland, Senator PERRY of Penobscot and 
Representatives: DAVIS of Falmouth, GREELEY of Levant, HOTHAM of Dixfield, SMITH 
of Monmouth, TARDY of Newport, THOMPSON of China, WATSON of Bath. 
Printed on recycleJ paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §1752, sub-§14, 1JB, 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; 
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empleyees-as-wa§esf 
(6) 
The amount of any tax imposed by the United States 
on or with respect to retail sales, whether imposed 
upon 
the 
retailer 
or 
the 
consumer, 
except 
any 
manufacturers', importers', alcohol or tobacco excise 
tax; 
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~he-Yai~eQ-S~ates-mailf 
(8) 
The 
fee 
imposed 
by 
Title 
10, 
section 
1169, 
subsection 11; 
(9) 
The fee imposed by section 4832, subsection 1; or 
(10) 
The lead-acid battery deposit imposed by Title 
38, section 1604, subsection 2-B. 
Sec. 2. 36 MRSA §1760, sub-§2, as amended by PL 1997, c. 729, 
Pt. A, §1, is repealed. 
.. 
Sec. 3. 36 MRSA §1760, sub-§3, as amended by PL 1991, c. 824, 
Pt. A, §73, is repealed. 
Sec. 4. 36 MRS A §1760, sub-§4, as amended by PL 1967, c. 89, 
is repealed. 
Sec. 5. 36 MRSA §1760, sub-§5 is repealed. 
Sec. 6. 36 MRSA §1760, sub-§5-A, as amended by PL 1975, c. 
623, §57, is repealed. 
Sec. 7. 36 MRSA §1760, sub-§6, as amended by PL 1999, c. 502, 
§§l to 3 and PL 2003, c. 689, Pt. B, §6, is repealed. 
Sec. 8. 36 MRSA §1760, sub-§7, as amended by PL 1997, c. 550, 
§l, is repealed. 
Sec. 9. 36 MRSA §1760, sub-§8, as amended by PL 1991, c. 546, 
§18, is repealed. 
Sec. 10. 36 MRSA §1760, sub-§9, as amended by PL 1977, c. 686, 
§l, is repealed. 
Sec. 11. 36 MRSA §1760, sub-§9-A, as enacted by PL 1973, c. 
594, is repealed. 
Sec. 12. 36 MRSA §1760, sub-§9-B, as amended by PL 1999, c. 
657, §21, is repealed. 
Sec. 13. 36 MRSA §1760, sub-§9-C, as enacted by 
PL 
1977, 
c.686, §2, is repealed. 
Sec. 14. 36 MRSA §1760, sub-§9-D, as amended by PL 1999, c. 
414, §20, is repealed. 
Sec. 15. 36 MRS A §1760, sub-§9-G, as enacted by PL 1991, c. 
851, §l, is repealed. 
Sec. 16. 36 MRSA §1760, sub-§12 is repealed. 
Sec. 17. 36 MRSA §1760, sub-§12-A, as amended by PL 1995, c. 
634, §l and affected by §2, is repealed. 
Sec. 18. 36 MRSA §1760, sub-§14 is repealed. 
Sec. 19. 36 MRSA §1760, sub-§16, as amended by PL 2003, 
c. 
689, Pt. B, §6 and c. 705, §4 and affected by §14, is repealed. 
Sec. 20. 36 MRSA §1760, sub-§§17 and 18 are repealed. 
Sec. 21. 36 MRSA §1760, sub-§18-A, as amended by PL 1975, c. 
293, §4 and PL 2003, c. 689, Pt. B, §6, is repealed. 
Sec. 22. 36 MRSA §1760, sub-§19, as amended by PL 
I) 0 3, c. 
588, §7, is repealed. 
Sec. 23. 36 MRSA §1760, sub-§20, as amended by PL 1991, c. 
546, §20, is repealed. 
Sec. 24. 36 MRSA §1760, sub-§21, as amended by PL 1995, c. 
640, §5, is repealed. 
Sec. 25. 36 MRSA §1760, sub-§22, as amended by PL 1995, c. 65, 
Pt. A, §141 and affected by §153 and Pt. C, §15, is repealed. 
Sec. 26. 36 MRSA §1760, sub-§23-C, as affected by PL 2003, c. 
614, §9; amended by c. 688, Pt. B, §12; and affected by §13, is 
repealed. 
Sec. 27. 36 MRSA §1760, sub-§24 is repealed. 
Sec. 28. 36 MRSA §1760, sub-§25, as amended by PL 1999, c. 
708, §27 and affected by §52, is repealed. 
Sec. 29. 36 MRSA §1760, sub-§25-A, as affected by PL 2 :)03, c. 
614, §9; amended by c. 695, Pt. B, §25; and affected by Pt. C, 
§1, is repealed. 
Sec. 30. 36 MRSA §1760, sub-§25-B, as amended by PL 2003, c. 
414, Pt. B, §63 and affected by c. 614, §9, is repealed. 
Sec. 31. 36 MRSA §1760, sub-§26, amended by PL 1997, c. 723, 
§1, is repealed. 
Sec. 32. 36 MRSA §1760, sub-§28, as amended by PL 1999, c. 
708, §28; PL 2001, c. 354, §3; and PL 2003, c. 689, Pt. B, §6, is 
repealed. 
Sec. 33. 36 MRSA §1760, sub-§29, as amended by PL 1989, c. 
890, Pt. A, §10 and affected by §40, is repealed. 
Sec. 34. 36 MRSA §1760, sub-§30, as amended by PL 1989, c. 
890, Pt. A, §11 and affected by §40, is repealed. 
Sec. 35. 36 MRSA §1760, sub-§31, as amended by PL 2003, c. 20, 
Pt. Z, §1, is repealed. 
Sec. 36. 36 MRSA §1760, sub-§32, as amended by PL 1997, c. 
557, Pt. D, §2 and affected by §4 and Pt. G, §1, is repealed. 
Sec. 37. 36 MRSA §1760, sub-§33, as repealed and replaced by 
PL 1977, c. 238, is repealed. 
Sec. 38. 36 MRSA §1760, sub-§34, as repealed and replaced by 
PL 1981, c. 163, §4, is repealed. 
Sec. 39. 36 MRSA §1760, sub-§35, as amended by PL 1993, c. 
670, §2, is repealed. 
Sec. 40. 36 MRSA §1760, sub-§37, as amended by PL 1987, c. 
737, Pt. C, §§82 and 106; PL 1989, c. 6; c. 9, §2; and c. 104, 
Pt. C, §§8 and 10, is repealed. 
Sec. 41. 36 MRSA §1760, sub-§39, as enacted by PL 1977, c. 
686, §3, is repealed. 
Sec. 42. 36 MRSA §1760, sub-§40, as repealed and replaced by 
PL 1987, c. 497, §37, is repealed. 
Sec. 43. 36 MRS A §1760, sub-§41, as amended by PL 1999, c. 
759, §3 and affected by §4, is repealed. 
Sec. 44. 36 MRSA §1760, sub-§42, as amended by PL 2001, c. 
439, Pt. PPP, §1 and affected by §2, is repealed. 
Sec. 45. 36 MRSA §1760, sub-§43, as amended by PL 1983, c. 
828, §6, is repealed. 
Sec. 46. 36 MRSA §1760, sub-§44, as reallocated by PL 1983, c. 
562, is repealed. 
Sec. 47. 36 MRSA §1760, sub-§45, as amended by PL 1999, c. 
708, §29, is repealed. 
Sec. 48. 36 MRSA §1760, sub-§46, as repealed and replaced by 
PL 2003, c. 451, Pt. AA, §1, is repealed. 
Sec. 49. 36 MRSA §1760, sub-§47-A, as corrected by RR 1995, c. 
2, §95, is repealed. 
Sec. 50. 36 MRSA §1760, sub-§49, as repealed and replaced by 
PL 1999, c. 499, §1, is repealed. 
Sec. 51. 36 MRSA §1760, sub-§50, as enacted by PL 1983, c. 
859, Pt. M, §§6 and 13, is repealed. 
Sec. 52. 36 MRSA §1760, sub-§51, as repealed and replaced by 
PL 1985, c. 737, Pt. A, §95, is repealed. 
Sec. 53. 36 MRSA §1760, sub-§52, as enacted by PL 1985, c. 
737, Pt. A, §96, is repealed. 
Sec. 54. 36 MRS A §1760, sub:§53, as enacted by PL 1985, c. 
737, Pt. A, §97, is repealed. 
Sec. 55. 36 MRSA §1760, sub-§55, as enacted by PL 1985, c. 
788, §1, is repealed. 
Sec. 56. 36 MRSA §1760, sub-§56, as amended by PL 1989, c. 
533, §7, is repealed. 
Sec. 57. 36 MRSA §1760, sub-§57, as enacted by PL 1987, c. 
343, §5, is repealed. 
Sec. 58. 36 MRSA §1760, sub-§58, as amended by PL 2003, c. 
588, §8, is repealed. 
Sec. 59. 36 MRSA §1760, sub-§59, as amended by PL 1989, c. 
700, Pt. A, §169, is repealed. 
Sec. 60. 36 MRSA §1760, sub-§60, as amended by PL 1997, c. 
545, §1, is repealed. 
Sec. 61. 36 MRSA §1760, sub-§61, as amended by PL 2003, c. 
588, §9, is repealed. 
Sec. 62. 36 MRSA §1760, sub-§62, as repealed and replaced by 
PL 1989, c. 502, Pt. A, §129, is repealed. 
Sec. 63. 36 MRSA §1760, sub-§63, as enacted by PL 1989, c. 
502, Pt. A, §130, is repealed. 
Sec. 64. 36 MRSA §1760, sub-§64, as amended by PL 2003, 
c. 
588, §10, is repealed. 
Sec. 65. 36 MRSA §1760, sub-§65, as amended by PL 1993, c. 
670, §6, is repealed. 
.. 
Sec. 66. 36 MRSA §1760, sub-§66, as enacted by PL 1989, c. 
502, Pt. B, §47 and c. 581, §20 and repealed and replaced by c. 
871, §12, is repealed. 
Sec. 67. 36 MRSA §1760, sub-§67, as enacted by PL 1989, c. 
501, Pt. p, §30 and c. 533, §8 and repealed and replaced by c. 
871, §13, is repealed. 
Sec. 68. 36 MRS A §1760, sub-§69, as enacted by PL 1989, c. 
533, §8, is repealed. 
Sec. 69. 36 MRSA §1760, sub-§70, as enacted by PL 1989, c. 
533, §8 and amended by c. 871, §14, is repealed. 
Sec. 70. 36 MRSA §1760, sub-§71, as enacted by PL 1989, c. 
533, §8, is repealed. 
Sec. 71. 36 MRSA §1760, sub-§72, as amended by PL 1999, c. 
708, §30, is repealed. 
Sec. 72. 36 MRSA §1760, sub-§§73, 74 and 75, as enacted by PL 
1989, c. 871, §15, are repealed. 
Sec. 73. 36 MRS A §1760, sub-§76, as amended by PL 2003, c. 
588, §11, is repealed. 
Sec. 74. 36 MRSA §1760, sub-§77, as enacted by PL 1993, c. 
532, §1, is repealed. 
Sec. 75. 36 MRS A §1760, sub-§78, as repealed and replaced by 
PL 1997, c. 725, §1, is repealed. 
Sec. 76. 36 MRSA §1760, sub-§79, as enacted by PL 1997, c. 
791, Pt. A, §2, is repealed. 
Sec. 77. 36 MRS A §1760, sub-§80, as enacted by PL 1999, c. 
286, §1, is repealed. 
Sec. 78. 36 MRSA §1760, sub-§81, as enacted by PL 1999, c. 
530, §10, is repealed. 
Sec. 79. 36 MRS A §1760, sub-§82, as reallocated by RR 1999, c. 
1, §48, is repealed. 
Sec. 80. 36 MRSA §1760, sub-§83, as reallocated by RR 1999, c. 
1, §49, is repealed. 
Sec. 81. 36 MRSA §1760, sub-§84, as enacted by PL 2001, c. 95, 
§6, is repealed. 
Sec. 82. 36 MRSA §1760, sub-§85, as reallocated by RR 2001, c. 
1, §45, is repealed. 
Sec. 83. 36 MRSA §1760, sub-§§86 and 87, as amended by PL 2003, 
c. 688, Pt. D, §3, are repealed. 
Sec. 84. 36 MRSA §1765, as amended by PL 1999, c. 518, §2, is 
repealed. 
Sec. 85. 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; 7% 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 --9% 
2°-t> on the value of all other tangible personal property 
and taxable services. 
Value is measured by the sale price, 
except as otherwise provided. 
Sec. 86. 36 MRSA §1811, last" as repealed and replaced by PL 
2003, c. 510, Pt. C, §12 and affected by §13, is amended to read: 
Rental or lease of an automobile for one year or more must 
be taxed at the time of the lease or rental transaction at -9% 2~ 
of the following: 
the total monthly lease payment multiplied by 
the number of payments in the lease or rental, the amount of 
equity involved in any trade-in and the value of any cash down 
payment. 
Collection 
and 
remittance 
of 
the 
tax 
is 
the 
responsibility 
of 
the 
person 
that 
negotiates 
the 
lease 
transaction with the lessee. 
Sec. 87. 36 MRSA §1863, as enacted by PL 1981, c. 503, is 
repealed. 
Sec. 88. 36 MRSA §1864, as enacted by PL 2001, c. 439, Pt. 
II, §1 and affected by §2, is repealed. 
Sec. 89. 36 MRSA §2012, as amended by PL 1967, c. 88, is 
repealed. 
Sec. 90. 36 MRSA §2013, as amended by PL 2001, c. 396, §24, 
is repealed. 
Sec. 91. 36 MRSA §2014, as enacted by PL 1983, c. 560, §§4 
and 6, is repealed. 
Sec. 92. 36 MRSA §2551, sub-§§I-A to I-F, 3-A, 4-A, 5-A, 5-B, 7-A, 
12-A, 18-A and 20-A are enacted to read: 
A. 
Administrative and support services. 
"Administrative 
and support services" includes purchases of office administrative 
services, 
facilities 
support 
services, 
employment 
services, 
business 
support services, 
travel arrangement 
and reservation 
services, 
investigation 
and 
security 
services, 
services 
to 
buildings 
and 
dwellings, 
waste 
management 
and 
remediation 
services and all other support services. 
II 
" 
I-B. 
Amusement 
and recreation services. 
"Amusement 
and 
recreation services" includes theater and opera performances, 
movies, 
pari-mutuel 
racing 
net 
receipts, 
spectator 
sporting 
events, 
commercial 
participant 
amusements 
and 
all 
other 
recreation services. 
I-C. 
Apparel 
services. 
"Apparel 
services" 
includes 
cleaning, storage and repair of clothing and shoes. 
I-D. 
Business and legal services. 
"Business 
and legal 
services" 
means 
tax preparation services, 
legal services 
and 
other personal business services. 
I-E. 
Construction 
services. 
"Construction 
services" 
includes 
residential 
building, 
commercial 
and 
institutional 
building, manufactyring and indystrial building, water, sewer and 
pipeline construction services. 
I-F. 
Education services. 
"Edycation services" 
includes 
consumer 
pyrchases of 
services 
from 
elementary 
and 
secondary 
schools, private and pyblic schools of higher education, nursery 
schools and commercial and vocational school§. 
3-A. 
Financial services. 
"Financial 
§ervices" 
includes 
medical 
care 
and 
hospitalization 
insurance, 
income 
loss 
in§urance, 
wQrkers' 
compen§ation insyrance, 
brokerage charges, 
investment counseling fee§, bank §ervice charge§, tru§t services, 
safe depo§it box fees, 
services furnished without payment by 
financial intermediaries, expense§ of handling life insurance and 
pension plan§, 
motor 
vehicle 
in§urance, 
nondepo§itory credit 
intermediation 
and 
related 
activitie§, 
§ecurities, 
commodity 
contracts, 
investments, 
monetary 
authoritie§ 
and 
depository 
credit intermediation. real e§tate §erviceQ and rental leasing 
activities. 
4-A. 
Health services. 
"Health service§" includes consumer 
purchases 
of 
services 
from 
dentists, 
hospitals, 
physicians, 
nursing home§ and other profe§§ional medical service providers. 
5-A. 
Information services. 
"Information services" includes 
services from newspaper publishers, periodicals publishers. book 
publi§hers, database publishers, directory and other publishers, 
software publishers, motion picture and video industries, sound 
recording industries, radio and television broadcasters, 
cable 
networks and program distributors, data proce§sing businesses and 
other providers of information services. 
5-B. 
Management and enterprise services. 
"Management and 
enterprise 
services" 
includes 
services 
related 
to 
the 
administration, oversight and management of other establishments 
of a company or enterprise. 
1-A. 
Personal appearance services. 
"Personal 
appearance 
services" includes barber shops, beauty parlors and health clubs. 
l2-A. 
Professional. 
scientific 
and 
technical 
services. 
"Professional, scientific and technical services" includes legal 
services, accounting and bookkeeping services, architectural and 
engineering 
services, 
specialized 
design 
services, 
custom 
~puter 
programming, 
computer 
systems 
design, 
other 
computer-related 
services, 
facilities 
management 
services, 
management consulting services, environmental and other technical 
consulting 
services, 
scientific 
research 
and 
development 
services, advertising and related services, veterinary services, 
and other professional, scientific and technical services. 
l8-A. 
Social 
and 
o rganiz_ation 
services. 
"Social 
and 
organization 
services" 
includes 
consumer 
purchases 
of 
professional 
association 
memberships, 
club 
and 
fraternal 
organization 
memberships, 
domestic 
services, 
other 
household 
operations 
services 
and 
religious 
and 
welfare 
activities, 
including donations to such organizations. 
20-A. 
Transportation 
and 
warehousing 
services. 
"Transportation and warehousing services" includes airline, bus, 
railroad, 
truck, 
watercraft, 
limousine, 
toll 
road, 
pipeline, 
postal, courier, messenger, warehousing and storage services. 
Sec. 93. 36 MRS A §2552, sub-§l, as enacted by PL 2003, c. 673, 
Pt. V, §25 and affected by §29, is amended to read: 
1. Rate. 
A. tax at the rate of - -S% 
20/0 is imposed on the 
value of the following services sold in this State: 
A. 
Extended cable television services; 
B. 
Fabrication services; 
C. 
Rental of video media and video equipment; 
D. 
Rental of furniture, 
audio media and audio equipment 
pursuant to a rental-purchase agreement as defined in Title 
9-A., section 11-105; 
E. 
Telecommunications services; 
F. 
The 
installation, 
maintenance 
or 
repair 
of 
telecommunications equipment; aBa 
.. 
G. 
Private nonmedical institution servicesTL 
H. 
Personal appearance services: 
I. 
Apparel services; 
J. 
Business and legal services; 
K. 
Amusement and recreation services; 
L. 
Health services; 
M. 
Education services: 
N. 
Social and organization services; 
O. 
Financial services; 
P. 
Professional, scientific and technical services; 
O. 
Administrative and support services; 
R, 
Information services; 
S. 
Transportation and warehousing services; 
T. 
Construction services; and 
U. 
Management and enterprise services. 
Sec. 94. 36 MRSA §2557, sub·§l, as enacted by PL 2003, c. 673, 
Pt. V, §25 and affected by §29, is amended to read: 
1. 
Exemptions by constitutional provisions. 
Sales that 
this State is prohibited from taxing under the constitution or 
laws of the United States or under the constitution of this 
State; IDl!l 
Sec. 95. 36 MRSA §2557, sub·§§2 to 29, as enacted by PL 2003, 
c. 673, Pt. V, §25 and affected by §29, are repealed. 
Sec. 96. 
Revisor's review; cross·references. 
The 
Revisor 
of 
Statutes shall review the Maine Revised Statutes and include in 
the errors 
and inconsistencies bill submitted to 
the 
Second 
Regular Session of the 122nd Legislature pursuant to Title 1, 
section 94 
any sections necessary to correct and update any 
cross-references in the statutes to provisions of law repealed in 
this Act. 
SUMMARY 
This bill repeals exemptions, credits and refunds under the 
sales and USe tax and the service provider tax and lowers the 
rate of those taxes from 5% to 2%. 
Page ll-LR0156(1)