An Act To Make Minor Substantive Changes to the Tax Laws
Maine Legislature, Session 122, LD 1462
Committee: Taxation
Sponsors: WOODBURY, PERRY
Amends: 4 MRSA §807-A, 36 MRSA §187-B, 36 MRSA §191, 36 MRSA §193, 36 MRSA §208-A, 36 MRSA §1752, 36 MRSA §1754-B, 36 MRSA §1811-B, 36 MRSA §2908, 36 MRSA §2909, 36 MRSA §3215, 36 MRSA §3218, 36 MRSA §5142, 36 MRSA §5250-B, 36 MRSA §5276, 36 MRSA §6211, 36 MRSA §6212

Legislative Document 
No. 1462 
H.P.1024 
House of Representatives, March 23, 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. 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative WOODBURY of Yarmouth. 
Cosponsored by Senator PERRY of Penobscot. 
Printed on recycled paper 
7l/~m.17lp£~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 4 MRSA §807-A, 2nd 1(, as amended by PL 1987, c. 497, 
§1 and PL 1997, c. 526, §14, is further amended to read: 
Upon promulgation of and in accordance with rules adopted by 
the Supreme Judicial Court, employees of the Bureau of Revenue 
Services may serve civil process and represent the bureau in 
District Court in disclosure proceedings pursuant to Title 14, 
chapter 
502, 
ancillary to the collection of taxes 
for 
which 
warrants have been issued pursuant to Title 36, and may represent 
the State Tax Assessor in arraignment proceedings in District 
Court in cases in which a 
criminal complaint has been filed 
alleging violation of any provision of Title 
36T--s-e-e-t...,i,..o.n..-6;b;b~T 
6664-91'-§666. 
Sec. 2. 36 MRS A §111, sub-§5. as amended by PL 1997, c. 668, 
§8, is further amended to read: 
5. 
Ta%. "Tax" means the total amount required to be paid, 
withheld and paid overT or collected and paid over with respect 
to estimated or actual tax liability under this Title and any 
amount assessed by the State Tax Assessor pursuant to this Title, 
including 
any 
interest 
or 
eivil---penaJ.-t.-Y---Fe-la-t:-i-ng---t;ael'et;e 
penalties provided by law. 
For purposes of sections 171, 175-A, 
176-A and 186, "tax" also means any fee, fine, penalty or other 
obligation 
owed 
to 
the 
State 
provided 
for 
by 
law if this 
obligation is subject to collection by the assessor pursuant to 
an agreement entered into by the bureau and another agency of the 
State. 
Sec. 3. 36 MRSA §187-B, sub-§5-B is enacted to read: 
5-8. Electronic data submission. Any person required by the 
State Tax Assessor to file returns by electronic data submission 
that fails to file electronically is liable for a penalty of 5'l-o 
of the tax due or $50, whichever is greater. 
For purposes of 
this subsection, a person fails to file electronically when: 
A. Two or more required returns in any consecutive 6-month 
period either are not filed or are filed by the person by 
means other than electroniC data submission and the person 
has been notified in writing by the State Tax Assessor of 
that person's noncompliance and of the fact that the penalty 
authorized by this subsection may be imposed; or 
B. The person files 2 or more required electronic returns in 
any consecutive 6-month period that do not comply with the 
specifications set forth in rules adopted by the State Tax 
Assessor pursuant to section 193. 
Sec. 4. 36 MRSA §191, sub-§2,~, as corrected by RR 2003, c. 
2, §114, is amended to read: 
R. 
The disclosure to the Department of Health and Human 
Services of information relating to the administration and 
collection of the 
~aH ~ 
imposed by chapter 358, chapter 
aBeL chapter 375 and chapter 377; 
Sec. 5. 36 MRSA §191, sub-§2, ~B, as amended by PL 2003, c. 
668, §9 and affected by §12 and amended by c. 689, Pt. B, §6, is 
further amended to read: 
BB. 
The disclosure to an authorized representative of the 
Department of Health and Human Services, Office of Weae 
S~aF~-aBe Child Care and Head Start of taxpayer information 
directly 
relating 
to 
the 
certification 
of 
investments 
eligible for or the eligibility of 
a 
taxpayer 
for 
the 
quality child care investment credit provided by section 
52l9-Q; aBe 
Sec. 6. 36 MRSA §191. sub-§2, ,CC, as enacted by PL 2003, c. 
668, §lO and affected by §12, is amended to read: 
CC. 
The disclosure to an authorized representative of the 
Department 
of 
Professional 
and 
Financial 
Regulation 
of 
information necessary for the administration of Title 10, 
chapte r 222 do. 
Sec. 7. 36 MRSA §191, sub-§2, "DD to GG are enacted to read: 
DO. The delivery of a certified copy of any return, report 
or other information provided or filed pursuant to this 
Title by a partnership, corporation, trust or estate or any 
report 
of 
any 
examination 
of 
a 
return 
filed 
by 
a 
partnership, corporation, trust or estate to any person: 
(1) 
Who signed the return; 
(2) 
Who is the personal representative or executor of 
the estate filing the return; 
(3) 
Who 
was a member of the partnership filing the 
return during any part of the period covered by the 
return; 
(4) 
Who is a trustee of the trust filing the return; 
(5) 
Who 
was 
a 
shareholder during any part of the 
period covered by the return filed by an S corporation: 
(6) 
Who is an officer, or a bona fide shareholder of 
record owning 1% or more of the outstanding stock, of 
the corporation filing the return: 
(7) 
Who 
is the 
person authorized to act for 
the 
corporation if the corporation has been dissolved; or 
(8) 
Who is the duly authorized representative of any 
of the persons described in subparagraphs (1) to (7). 
The exception under this paragraph does not include the 
disclosure 
of 
confidential 
information 
of 
a 
particular 
partner, shareholder, beneficiary or trustee or other person 
rece~v~ng income 
from 
one 
of 
the entities described in 
subparagraphs (1) to (8) unless otherwise authorized: 
EE. 
The disclosure by the State Tax Assessor of the fact 
that a person has or has not been issued a provisional 
resale certificate pursuant to section l754-B, 
subsection 
2-B or a 
resale certificate pursuant to section 1754-8, 
subsection 2-Cj 
FF. 
The disclosure to the Department of the Secretary of 
State, 
Bureau 
of 
Motor 
Vehicles 
of 
whether 
the 
person 
seeking registration of a vehicle has paid the tax imposed 
by Part 3 with respect to that vehicle; and 
GG. The disclosure to the Department of Inland Fisheries and 
Wildlife, Bureau of Administrative Services of whether the 
person seeking registration of 
a 
snowmobile, 
all-terrain 
vehicle or watercraft has paid the tax imposed by Part 3 
with respect to that snowmobile, 
all-terrain vehicle or 
watercraft. 
Sec. 8. 36 MRSA §193, as amended by PL 1999, c. 708, §18, is 
repealed and the following enacted in its place: 
S193. Returns; declaration covering p~rjury; submission o£ 
returns and £unds by electronic meanS 
1. 
Declaration 
required. 
Any 
return, 
report 
or 
other 
document required to be filed pursuant to this Title must contain 
a declaration, in a form prescribed by the State Tax Assessor, 
that the statements contained in the return, 
report or other 
document are true and are made under the penalties of perjury. 
When a tax return is filed electronically by a taxpayer or with 
the taxpayer's permission, the filing of that return constitutes 
a sworn statement by the taxpayer, made under the penalties of 
perjury, that the tax liability shown on the return is correct. 
2. Electronic filing. The State Tax Assessor may allow or, 
as provided in this subsection, require the filing of a return or 
document by electronic data submission or by telephone. 
A. 
In the case of an employer that submits returns in 
accordance with section 5253 with respect to 100 or more 
employees, whether the returns are submitted directly by the 
employer or by a 3rd party on behalf of the employer, the 
assessor may require that the returns be filed by electronic 
data submission. 
B. In the case of a payroll processor as defined in Title 
10, chapter 222 that submits returns pursuant to section 
5253 or Title 26, chapter 13, subchapter 7 for 100 or more 
employers, 
the assessor may 
require that the returns be 
filed by electronic data submission. 
3. 
P~nt by electronic funds transfer. 
The State Tax 
Assessor may allow or, as provided in this subsection, require 
the payment of a tax or the refund of a tax by electronic funds 
transfer. An electronic funds transfer allowed or required by the 
assessor pursuant to this subsection is considered a return. For 
the purposes of this subsection. 
"tax" 
includes 
unemployment 
insurance contributions reg;uired to be paid to the State pursuant 
to Title~ 
A. 
In the case of a person that is liable for $200,000 or 
more per year pursuant to section 5253 or for $400,000 or 
more per year in payments of any other single tax type, the 
assessor 
may 
require payment 
or 
refund of that tax 
by 
electronic funds transfer. 
B. In the case of a payroll processor as defined in Title 
10, chapter 222, the assessor may require payment or refund 
of taxes pursuant to section 5253 and unemployment insurance 
contributions pursuant to Title 26, chapter 13, subchapter 7 
by electronic funds transfer. 
4. Adoption of rules. The State Tax Assessor may adopt rules 
to establish procedures necessary to implement the provisions of 
this section and shall adopt rules in the event that payment of 
taxes by electronic funds transfer is mandated. 
Rules adopted 
pursuant to this subsection are routine technical rules for the 
purposes of Title 5, chapter 375, subchapter 2 A. 
Sec. 9. 36 MRSA §208-A, sub-§l, as enacted by PL 1997, c. 688, 
§l, is amended to read: 
1. 
Request 
for 
adjustment. 
A 
municipality 
that 
has 
experienced 
a 
sudden and severe disruption in its municipal 
valuation may request an adjustment to the equalized valuation 
determined by the State Tax 
Assessor 
under 
section 208. 
A 
municipality requesting an adjustment under this section must 
file a petition, with supporting documentation, with the State 
Tax Assessor 
9y-~-he--AQ~Qs1;--1&t.--pli'eeeeiR~-~-he--Ge1;egeli'--1-&t:--wheR 
RlQRieipaHt.ies--a!.'-e--Re1;i-fiee within 45 days following receipt of 
the annual notice of the proposed valuations of municipalities 
within each county as reguired under section 208. 
Sec. 10. 36 MRSA §1752, sub-§9-B, 
557, 
Pte 
D, 
§1 and affected by §4 
amended to read: 
as 
and 
amended by PL 1997, c. 
Pt. G, 
§l, 
1S further 
9-B. 
Production. 
"Production" 
means 
an 
operation 
or 
integrated series of operations engaged in as 
a 
business or 
segment 
of 
a 
business 
that 
transforms 
or 
converts 
personal 
property by physical, chemical or other means into a different 
form, composition or character from that in which it originally 
existed. 
"Production" includes film production. 
"Production" includes manufacturing, processing, assembling and 
fabricating operations that meet the definitional requisites, 
including biological processes that are part of an integrated 
process 
of 
manufacturing 
organisms 
or 
microorganic 
materials 
through the application of biotechnology. 
"Production" 
does 
not 
include biological processes 
except 
as 
otherwise 
provided 
by 
this 
subsection, 
wood 
harvesting 
operations, the severance of sand, gravel, oil, gas or other 
natural resources produced or severed from the soil or water, or 
- activities such as cooking or preparing drinks, meals, food or 
food products by a re.tailer for retail sale. 
±H.e--f-trr~i-nq--aFe 
eHaRlples-~~-~~~~~~~-1;ha1;-~~-~--iRelQeee-~~t~~-~~-EeIi'RI 
!!pli'eQ\:le1;i-eR ... !! 
Sec. 11. 36 MRSA §1752, sub-§II, as amended by PL 2003, c. 
588, §3, is further amended to read: 
11. 
Retail sale. 
"Retail sale" means any sale of tangible 
personal property or a taxable service in the ordinary course of 
business €eli'-a~y-~~~~~-1;haR-fe£-~~~~-~-~&a~-a6 
a--easQal--saleT--iR--1;he--€eIi'RI--e€--EaR~i9le--peIi'SeRal--pli'epeIi'Ey. 
!!ReEai-l-~~~-alse-~-a&y-~a~€-~~-a-~~~-se£viee--Hr-Ehe 
eli'eiRali'y--ee\:lFSe-~~-~bG&&&-~~-~-~~-~~~~--t.aaR--€eli' 
li'esaleT-eHeepE-li'esale-as-a-easQal-sale ... 
A. 
"Retail sale" includes: 
B. 
(1) Conditional sales, installment lease sales and any 
other transfer of tangible personal property when the 
title is retained as security for the payment of the 
purchase price and is intended to be transferred later; 
and 
(2) Sale of products for internal human consumption to 
a 
person 
for 
resale 
through 
coin-operated 
vending 
machines when sold to a person more than 50°1> of whose 
gross 
receipts 
from 
the 
retail 
sale 
of 
tangible 
personal 
property 
are 
derived 
from 
sales 
through 
vending machines. 
The tax must be paid by the retailer 
to the State. 
"Retail sale" does not include: 
(1) 
Any casual sale; 
( 2 ) 
Any 
sale by 
a 
personal 
representative in the 
settlement 
of 
an 
estate, 
unless 
the 
sale 
is 
made 
through a retailer, or unless the sale is made in the 
continuation or operation of a business: 
(3) 
The sale, to a person engaged in the business of 
renting automobiles, of automobiles, integral parts of 
automobiles or accessories to automobiles, for rental 
or for use in an automobile rented on a short-term 
basis; 
(4) 
The sale, to a person engaged in the business of 
renting 
audio 
or 
video 
media 
and 
audio 
or 
video 
equipment, of audio or video media or audio or video 
equipment for rental; 
(5) 
The sale, to a person engaged 1n 
renting 
or 
leasing automobiles, 
of 
rental or lease for one year or more; 
the business of 
automobiles 
for 
(6) 
The sale, to a person engaged in the business of 
providing cable television services, of cable converter 
boxes and remote-control units for rental or lease; e~ 
(7) 
The sale, to a person engaged in the business of 
renting furniture, of furniture for rentalvL 
(8) 
The 
sale, 
in 
the 
form 
of 
tangible 
personal 
property, to a retailer that has been issued a resale 
certificate pursuant to section 1754 B, subsection 2 B 
or 
2-C, 
of 
tangiple 
personal 
property 
for 
resale, 
except resale as a casual sale; 
(9) 
The 
sale, 
in 
the 
form 
of 
tangible 
personal 
property, to a rj:!tailer that has been issued a resale 
certificate pursuant to section 17 54-B, subsection 2-B 
or 2-C, of a taxable service for resale; 
(10) 
The 
sale, 
in 
th~t __ f..Q_rm 
of 
tangible 
personal 
property to a retailer that is not reguired to register 
by section l754-B, 
of tangible personal property for 
resale outside the State, except resale as 
a casual 
sale; or 
(11) The sale, to a I;:etailer that is not reguired to 
register by section l754-B, of a taxable service for 
resale outside the State, except resale as 
a casual 
sale. 
Sec. 12. 36 MRS A §1752. sub-§17-B. as enacted by PL 2003, c. 
673, Pt. V, §19 and affected by §29, is amended to read: 
17-B. 
Taxable service. 
"Taxable service" means the rental 
of living quarters in a 
hotel, 
rooming houser or tourist or 
trailer camp; the transmission and distribution of electricity; 
the distribution of natural gas; 
the rental or 
lease of 
an 
automobile; and the sale of prepaid calling service. 
Sec. 13. 36 MRSA §1754-B. sub-§§2-B and 2-C. as enacted by PL 
2003, c. 673, Pt. AAA, §2, are amended to read: 
2-B. 
Provisional resale certificates; new accounts. 
The 
assessor shall issue a provisional resale certificate to each 
applicant for initial registration that states on its application 
that it expects to make annual gross sales of $10,000 or more. 
A 
provisional resale certificate 
~ss~ee--&&~W&&&-~~-~~~--aRe 
Sep~emgeF-~g~R is effective ~eF-~Re-tHH~~~~-~~~~&4~~-yeaF 
~R-wR~eR-~~-~s-~6s~eeT--A until the end of the next calendar year 
in which the status of retailers registered under this section is 
reviewed pursuant to subse<::tion 2-C, except that a provisional 
resale certificate issued between October 1st and December 31st 
immediately 
preceding 
the 
commencement 
of 
a 
3-year 
perioq 
pursuant to subsection 2-C is effective until the end of ~Re-Re*~ 
that succeeding ea,lene.-a-£--yeaF 3-year period. 
Each certificate 
must contain the name and address of the retailer, the expiration 
date of the certificate and the certificate number. 
If a vendor 
has a true copy of a retailer's resale certificate on file, that 
retailer need not present the certificate for each subsequent 
transaction with that vendor during the ealeseaF-yeaF period for 
which it is valid. 
2-C. 
Resale 
certificates; 
contents; 
presentation 
to 
vendor. 
The assessor shall aRRlia:l:ly review the status of each 
retailer registered under this sectionT--GR Qn or before December 
;nst: 31, 2005, and on or before December 31st of eaeh every 3rd 
yeary --_t.he 
thereafter. 
The 
assessor 
shall 
issue 
to 
each 
registered retailer with gross sales of $10,000 or more during 
the 12 months preceding the assessor's review aR-aRRlia:l £ resale 
certificate effective for the next 
slieeeee.iR~--oa-l~--yeaF .1 
~. Each certificate must contain the name and address of the 
retailer, 
the 
expiration 
date 
of 
the 
certificate 
and 
the 
certificate number. 
If a vendor has a true copy of a retailer'S 
resale certificate on file, that retailer need not present the 
certificate for 
each subsequent transaction with that vendor 
during the ea:leReaF-yeaF period for which it is valid. 
Sec. 14. 36 MRSA §1811-B. as enacted by PL 2003, c. 673, Pt. 
AAA, §3, is amended to read: 
SI811-B. Credit for tax paid on purchases for resale 
A retailer registered under 
section 
1754-B 
may 
claim 
a 
credit for sales tax imposed by eha~-t.e~5-~~~-~~-66§ this Part if 
the 
retailer 
has 
paid 
the 
sales 
tax 
on 
aR--it:em--t:hat:--it: 
s1iSSe~1ieR-t.±y--Fese:l:ls tangible personal property purchased for 
resale at retail sale. 
The credit may be claimed only on the 
return eR-whi€h-_t.h€-~~~~-~~-~~-~&-Fe~9Ft:ee that corresponds 
to the month in which the tax was paid. 
The credit mli5_t.--se 
e:laimee-~£-~-~~~~~-fi:lee-w~_t.h~£-~-~~~&-fF9m-_t.h€-~~~~-whieh 
t:he--r-€-t.-&.i-:1.-€-r'--~a~eh~s-eG--t.Re--i-t.-em--aRe may not be claimed if the 
item WaS-1i5ee has been withdrawn from inventory by the retailer 
for the retailer's own use prior to its sale. 
Sec. 15. 36 MRSA §2908. as repealed and replaced by PL 1987, 
c. 402, Pt. A, §183, is repealed and the following enacted in its 
place: 
§2908. Refund of tax in certain cases; time limit 
A person who purchases and uses internal combustion engine 
fuel for any commercial use other than in the operation of a 
registered motor vehicle on the highways of this State or, except 
as provided in section 2910, in the operation of an aircraft and 
who has paid the tax imposed by this chapter on that fuel is 
entitled to reimbursement in the amount of the tax paid, less 1¢ 
per gallon, upon presenting to the State Tax Assessor a 
sworn 
statement accompanied by the original invoices or other evidence 
as the assessor may require. The statement must show the total 
amount of internal combustion engine fuel so purchased and used 
by that person for a commercial use other than in the operation 
of registered motor vehicles on the highways of this State or 
~n 
the operation of aircraft. 
A refund applllition on a form prescrioed by the Sta_te 
Ta~ 
Assessor must 
be filed to 
claim 
a 
refund pursuant to this 
section. Interest must be paid at the rate determined pursuant to 
section 186, calculated from the date of receipt of the monthly 
claim, for all proper claims not paid within 30 days of receipt. 
Applications for 
refu~dfLJllusLl;te filed with the assessor within 
months from the date of purchase. 
All fuel that qualifies for a refund under this section is 
subject to the use tax imposed by chapter 215. 
Sec. 16. 36 MRSA §2909, 2nd 11. as repealed and replaced by PL 
2003, c. 390, §14, is amended to read: 
Applications for refunds must be filed with the State Tax 
Assessor, on a form prescribed by the assessor and accompanied by 
the original invoices showing those purchases, within 9 12 months 
from the date of purchase. 
A refund may not be issued under this 
section unless the claimant's commutation fare revenue derived 
during the calendar quarter for which the refund is claimed is at 
least 60% of the claimant's total passenger fare revenue derived 
during that calendar quarter. 
Sec. 17. 36 MRSA §3215. last 1[. as repealed and replaced by PL 
2003, c. 390, §16, is amended to read: 
Applications for refunds must be filed with the State Tax 
Assessor, on a form prescribed by the assessor and accompanied by 
the original invoices showing those purchases, within 9 12 months 
from the date of purchase. 
A refund may not be issued under this 
section unless the claimant's commutation fare revenue derived 
during the calendar quarter for which the refund is claimed is at 
least 60% of the claimant's total passenger fare revenue derived 
during that calendar quarter. 
Sec. 18. 36 MRSA §3218, first and 2nd 111[, 
as 
repealed and 
replaced by PL 2003, c. 390, §17, are amended to read: 
A person who purchases and uses special fuel for any use 
other 
than operation of 
a 
registered motor 
vehicle 
on 
the 
highways of this StateT and who has paid the tax imposed by this 
chapter on that fuel, is entitled to reimbursement in the amount 
of the tax paid, less 1¢ per gallon, upon presenting to the State 
Tax 
Assessor 
a 
sworn 
statement 
accompanied 
by 
the 
original 
invoices or other evidence as the assessor may require. 
The 
statement must show the total amount of special fuel so purchased 
and used by that person other than in the operation of registered 
motor vehicles on the highways of this State aHS or in the 
operation of ai rcraft. 
Appli-eat,i-sas-- -f-E>-r- -F-e-~1*-Bds-- Rltu;t.--he--fJ,,les 
witR-tRe-assesse~-wi-tRi-H-l§-meHtRs-E~em-tRe-sate-eE-pH~eRaseT 
A meHtRly refund application on a 
form prescribed by the 
assessor may must be filed at--t.J:le-cl-{}6-€--o-t--aay-meHtR to claim a 
refund pursuant to this section. 
Interest must be paid at the 
rate determined pursuant to section 186, calculated from the date 
of receipt of the monthly claim, for all proper claims not paid 
wi thin 30 days of receipt. 
NetRi-H~--in---t.ai£--p-aF-a<JF-ap-a--may--Be 
eeHst~Hee--t.~-~~~~-t,~-appli-eaHt-.f~~~~~~~~~a-aF-~F-~y-~epe~ts 
as-~e£~~i~~~~t,~B--~6g9T Applications for refunds must be 
filed with the 
assessor within 
months 
from 
the 
date 
of 
purchase. 
Sec. 19. 36 MRSA §5142. sub-§ 1, as amended by PL 2003, c. 391, 
§6, is further amended to read: 
1. 
General. 
The 
Maine 
adjusted 
gross 
income 
of 
a 
nonresident individual derived from or connected with sources in 
this State is the sum of the following: 
A. 
The net amount of items of income, 
gain, 
lossT and 
deduction entering into the nonresident individual's federal 
adjusted gross income that are derived from or connected 
with sources in this State including (i) the individual's 
distributive 
share 
of 
partnership 
or 
limited 
liability 
company income and deductions determined under section 5192, 
(ii) the individual's share of estate or trust income and 
deductions 
determined under 
section 5l76 T 
and (iii) 
the 
individual's 
pro 
rata 
share 
of 
the 
income 
of 
an 
S 
corporation derived from or connected with sources in this 
State; and 
B. 
The portion of the modifications described in section 
5122, 
subsections 1 and 2 that relates to income derived 
from or connected with sources in this State, including any 
modifications attributable to the nonresident individual as 
a partner of a partnership, shareholder of an S corporation, 
member of a limited liability company or beneficiary of an 
estate or trustf-aHs-,_ 
bT--P£e€eess-.f~~~~-~~~~~~~&&F-y-~r-~ri-s-t,at,e-bette 
tie*ets-p~£€RaSes-i~-~~tr~~~,-~~~-paym&at,s--~eeei-ves 
E~em-~-~F-4-pa£t.y-~~--t,ae--t.~~~£.fe~-~~-tae-~i~~-~~-EHtH~e 
p~eeeess-~elates-te-aHy-sHeR-ti-e*etsT 
Sec. 20. 36 MRSA §5142, sub-§2, as enacted by P&SL 1969, c. 
154, Sec. F, is amended to read: 
2. 
Attribution. Items of income, gain, lossr and deduction 
derived from or connected with sources within this State are 
those items attributable to: 
A. 
The ownership or disposition of any interest in real or 
tangible personal property in this State; aHa 
B. 
A business, trade, profession or occupation carried on 
in this StateT; and 
~. 
Proceeds from any 
gamblip.s~ti vi ty conducted in this 
State or lottery tickets purchased in this State, including 
payments received from a 3rd party for the transfer of the 
rights 
to 
future 
proceeds 
related to 
any 
such gambling 
activity or lottery tickets. 
Sec. 21. 36 MRSA §5142. sub-§8. as repealed and replaced by PL 
2003, c. 673, Pt. E, §1 and affected by §3, is repealed. 
Sec. 22. 36 MRSA §5142. sub-§8-A is enacted to read: 
8-A. 
Minimum 
taxabi..lity 
thr~sho,-""l,-,d,"-,."-----_-"M~i"-,n"-",-im,-"-"u"-,m-,-------,,,t,,,,a,,,x,-,a,,-,b,,-,~±-· -",-l--"i,-,t~y 
thresholds for nonresidents are as follows. 
A. 
Compensation received during any taxable year after 2003 
for 
personal 
services 
performed 
in 
the 
State 
prior 
to 
January 1. 2004 is Maine-source income subject to taxation 
under this Part if the nonresident taxpayer is present in 
the State performingLpersonal services for more than 10 days 
during that taxable year. 
B. 
Compensation received during any taxable year after 2003 
for personal services performed in this State after December 
31. 
2003 is Maine-source income subject to taxation under 
this Part if the nonresident taxpayer was present in the 
State performing personal services for more than 10 days 
during 
the 
year 
in 
which 
the 
personal 
services 
were 
performed. 
Sec. 23. 36 MRSA ~5220. sub-~2. as amended by PL 2003, c. 673, 
Pt. E, §2 and affected by §3, is further amended to read: 
2. 
Nonresident individuals. 
Every nonresident individual 
who, 
pursuant to this Part, has a Maine individual income tax 
liability 
for 
the 
taxable 
year. 
An 
individual 
whose 
only 
Maine-source 
income 
is 
compensation 
for 
personal 
services 
performed in Maine that is excluded from Maine adjusted gross 
income by the threshold contained in section 5142, subsection g 
8-A is not subject to taxation under this Part and need not file 
a return; 
Sec. 24. 36 MRSA §5250-B, sub-§l, ,C, as enacted by PL 2003, 
c. 20, Pt. AA, §1 and affected by §6, is amended to read: 
C. 
"Pass-through entity" means a corporation that for the 
applicable tax year is treated as an S corporation under the 
CodeT 
and 
a 
general 
partnership, 
limited 
partnership, 
limited 
liability partnership, 
~F1:i6~T 
limited 
liability 
company or similar entity that for the applicable tax year 
is not taxed as a C corporation for federal tax purposes. 
For purposes of this section, "pass-through entity" does not 
include a financial institution subject to tax under chapter 
819. 
Sec. 25. 36 MRS A §5276, sub-§l, as amended by PL 1991, c. 546, 
§36, is further amended to read: 
1. 
General 
rule. 
The 
State 
Tax 
Assessor, 
within 
the 
applicable period of limitations, may credit an overpayment of 
income tax, including an overpayment reported on a joint return, 
and 
interest 
on 
61:ieh 
the 
overpayment 
against 
any liability 
arising from a redetermination pursuant to section 6211 or any 
liability in respect of any tax imposed under this Title 9H owed 
~ the taxpayer, or ~ the taxpayer's spouse in the case of a 
joint 
returnT-~-maae-~~-9veFpaymeH~T-~-~he. The balance, 
after any setoff pursuant to section 5276-A, must be refunded by 
the Treasurer of State. 
Sec. 26. 36 MRSA §5276, sub-§6 is enacted to read: 
6. 
Overpayment by pass-through entity. 
If there has been 
an overpayment of tax required to be withheld under section 
5250-B, refund must be made to the pass-through entity only to 
the extent that the amount of the overpayment was not deducted 
and withheld by the pass-through entity. 
Sec. 27. 36 MRSA §6211, as enacted by PL 1987, c. 516, §§3 
and 6, is amended to read: 
§6211. Audit of claim 
If, on the audit of any claim filed under this chapter, the 
State Tax Assessor determines the amount to have been incorrectly 
determined, he the assessor shall redetermine the claim and shall 
notify the claimant of the redetermination and hi6 the reasons 
for it. The redetermination 6han-ee-.f-i-na-l--un-1-e-s-s--appe-a-1-ed-t=e--~he 
S~a~e --'l!aH- - A-s-seSS9£- --w-i-1:h-in- - -MJ- -€lays- - -B-£- -H9~iee is reviewable in 
accordance with section 151. 
If the claim has been paid, the 
amount paid in excess of that legally due is subject to interest 
at the rate determined pursuant to section 186. 
The assessor may 
credit a benefit payable to a claimant under this chapter against 
a liability of that claimant pursuant to this section. 
Sec. 28. 36 MRSA §6212, as amended by PL 1989, c. 534, Pt. A, 
§9, is repealed and the following enacted in its place: 
§6212. Denial of claim 
1. Fraudulent claim. If the State Tax Assessor determines 
that a claim under this chapter is excessive and was filed with 
fraudulent intent, the claim must be disallowed in full. If the 
claim 
has 
been 
paid, 
the 
amount 
paid 
may 
be 
recovered 
by 
assessment, collection and enforcement in the manner provided in 
chapter 
7. 
A person 
who, 
with 
fraudulent 
intent, 
files 
or 
prepares an excessive claim, 
as~ists in the preparation or filing 
of an excessive claim or supplies information in support of an 
excessive claim commits a Class E crime. 
2. Negligent claim. If the State Tax Assessor determines 
that a claim under this chapter is excessive and was negligently 
prepared, the amount claimed in excess of that legally due plus 
lOOt> of the corrected claim must be disallowed. If the claim has 
been paid, the amount disallowed mav be recovered by assessment, 
collection and enforcement in the manner provided in chapter 7. 
3. Unpaid liabil,Lty. A :eerson who has an unpaid liability 
arising from this section and the spouse of that person are 
disqualified from receiving benefits under this chapter. 
Sec. 29. Application. Those sections of this Act that enact 
the Maine Revised Statutes, Title 36, section 187-B, subsection 
5-B and section 193, subsection 2, paragraphs A and B apply to 
returns filed for periods beginning on or after January 1, 2006. 
That section of this Act that amends Title 36, section 1811-B 
applies to sales occurring on or after September 1, 2005. 
Those 
sections 
of 
this 
Act 
that 
amend 
Title 
36, 
section 
5142, 
subsections 1 and 2 and section 5250-B, subsection 1, paragraph C 
apply to tax years beginning on or after January 1, 2005. 
Those 
sections of this Act that repeal the Maine Revised Statutes, 
Ti tle 36, section 5142, subsection 8 and enact Title 36, section 
5142, subsection 8-A apply to tax years beginning on or after 
January 1, 2004. 
SUMMARY 
This bill makes the following changes to the laws governing 
taxation. 
It authorizes employees of the Department of Administrative 
and Financial Services, Bureau of Revenue Services to represent 
the bureau in District Court at arraignments for violation of any 
criminal provision of the Maine Revised Statutes, Title 36. 
It amends 
the definition of "tax" to include any amount 
assessed by the State Tax Assessor under Title 36. 
It establishes a civil penalty for persons who are required 
to file returns electronically and who fail to do so. 
It permits disclosure of confidential tax information to the 
Department of Health and Human Services for purposes related to 
the administration and collection of the new hospital tax and the 
service provider tax. 
It 
corrects 
the 
name 
of 
information pertaining to 
the 
credit may lawfully be disclosed. 
the 
state 
agency 
quality child care 
to 
which 
investment 
It authorizes the Bureau of Revenue Services to 
copies of pass-through entity tax returns to members, 
and certain other related parties of the entity. 
provide 
officers 
It permits 
the 
Bureau 
of 
Revenue 
Services 
to 
disclose 
whether a person has been issued a resale certificate under the 
sales and use tax law. 
It authorizes the Bureau of Revenue Services to disclose to 
the 
Department 
of 
the 
Secretary of 
State, 
Bureau 
of 
Motor 
Vehicles or the Department of Inland Fisheries and Wildlife, 
Bureau of Administrative Services whether use tax has been paid 
on a vehicle or recreational vehicle. 
It clarifies the State Tax Assessor's authority to require 
electronic filing of payroll taxes by payroll processors and 
certain large employers. 
It extends the period within which a municipality that has 
experienced 
a 
sudden 
and 
severe disruption in its municipal 
valuation may request an adjustment to its equalized valuation by 
about 105 days. This will give municipal officials requesting an 
adjustment due to sudden and severe disruption the same filing 
period as that provided under current law for filing an appeal on 
the equalized valuation or minimum assessing standards. 
It clarifies that film production qualifies as production 
for purposes of the sales and use tax law. 
It amends the definition of "retail sale" to provide that 
sales for resale are not retail sales when made to the holder of 
a valid resale certificate or to an out-of-state retailer that is 
not required to register as a seller in the State. 
It makes the distribution of natural gas a taxable service 
under the sales and use tax law. This will ensure consistency in 
the 
taxation 
of 
charges 
for 
distribution 
of 
natural 
gas 
regardless of whether they are bundled with the sale of the gas. 
It extends the period for which a 
resale certificate is 
effective from one year to 3 years. 
It provides that a credit for sales tax paid by a retailer 
on purchases for resale may be claimed on the return filed for 
the period in which the tax was paid, rather than on the return 
filed for the period in which the item was sold. 
It decreases the period for requesting an off-road refund 
under the gasoline tax law from 
months to 12 
months for 
consistency with other similar provisions, clarifies that the l¢ 
reduction in the reimbursement applies to each gallon of fuel and 
that refund applications may be filed for other than monthly 
periods and eliminates convoluted and archaic language. 
It increases the period 
refund under the gasoline tax 
consistency with other similar 
for requesting a 
common carrier 
law from 9 months to 12 months for 
provisions. 
It increases the period for 
refund under the special fuel tax 
for consistency with other similar 
requesting a 
common carrier 
law from 9 months to 12 months 
provisions. 
It decreases the period for requesting an off-road refund 
under the special fuel tax law from 15 months to 12 months for 
consistency with other similar provisions and clarifies that the 
l¢ reduction in the reimbursement applies to each gallon of fuel 
and that refund applications may be filed for other than monthly 
periods. 
It requires nonresident taxpayers to include in Maine-source 
income 
any 
winnings 
from 
wagering 
or 
gambling 
activities 
conducted in Maine. 
It clarifies 
that 
trusts 
and 
entities 
subject 
to 
the 
franchise 
tax 
on financial institutions are 
not 
required to 
withhold 
Maine 
income 
taxes 
from 
distributable 
Maine-source 
income of nonresident members. 
It 
authorizes 
setoff 
of 
income 
tax 
liabilities 
arising 
from 
redeterminations 
Residents Property Tax Program. 
refunds 
against 
under 
the 
Maine 
It bars a 
refund of overpaid withheld income taxes to a 
pass-through entity if the overpayment results from income tax 
actually withheld from members of the pass-through entity and 
remitted 
to 
the 
Department 
of 
Administrative 
and 
Financial 
Services, Maine Revenue Services pursuant to the Maine Revised 
Statutes, Title 36, section 5250-B. 
Instead, the overpayment is 
refunded directly to 
the 
individual member 
when that member 
claims a withholding credit on the member's individual income tax 
return. 
This provision is necessary to prevent pass-through 
entities from receiving a refund of income tax withholding that 
is also claimed as a credit on the Maine income tax return of the 
members of the pass-through entity. 
It provides for accrual of interest on debts attributable to 
a redetermination under the Maine Residents Property Tax Program 
and 
authorizes 
setoff 
of 
current-year 
benefits 
to 
recover 
overpayments from prior years. It also clarifies that appeals of 
redeterminations 
are 
governed 
by Title 
36, 
section 
and 
eliminates gender-specific language. 
It clarifies procedures relating to denial and recovery of 
excessive claims attributable to fraud or negligence under the 
Maine Residents Property Tax Program, replaces the special 1% per 
month rate of interest applicable to these debts with a rate 
generally applicable to overdue taxes and clarifies that intent 
is an element of the crime of filing a fraudulent claim for the 
claimant 
as 
well 
as 
for 
the 
preparer 
or 
the 
supplier 
of 
information or an assistant of those persons. 
It clarifies that compensation received after 
2003 
from 
personal services performed in the State prior to 2004 by 
a 
nonresident individual is taxable 
to 
the State only if the 
personal services are performed in the State for more than 10 
days during the year in which the compensation is received. 
It 
further 
clarifies that 
compensation 
received after 
2003 
for 
personal 
services 
performed 
after 
2003 
by 
a 
nonresident 
individual is taxable to the State only if the personal services 
are performed in the State for more than 10 days during the year 
in which the compensation was earned.