An Act To Make Minor Substantive Changes to the Tax Laws
Maine Legislature, Session 122, LD 1711
Committee: Taxation
Sponsors: WOODBURY, PERRY, McCORMICK
Amends: 29-A MRSA §525, 36 MRSA §113, 36 MRSA §115, 36 MRSA §1752, 36 MRSA §1760, 36 MRSA §2557, 36 MRSA §2560, 36 MRSA §3204-B, 36 MRSA §4062, 36 MRSA §4063, 36 MRSA §4063-A, 36 MRSA §4064, 36 MRSA §4064-A, 36 MRSA §4071, 36 MRSA §4072, 36 MRSA §4366-A, 36 MRSA §5122, 36 MRSA §6664

Legislative Document 
No. 1711 
H.P.1218 
House of Representatives, December 20, 2005 
An Act To Make Minor Substantive Changes to the Tax Laws 
Submitted by the Department of Administrative and Financial Services pursuant to Joint 
Rule 204. 
Received by the Clerk of the House on December 14,2005. Referred to the Committee on 
Taxation pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 401. 
Presented by Representative WOODBURY of Yarmouth. 
Cosponsored by Senator PERRY of Penobscot and 
Representative: McCORMICK of West Gardiner. 
Printed on recycled paper 
'7Jl~ frl.17!d£~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 29-A MRSA §525, sub-§14 is enacted to read: 
14. Venue. 
A violation of this section is deemed to have 
been committed in part at the principal office of the Secretary 
of State. 
Prosecution under this section may be in the county 
where the act to which the proceeding relates occurred or in 
Kennebec County. 
Sec. 2. 36 MRSA §113, sub-§4 is enacted to read: 
4. Recording fees. 
The State Controller may transfer from 
the General Fund amounts authorized by the State Tax Assessor 
equal to the fees imposed upon the State by a register of deeds 
pursuant to Title 33, section 751. These amounts transferred must 
be deposited into a 
dedicated, 
nonlapsing account to be used 
solely for the purpose of paying those fees. Interest earned on 
balances in the account accrue to the account. The assessor shall 
notify the State Controller of the amounts to be transferred 
pursuant to this subsection. 
Sec. 3. 36 MRSA §115 is enacted to read: 
§115. Payment by credit card 
The State Tax Assessor may establish procedures permitting 
payment of taxes by the use of credit cards. The assessor mmt 
contract with one or more entities for the purpose of enabling 
the assessor to accept and process credit card transactions only 
if under any such contract the State does not incur any charges 
or fees from accepting payment by credit card, the State does not 
have any liability to the credit card company or processor from 
nonpayment 
of 
credit card charges 
by 
the 
taxpayer, 
any 
fee 
associated with payment of taxes by credit card is disclosed to 
the 
taxpayer 
prior 
to 
commencement 
of 
the 
transaction 
and 
directly charged to the taxpayer and collected by the processorL 
all credit card payments are electronically transmitted to 
tll~ 
State by the processor immediately upon approval of the credit 
transaction and 
the processor retains all responsibility for 
approving or rejecting all proposed credit card payments. 
Sec. 4. 36 MRSA §1752, sub-§l-D, as amended by PL 
2005, 
c. 
218, §12, is further amended to read: 
I-D. 
Casual 
sale. 
"Casual 
sale" 
means 
an 
isolated 
transaction in which tangible personal property or 
a 
taxable 
service is sold other than in the ordinary course of repeated and 
successive transactions of like character by the person making 
the sale. "Casual sale" includes transactions at a bazaar, fair, 
Page l-LR2951(1) 
rummage sale, picnic or similar event by a civic, religious or 
fraternal organization that is not a 
registered retailer. The 
sale by a registered retailer of tangible personal property that 
that retailer has used in the course of the retailer' s business 
is not a casual sale if that property is of like character to 
that sold by the retailer in the ordinary course of repeated and 
successive 
transactions. 
"Casual 
sale" 
does 
not 
include 
any 
transaction in which a retailer sells tangible personal property 
or a taxable service on behalf of the owner of that property or 
the provider of that service. 
"Casual sale" does not include any 
sale of tangible personal property or a taxable service that was 
purchased for resale, lease or rental in the ordinary course of 
business by the person making the sale. 
Sec. 5. 36 MRSA §1760, sub-§2, as amended by PL 1997, c. 729, 
Pt. A, §1, is further amended to read: 
2. 
Certain governmental entities. 
Sales to the State or 
any 
political 
subdivision 
of 
the 
State, 
or 
to 
the 
Federal 
Government, or to any unincorporated agency or instrumentality of 
either of them or to any incorporated agency or instrumentality 
of them wholly owned by them. 
±l=tis-~-i-on--eees--nOC--app,ly 
wl=teFe--~i~~--~-~~-e~--takeR--a&-~-it1r-~~--aBy--€iRaReiR~ 
aFFaR~emeRtT 
This exemption a,lse does not apply to corporations 
organized under Title IV, Part E of the Farm Credit Act of 1971, 
United States Code, Sections 2211 to 2214. 
Sec. 6. 36 MRSA §1760, sub-§16, as amended by PL 2003, c. 689, 
Pt. B, §6 and c. 705, §4 and affected by §14, is further amended 
to read: 
16. 
Hospitals, 
research centers, 
churches 
and 
schools. 
Sales to incorporated hospitals, incorporated nonprofit nursing 
homes licensed by the Department of Health and Human Services, 
incorporated 
nonprofit 
residential 
care 
facilities 
and 
incorporated nonprofit assisted housing programs for the elderly 
licensed 
by 
the 
Department 
of 
Health 
and 
Human 
Services, 
incorporated nonprofit home health agencies certified under the 
United States 
Social Security Act 
of 
1965, 
Title XVIII, 
as 
amended, 
incorporated nonprofit rural community health centers, 
incorporated 
nonprofit 
dental 
health 
centers, 
institutions 
incorporated as nonprofit corporations for the sole purpose of 
conducting medical research or for the purpose of establishing 
and 
maintaining 
laboratories 
for 
scientific 
study 
and 
investigation in the field of biology or ecology or operating 
educational television or radio stations, schools, incorporated 
nonprofit organizations or their affiliates whose purpose is to 
provide 
literacy 
assistance 
or 
free 
clinical 
assistance 
to 
children with dyslexia and regularly organized churches or houses 
of 
religious 
worshipr--€~€€P~~R~--~~€£~--~~~-~---~&e--in 
aetivities-taat-aFe-mainly-eemmeFeial-enteFpFises. 
Sec. 7. 36 MRSA §1760, sub-§49, as repealed and replaced by PL 
1999, c. 499, §l, is amended to read: 
49. 
Child 
abuse 
and 
neglect 
councils; 
child 
advocacy 
organizations; conmunity action agencies. 
gHeept--f-EH"--t=fie--saler 
steFa~e--~~--~--~r--aetivities--~ha~--~~-~~~~y--eemmeF8ial 
enteFpFisesr-sales ~ 
to: 
A. 
Incorporated, nonprofit child abuse and neglect councils 
as defined in Title 22, section 3872, subsection I-A; 
B. 
Statewide organizations that advocate for children and 
that are members of the Medicaid Advisory Committee; and 
C. 
Community action agencies designated in accordance with 
Title 22, section 5324. 
Sec. 8. 36 MRS A §1760, sub-§61. as amended by PL 2003, c. 588, 
§9, is further amended to read: 
61. 
Construction 
contracts 
with 
exempt 
organizations. 
Sales 
to 
a 
construction 
contractor 
or its 
subcontractor 
of 
tangible personal property that is to be physically incorporated 
in, and become a permanent part of, real property for sale to any 
organization or government agency provided exemption under this 
section, except as otherwise provided by section 1760-C. 
Sec. 9. 36 MRS A §1760-C. as amended by PL 1999, c. 708, §31, 
is further amended to read: 
§1760-C. Exempt activities 
Ynless-e~he~w~£€-~~~~-&eetieR-l+eG7-~~~~~r-Hse 
The tax exemptions provided by taat section 1760 to 
aH-€R~,i~y 9 
person based upon its charitable, 
nonprofit or 
other public 
purposes apply only if the property or service purchased is 
intended to 
be 
used by 
the entity person primarily in the 
activity 
identified 
by 
the 
particular 
exemption. 
The 
tax 
exemptions provided by section 1760 to a person based upon its 
charitable, nonprofit or other public purposes do not apply where 
title is held or 
taken 
by 
the 
person as 
security for 
any 
financing 
arrangement. 
Exemption 
certificates 
issued 
by 
the 
State Tax Assessor pursuant to section 1760 must identify the 
exempt activity and must state that the certificate may be used 
by 
the holder 
only te--pHF8aase 
when 
purchasing property or 
services intended to be used by the holder primarily in the 
exempt activity. 
When an otherwise qualifying eHempt person is 
engaged in both exempt and nonexempt activities, an exemption 
certificate may be issued to the person only if the person has 
established 
to 
the 
satisfaction 
of 
the 
assessor 
that 
the 
applicant has adequate accounting controls to limit the use of 
the certificate to exempt purchases. 
Sec. 10. 36 MRSA §2557, sub-§3, as enacted by PL 2003, c. 673, 
Pt. V, §25 and affected by §29, is amended to read: 
3. 
Hospitals, 
research 
centers, 
churches 
and 
schools. 
Sales to incorporated hospitals, incorporated nonprofit nursing 
homes licensed by the Department of Health and Human Services, 
incorporated nonprofit residential care facilities licensed by 
the 
Department 
of 
Health 
and 
Human 
Services, 
incorporated 
nonprofit home health agencies certified under the United States 
Social 
Security 
Act 
of 
1965, 
Title 
XVIII, 
as 
amended, 
incorporated 
nonprofit 
rural 
community 
health 
centers, 
incorporated 
nonprofit 
dental 
health 
centers, 
institutions 
incorporated as nonprofit corporations for the sole purpose of 
conducting medical research or for the purpose of establishing 
and 
maintaining 
laboratories 
for 
scientific 
study 
and 
investigation in the field of biology or ecology or for operating 
educational televis ion or radio stations, schools, incorporated 
nonprofit organizations or their affiliates whose purpose is to 
provide 
literacy 
assistance 
or 
free 
clinical 
assistance 
to 
children with dyslexia and regularly organized churches or houses 
of 
religious 
worshipr--€K€€p~4H~--~~~7--~~~-~---a&&--in 
aeEiviEies-ERaE-are-ffiainly-eeffiffiereial-enEerprises; 
Sec. 11. 36 MRSA §2557, sub-§13, as enacted by PL 2003, c. 
673, Pt. V, §25 and affected by §29, is amended to read: 
13. 
Child 
abuse 
and 
neglect 
councils; 
child 
advocacy 
organizations; conmunity action agencies. 
Il:Heepto--f-&£--I:h€--saler 
sEera~e--B~--~--~r--aetiviEies--~£~~--~~-~~~~y--eeffiffiereial 
entoeFpFisesr-sales Sales to: 
A. 
Incorporated, nonprofit child abuse and neglect councils 
as defined in Title 22, section 3872, subsection I-A; 
B. 
Statewide organizations that advocate for children and 
that are members of the Medicaid Advisory Committee; and 
C. 
Community action agencies designated in accordance with 
Title 22, section 5324; 
Sec. 12. 36 MRSA §2557, sub-§31, as enacted by PL 2005, c. 
218, §36, is amended to read: 
31. Construction contracts with exempt organizations. Sales 
to a construction contractor or its subcontractor of fabrication 
services that are to be physically incorporated in, and become a 
permanent part of, real property for sale to any organization or 
government agency provided exemption under this section, except 
as otherwise provided by section 2560. 
Sec. 13. 36 MRSA §2560 is enacted to read: 
§2560. Exempt activities 
A tax exemption proyide..d by section 2557 to a --1l!lison baseg 
upon its charitable, nonprofit or other public purposes applies 
only if the service purchased is intended to be used by the 
person primarily in the activity identified by the particular 
exemption. A tax exemption provided by section 2557 to a person 
based upon its charitable, nonprofit or other public purposes 
does not apply where title is held or taken by the person as 
security for any financing arrangement. An exemption certificate 
issued by the State Tax Assessor pursuant to section 2557 must 
identify the exempt activity and must state that the certificate 
may be used by the holder only when purchasing services intended 
to be used by the holder primarily in the exempt activity. When 
an otherwise gualifying person is engaged in both exempt and 
nonexempt activities, an exemption certificate may be issued to 
the person only if the person has established to the satisfaction 
of 
the 
assessor 
that 
the 
applicant 
has 
adeguate 
accounting 
controls to limit the use of the certificate to exempt purchases. 
Sec. 14. 36 MRSA §3204-B. sub-§4 is enacted to read: 
4. Venue. 
A violation of this section is deemed to have 
been committed in part at the principal office of the assessor. 
Prosecution under this section may be in the county where the act 
to which the proceeding relates occurred or in Kennebec County. 
Sec. 15. 36 MRS A §4062, sub-§2-A, as enacted by PL 2005, c. 
12, Pt. N, §2 and affected by §4, is amended to read: 
2-A. 
Maine elective property. 
"Maine elective property" 
means all property in which the decedent at the time of death had 
a qualified income interest for life and with respect to which, 
for purposes of determining the tax imposed by this chapter on 
the estate of a predeceased spouse of the decedent, the federal 
taxable estate of 
6~eR that predeceased spouse was 
decreased 
pursuant to subsection I-A, paragraph A, 
subparagraph (3). The 
value of Maine elective property is the value 
~iRa±±y determined 
by the assessor in accordance with the Code as if such property 
were includible in the decedent' s federal gross estate pursuant 
to the Code, Section 2044 and, in the case of estates that do not 
incur a 
federal estate tax, 
as if the estate had incurred a 
federal estate tax. 
Sec. 16. 36 MRS A §4062, sub-§2-B, ,C, as enacted by PL 2005, 
c. 12, Pt. N, §2 and affected by §4, is amended to read: 
C. With respect to which an election is made, on a return 
filed timely with the State Tax Assessor, 
to treat the 
property as Maine qualified terminable interest property for 
purposes of the tax imposed by this chapter. The amount of 
property with respect to which such election is made may not 
be greater than the amount, if any, by which the applicable 
exclusion amount determined as of the date of the decedent's 
death using the Code, Section 2010(c) in effect on that date 
exceeds the applicable exclusion amount determined as of the 
date of the decedent's death using the Code, Section 2010(c) 
in 
effect 
on 
December 
31, 
2000. 
*ae--va±~e--ef--MaiBe 
~~a±ifiea-~~~£~~€-~~~--~F9~eF~y-is-~~-~~-fiBa±±y 
ae~erffiiBea-By-~~~~-iB-a€€e£aaB€e-~~~~~~~-aBaT 
iB-~~~&&-ef-~~~-~ha~-ae-~--iBe~F-~-~~r~~-e6~a~e 
~aHT-a6-if-Eae-e6EaEe-aaa-iBe~rrea-a-feaera±-e6EaEe-Ea HT 
Sec. 17. 36 MRSA §4062, sub-§8 is enacted to read: 
8. 
Valye. 
When 
determining vglue 
for 
.J2ur.J2oses 
of 
this 
chapter, "value" means, with res.J2ect tQ an eQtate or to .J2ro.J2erty 
included 
in 
an 
estate, 
including 
Mgine 
gUglified 
terminable 
interest .J2ro.J2erty: 
A. 
For estates of decedents dying before January 1, 2003 , 
the 
value 
as 
finally determined for 
federal 
estate tax 
.J2ur.J2oses; 
B. 
For estates of decedents dying after December 31, 
2002 
that incur 
a 
federal 
estate tax, 
the 
value 
as 
finally 
determined for federal estate tgX .J2ur.J2oQes unleQQ the Stgte 
Tax Assessor has determined a different value in accordance 
with the Code; or 
C. 
For estates of decedents dying after December 31, 
2002 
that 
do 
not 
incur 
a 
federal estate 
tax, 
the 
vglue 
as 
determined by the assessor in accordance with the CQde as if 
the estate had incurred a federgl estate tax. 
Sec. 18. 36 MRSA §4063, as amended by PL 2003, c. 673, Pt. D, 
§3, is repealed and the following enacted in its place: 
§4063. 
Tax on estate of resident 
A tax is imposed upon the transfer of the estate of every 
p'erson who dies after December 31, 2002 and who, at 
tAg_tim~~ 
__ Q_f 
death, was a resident of this State. 
The amount of this tax is 
equal 
to 
the 
federal 
credit multiplied 
by 
a 
fraction, 
the 
numerator of which is that portion of the decedent's federal 
gross estate that consists of real and tangible personal property 
located in the State plus all intangible personal property and 
the dgnominator of which is the decedent's federal gross estate. 
Sec. 19. 36 MRSA §4063-A, sub-§2, as enacted by PL 2001, c. 
559, Pt. GG, §5 and affected by §26, is repealed. 
Sec. 20. 36 MRSA §4064, first" as amended by PL 2005, c. 218, 
§42, is further amended to read: 
A tax is imposed upon the transfer of real property and 
tangible personal property situated in this State and held by an 
individual who dies prior to January 1, 2002 or after December 
31, 2002 and who at the time of death was not a resident of this 
State. 
When 
real 
or 
tangible 
personal 
property 
has 
been 
transferred into a trust or a limited liability company or other 
pass-through entity, the tax imposed by this section applies as 
if the trust or limited liability company or other pass-through 
entity did not exist and the property was personally owned by the 
decedent. 
Maine property is subject to the tax imposed by this 
section to the extent that such property is included in the 
decedent's federal gross estate. 
The amount of this tax is a-6~m 
equal to that proportion of the federal credit that thf> vol liE' of 
the decedent's Maine real and tangible personal property in this 
State bears to the value of the decedent's federal gross estate. 
A±±-~£B~e£~Y-~~~~-~Hi&-6eetieR-~~~-~~&a~~y-aete~miRea 
~e~--~~a~-~~~-~~--~~£~e6e67--e~ee~~--~~-~~--e6~~~e6--ef 
aeeeaeRt6--G~~-~~~--~eeemBe£--~~r-~-~R~~--a9-~-~££~~--a 
~eae~a±-e6tate-~~~~-~~-~~~~~~-a~-a&-~iRally-aete~miRea 
By-tRe-~~~~~-~~~~-w~~~-~ae-Geae-~6-~~-~~-e&~a~e-aaa 
iRe~FFea-~--t-ede-r-a-l--e-&t,..a.t:,e.-ta}h 
The share of the federal credit 
used to determine the amount of a nonresident individual's estate 
tax under this section is computed without regard to whether the 
specific real or tangible personal property located in the State 
is marital deduction property. 
Sec. 21. 36 MRSA §4064-A. sub-§l. as enacted by PL 2001, c. 
559, Pt. GG, §7 and affected by §26, is amended to read: 
1. 
Amount. 
A tax is imposed upon the transfer of real 
property and tangible personal property situated in this State 
and held by an individual who dies during the calendar year 2002 
and who at the time of death was not a resident of this State. 
When real or tangible personal property has been transferred into 
a trust, the tax imposed by this section applies as if the trust 
did not exist and the property was personally owned 
by the 
decedent. 
Maine property is subject to the tax imposed by this 
section to the extent that such property is included in the 
decedent's gross estate as finally determined for federal estate 
tax purposes. 
The amount of this tax is equal to the lesser of: 
A. 
That proportion of the federal estate tax calculated 
prior to the application of the federal credit that the 
value of Maine real and tangible personal property taxed in 
this State that qualifies for the credit bears to the value 
of the decedent's total federal gross estate; and 
B. 
That proportion of the federal credit divided by .75 
that the value of Maine real and tangible personal property 
taxed in this State that qualifies for the credit bears to 
the value of the decedent's total federal gross estate. 
A±±--~a~a&&-~~-~--fiaa±±y--ae~eFmiaea--~--~~~--€£~a~€--~aH 
p~~pesesT 
The share of the federal credit used to determine the 
amount 
of 
a 
nonresident 
individual's estate 
tax 
under 
this 
section is computed without regard to whether the specific real 
or tangible personal property located in the State is marital 
deduction property. 
Sec. 22. 36 MRSA §4071. sub·§l, as amended by PL 2003, c. 673, 
Pt. D, §8 and affected by §9, is further amended to read: 
1. 
Final 
federal 
determination. 
A 
final 
federal 
determination as 
to 
any of 
the 
following issues 
sBall also 
ae~e~miae determines the same issue for purposes of the tax under 
this chapter: 
A. 
The inclusion in the federal gross estate of any item of 
property or interest in property; 
B. 
The allowance of any item claimed as a deduction from 
the federal gross estate; or 
E. 
For estates of decedents dying before January 1, 2003, 
the amount of the federal credit. 
Sec. 23. 36 MRS A §4071, sub·§3, as enacted by PL 1981, c. 451, 
§7, is amended to read: 
3. 
Items entering computation of tax. If there has been a 
final federal determination with respect to a decedent's federal 
estate tax, 
any 
item~t nQt it§ value, 
entering into the 
computation of the tax shall is be deemed to have been the 
subject of 
the 
final 
federal 
determination, 
whether 
or 
not 
specifically adjusted thereby. 
Sec. 24. 36 MRSA §4072. as amended by PL 1999, c. 38, §1, is 
further amended to read: 
§4012. Lien for taxes 
All Any property 
S1:l.B~eet-~-o---t.-aKe-S--1*aQe.F---t.hl-6--ehapteI'T or 
interest in whateveF-f9l'ffi property, the transfer of iRvestffieRt-it 
ffiay-happeR-t9-geT which is subject tQ tax under this chapter, is 
charged with a lien for all taxes, interest and penalties that 
are or may become due 9R under this chapter with respect to that 
property. 
The lien arises at the time of the decedent's death 
and cQntinues for 10 years, except that the lien is not valid 
against prQperty u§ed for the payment 
Qf charges against the 
estate and expenses Qf administration allowed by any court with 
subject matter jurisdiction. 
The lien does not attach to any 
l'ea1--91' personal property after the property has been sold or 
disposed of for value by the personal representative, trustee or 
surviving joint tenant. 
Upon payment of th9se--t,.aH-es the tax, 
interest 
and 
penalties 
due 
under 
this 
chapter, 
or 
upon 
determination that no tax is due, the State Tax Assessor shall 
upon request execute a discharge of the tax lien for recording in 
the appropriate registry or registries of deeds. 
ARy-~~~~~-attaehee--t.~~~~-pI'9pel'ty-~~~-~-o--£eptemBeF 
0 
~ 9 T - ± 989 - -aRQ- -a.f -t.€-£ - -t.-be- ¥ -ope-r -t-y- -was- --&G-l-d- -o-F- -G i-s-pG-&eG -~ E- - f9 F- - V a ± 1:1. e 
By--t.He-pe~-s~£-a~-~~~~~~~--t~~~-o-F--S-1*F-~i-~i-~-}~iRt-teRaRt 
is-l'eleasee-BY-9pel'ati9R-9f-tais-seeti9RT 
Sec. 25. 36 MRSA §4366-A. sub-§2. as amended by PL 2005, c. 
457, Pt. AA, §§4 and 5 and affected by §8, is further amended to 
read: 
2. 
Provided to sellers. 
The 
State Tax 
Assessor 
shall 
provide stamps suitable to be affixed to packages of cigarettes 
as evidence of the payment of the tax imposed by this chapter. 
The assessor may permit a licensed distributor to pay for the 
stamps within 30 days after the date of purchase, if a 
bond 
satisfactory to the assessor in an amount not less than 50
0b of 
the sale price of the stamps has been filed with the assessor 
conditioned upon payment for the stamps. 
Such a distributor may 
continue to purchase stamps on a 30-day deferral basis only if it 
remains current with its cigarette tax obligations. The assessor 
may not sell additional stam11..§. to a distributor that has failed 
to pay in full wi thin 30 days for stamps previously purchased 
until such time as the overdue payment is received. 
The assessor 
shall sell cigarette stamps 
to licensed distributors at the 
following discounts from their face value: 
A. 
For stamps at the face value of 31 mills sold through 
September 30, 2001, 2.5%; 
B. 
For stamps at the face value of 50 mills sold prior to 
July 1, 2002, 2.16%; 
C. 
For stamps at the face value of 50 mills sold on or 
after July 1, 2002, 2.03%; and 
D. 
For stamps at the face value of 100 mills, 1.15%. 
Sec. 26. 36 MRSA §5122. sub-§2. ,T. as amended by PL 2005, c. 
416, §2, is further amended to read: 
T. 
For income tax years beginning on or after January 1, 
2002 
and before January 1, 
2004, 
an amount equal to the 
total premiums spent for long-term care insurance policies 
certified under Title 24-A, section 5075-A as long as the 
amount subtracted is reduced by the long-term care premiums 
claimed as an itemized deduction pursuant to section 5125. 
For income tax years beginning on or after January 1, 2004, 
an amount equal to the total premiums spent for qualified 
long-term care insurance contracts certified under Title 
24-A, section 5075-A, 
as long as the amount subtracted is 
reduced by any amount claimed as a deduction for federal 
income tax purposes in accordance with the Code, 
Section 
162(1) 
and by the long-term care premiums claimed as 
an 
itemized deduction pursuant to section 5125; aRe 
Sec. 27. 36 MRSA §5122. sub-§2. ,U, as enacted by PL 2005, c. 
416, §3, is amended to read: 
U. 
For income tax years beginning on or after January 1, 
2015, 
the gain attributable to 
the sale of sustainably 
managed, 
eligible 
timberlands 
as 
calculated 
in 
this 
paragraph. 
(1) 
As 
used in this paragraph, 
unless the context 
otherwise 
indicates, 
the 
following 
terms 
have 
the 
following meanings. 
(a) 
"Commercial 
harvesting" 
or 
"commercially 
harvested" means the harvesting of forest products 
that have commercial value. 
(b) 
"Eligible timberlands" means land of at least 
acres located in the State and used pr imar ily 
for 
the 
growth 
of 
trees 
to 
be 
commercially 
harvested. 
Land that would otherwise be included 
within this definition may not be excluded because 
of: 
(i) 
Use 
of 
the 
land for 
mUltiple public 
recreation activities; 
(ii) 
Statutory or governmental restrictions 
that prevent commercial harvesting of trees 
or require a primary use of the land other 
than commercial harvesting; 
(iii) 
Deed 
restrictions, 
restrictive 
covenants 
or 
organizational 
charters 
that 
prevent 
commercial 
harvesting of 
trees 
or 
require 
a 
primary use of 
land other 
than 
commercial harvesting and that were effective 
prior to January 1, 1982; 
or 
(iv) 
Past 
or 
present 
multiple 
use 
for 
mineral exploration. 
(c) 
"Forest products that have commercial value" 
means 
logs, 
pulpwood, 
veneer, 
bolt 
wood, 
wood 
chips, 
stud wood, 
poles, pilings, 
biomass, 
fuel 
wood, 
Christmas 
trees, 
maple 
syrup, 
nursery 
products 
used for 
ornamental purposes, 
wreaths, 
bough material or cones or other seed products. 
(d) 
"Sustainably managed" means: 
(i) 
A forest management and harvest plan, as 
def ined in section 573, 
subsection 3 -A, 
has 
been prepared for 
the eligible timberlands 
and has been in effect for the entire time 
period 
used 
to 
compute 
the 
amount 
of 
the 
subtraction 
modification 
under 
this 
paragraph; and 
(ii) 
The 
taxpayer has 
received 
statement from a licensed forester 
that, 
as 
of 
the 
time 
of 
the 
eligible 
timberlands 
have 
been 
accordance with the plan under 
(i) during that period. 
a 
written 
certifying 
sale, 
the 
managed 
in 
subdivision 
(2) 
To 
federal 
must be 
the extent they are included in the taxpayer's 
adjusted gross income, 
the following amounts 
subtracted from federal adjusted gross income: 
(a) For eligible timberlands held by the taxpayer 
for at least a 
10-year period 
beginning on or 
after January 1, 
2005 but less than an II-year 
period beginning on or after January 1, 2005, 1/15 
of the gain recognized on the sale of the eligible 
timberlands; 
(b) For eligible timberlands held by the taxpayer 
for at least an II-year period 
beginning on or 
after January 1, 
2005 but less than 
a 
12-year 
period beginning on or after January 1, 2005, 2/15 
of the gain recognized on the sale of the eligible 
timberlands; 
(c) 
For eligible timberlands held by the taxpayer 
for at least a 
12-year period 
beginning on or 
after January 1, 
2005 but less than 
a 
13-year 
period beginning on or after January 1, 2005, 115 
of the gain recognized on the sale of the eligible 
timberlands; 
(d) 
For eligible timberlands held by the taxpayer 
for at least a 
13-year period 
beginning on or 
after January 1, 
2005 but less than 
a 
14-year 
period beginning on or after January 1, 2005, 4/15 
of the gain recognized on the sale of the eligible 
timberlands; 
(e) 
For eligible timberlands held by the taxpayer 
for at least a 
14-year period 
beginning on or 
after January 1, 
2005 but less than 
a 
15-year 
period beginning on or after January 1, 2005, 113 
of the gain recognized on the sale of the eligible 
timberlands; 
(f) 
For eligible timberlands held by the taxpayer 
for at least a 
15-year period 
beginning on or 
after January 1, 
2005 but less than 
a 
16-year 
period beginning on or after January 1, 2005, 2/5 
of the gain recognized on the sale of the eligible 
timberlands; 
(g) 
For eligible timberlands held by the taxpayer 
for at least a 
16-year pe!"iod 
beginning on or 
after January 1, 
2005 but less than 
a 
17-year 
period beginning on or after January 1, 2005, 7/15 
of the gain recognized on the sale of the eligible 
timberlands; 
(h) 
For eligible timberlands held by the taxpayer 
for at least a 
-year period 
beginning on or 
after January L 
2005 but less than an 18-year 
period beginning on or after January 1, 2005, 8/15 
of the gain recognized on the sale of the eligible 
timberlands; 
(i) 
For eligible timberlands held by the taxpayer 
for at least an 18-year period 
beginning on or 
after January 1, 
2005 
but less than 
a 
19-year 
per iod beginning on or after January 1, 2005, 3/5 
of the gain recognized on the sale of the eligible 
timberlands; 
(j) 
For eligible timberlands held by the taxpayer 
for at least a 
19-year period 
beginning on or 
after January 1, 
2005 
but less than 
a 
20-year 
period beginning on or after January L 
2005, 2/3 
of the gain recognized on the sale of the eligible 
timberlands; 
(k) 
For eligible timberlands held by the taxpayer 
for at least a 
20-year period 
beginning on or 
after January 
1, 
2005 
but less than 
a 
21-year 
period beginning 
on 
or after January 
1, 
2005, 
11/15 of the gain recognized on the sale of the 
eligible timberlands; 
(1) 
For eligible timberlands held by the taxpayer 
for at least a 
21-year period 
beginning on or 
after January 1, 
2005 
but less than 
a 
22-year 
period beginning on or after January 1, 2005, 4/5 
of the gain recognized on the sale of the eligible 
timberlands; 
(m) 
For eligible timberlands held by the taxpayer 
for at least a 
22-year period 
beginning on or 
after January 1, 
2005 but less than 
a 
23-year 
period beginning on 
or after January 
1, 
2005, 
13/15 of the gain recognized on the sale of the 
eligible timberlands; 
(n) 
For eligible timberlands held by the taxpayer 
for at least a 
23-year period 
beginning on or 
after January 1, 
2005 but less than 
a 
24-year 
period beginning 
on 
or after January 
1, 
2005, 
Page l3-LR2951(1) 
14/15 of the gain recognized on the sale of the 
eligible timberlands; or 
(0) 
For eligible timberlands held by the taxpayer 
for at least a 
24-year period 
beginning on or 
after January 1, 2005, all of the gain recognized 
on the sale of the eligible timberlands. 
(3) 
Taxpayers claiming this credit must attach a sworn 
statement from a forester licensed pursuant to Title 
32, 
chapter 
that the 
timberlands 
for 
which 
the 
credi t 
is claimed have been managed sustainably. 
For 
the purposes of this subparagraph, "sustainably" means 
that the timberlands for which the credit is claimed 
have been managed to protect soil productivity and to 
maintain 
or 
improve 
stand 
productivity 
and 
timber 
quali ty; known occurrences of threatened or endangered 
species 
and 
rare 
or 
exemplary 
natural 
communities; 
significant wildlife habitat 
and 
essential wildlife 
habitat; and water quality, wetlands and riparian zones. 
Upon request of the State Tax Assessor, the Director of 
the 
Bureau 
of 
Forestry 
wi thin 
the 
Department 
of 
Conservation 
may 
provide 
assistance 
in 
determining 
whether timberlands for which the credit is claimed 
have 
been 
managed 
sustainably. 
When 
assistance 
is 
requested under this subparagraph, the director or the 
director's 
designee 
may 
enter 
and 
examine 
the 
timberlands for the purpose of determining whether the 
timberlands have been managed sustainably. 
In the 
case of timberlands 
owned 
by 
an entity that is 
treated as a pass-through entity for income tax purposes, 
the land must be treated as eligible timberland if ownership 
and use of the land by the pass-through entity satisfies the 
requirements 
of 
this 
paragraph. 
If 
the 
owner 
of 
the 
eligible timberlands is an S corporation, the taxpayer must 
subtract the owner's pro rata share of the gain. 
If the 
owner 
of 
the 
timberlands 
is 
a 
partnership 
or 
limited 
liability company taxed as a partnership, the taxpayer must 
subtract 
the 
taxpayer's distributive share of 
the gain, 
subject 
to 
the 
percentage 
limitations 
provided 
in this 
paragraph. 
This modification may not reduce Maine taxable income to 
less than zero. 
To the extent this modification results in 
Maine taxable income that is less than zero for the taxable 
year, the excess negative modification amount may be carried 
forward and applied as a subtraction modification for up to 
taxable years. 
The entire amount of the excess negative 
modification must be carried to the earliest of the taxable 
years to which, by reason of this subsection, the negative 
modification may be carried and then to each of the other 
taxable years to the extent the unused negative modification 
is not used for a prior taxable year. 
Earlier carry-forward 
modifications 
must 
be 
used 
before 
newer 
modifications 
generated in later yearsTL 
Sec. 28. 36 MRSA §5122, sub-§2, ~ is enacted to read: 
v. 
The taxpayer's pro rata share of an amount that was 
previously added back to federal taxable income pursuant to 
section 
5200-A, 
subsection 
It 
paragraph 
H 
by 
an 
S 
corporation of which the taxpayer is a shareholder 
anil~ 
which, 
absent the S corporation election, the corporation 
could 
have 
reduced its 
federal 
taxable 
income 
for 
the 
taxable 
year 
pursuant 
to 
section 
5200-A, 
subsection 
2, 
paragraph Hj 
Sec. 29. 36 MRS A §5122, sub-§2, 1fW is enacted to read: 
W. 
The taxpayer's pro rata share of an amount that was 
previously added back to federal taxable income pursuant to 
section 
5200-A, 
subsection 
1, 
paragraph 
M 
by 
an 
S 
corporation of which the taxpayer is a shareholder and by 
which, 
absent the S corporation election, the corporation 
could 
have 
reduced its 
federal 
taxable 
income 
for 
the 
taxable 
year 
pursuant 
to 
section 
5200-A, 
subsection 
2, 
paragraph Lj and 
Sec. 30. 36 MRSA §5122. sub-§2.1fX is enacted to read: 
X. 
The taxpayer's pro rata share of an amount that was 
previously added back to federal taxable income pursuant to 
section 
5200-A, 
subsection 
It 
paragraph 
N 
by 
an 
S 
corporation of which the taxpayer is a shareholder and by 
which, 
absent the S corporation election, the corporation 
could 
have 
reduced its 
federal 
taxable 
income 
for 
the 
taxable 
year 
pursuant 
to 
section 
5200-A, 
subsection 
2, 
paragraph M. 
Sec. 31. 36 MRSA §6664, as enacted by PL 2005, c. 12, Pt. 
BBB, §5, is amended to read: 
§6664. Report 
1. 
Report to Leqislature. 
By JaaaaFi' March 15th annually, 
the 
State 
Tax 
Assessor 
shall 
submit 
to 
the 
joint 
standing 
committee 
of 
the 
Legislature 
having 
jurisdiction 
over 
appropriations 
and 
financial 
affairs 
and 
the 
joint 
standing 
committee of the Legislature having jurisdiction over taxation 
matters a 
report that contains the following information with 
regard to persons receiving benefits under this chapter: 
A. 
A list of persons 
taxes both under this 
financing agreement; 
receiving 
chapter 
reimbursement for property 
and under a 
tax increment 
B. 
The 
total tax 
increment financing district property 
value for each person: 
C. 
The 
municipality 
of 
each 
tax 
increment 
financing 
district and the property tax rate for that municipality: 
D. 
The 
total tax 
increment 
taxes 
paid, 
categorized 
by 
property: 
financing district 
real 
property 
and 
property 
personal 
E. 
The total of tax increment financing credit enhancement 
agreement reimbursement for property taxes paid categorized 
by real property and personal property; 
F. 
The total reimbursement received by each person under 
this chapter; and 
G. 
The extent of overlap between reimbursement for property 
taxes on personal property under this chapter and under a 
tax increment financing agreement. 
2. 
Cooperation. 
±se Claimants for reimbursement under this 
chapter, the Department of Economic and Community Development and 
municipalities shall provide any information requested by the 
State Tax Assessor for the completion of the report required by 
this section. 
Sec. 32. Application. 
Those sections of this Act that repeal 
and replace the Maine Revised Statutes, Title 36, section 4063 
and amend Title 36, section 4071, subsections 1 and 3 apply to 
the estate of any decedent dying on or after January 1, 
2003. 
That section of thi s 
Act that amends Title 36, 
section 4072 
applies to the estate of any decedent dying on or after January 
1, 2006. 
Those sections of this Act that enact Title 36, section 
5122, subsection 2, 
paragraphs V, 
Wand X apply to tax years 
beginning on or after January 1, 2006. 
Sec. 33. Retroactivity. 
That section of this Act that amends 
the Maine Revised Statutes, Title 36, section 4366-A, subsection 
applies retroactively to September 19, 2005. That section of 
this Act that amends Title 36, section 6664 applies retroactively 
to June 29, 2005. 
Sec. 34. Effective date. 
the Maine Revised Statutes, 
is effective July 1, 2007. 
That section of this Act that enacts 
Title 36, section 113, subsection 4 
SUMMARY 
This bill makes the following changes to the laws governing 
taxation. 
It allows a fuel tax registration violation to be prosecuted 
in Kennebec County or in the county where the violation occurred. 
It authorizes the payment of fees imposed for recording a 
lien or lien discharge directly from the General Fund. 
It authorizes the State Tax Assessor to establish procedures 
for payment of taxes by credit card and to contract with one or 
more entities for the purpose of accepting and processing credit 
card transactions. 
It establishes that sales of property or services purchased 
for resale, lease or rental in the ordinary course of business by 
the person making the sale are not casual sales. 
It clarifies that a sales and use tax exemption provided to 
a person based upon its charitable, nonprofit or other public 
purposes applies only if the property or service purchased is 
intended to be used by the person pr imar ily in the acti vi ty 
identified by the particular exemption. 
It clarifies that a service provider tax exemption provided 
to a person based upon its charitable, nonprofit or other public 
purposes applies only if the service purchased is intended to be 
used by the person primarily in the activity identified by the 
particular exemption. 
It allows a dyed fuel violation to be prosecuted in Kennebec 
County or in the county where the violation occurred. 
It enacts a definition of "value" in Maine estate tax law 
and 
repeals 
language 
elsewhere 
in 
the 
law 
that effectively 
defines "value." The new definition provides that the value of an 
estate or property included in an estate is the value determined 
by the State Tax Assessor in accordance with the Internal Revenue 
Code. 
It permits 
the 
cigarette distributor 
State Tax 
up to 30 
Assessor 
to 
days to pay 
allow 
a 
licensed 
for cigarette tax 
stamps if the distributor has posted a bond of 50% of the amount 
of the cigarette stamp purchases. 
It allows bonus depreciation, Section 179 expense and net 
operating loss addition modifications claimed by a C corporation 
to be recaptured by individual shareholders of the corporation if 
it elects to be treated as an S corporation in a subsequent year. 
It changes the date for the annual report to the Legislature 
regarding the BETR/TIF overlap from January 15th to March 15th 
and 
requires 
BETR 
applicants 
to 
provide 
BETR/TIF 
overlap 
information to the State Tax Assesor. 
It excludes from the Maine estate tax real and tangible 
personal property owned by a resident of the State that is not 
located in the State. 
It provides that only a sale of personal property for value 
will qualify for 
an 
automatic estate tax lien release. 
It 
clarifies the commencement and duration of the estate tax lien.