An Act To Reform the Income Tax for Middle-income and Lower-income Families
Maine Legislature, Session 122, LD 1605
Committee Amendment CA_A_S618 (Senate)
Amends: 36 MRSA §5219-N, 36 MRSA §5124-A, 36 MRSA §5111, 5 MRSA §13090-K, 36 MRSA §1811, 36 MRSA §1752

COMMITTEE AMENDMENT .. A .. to S.P. 586, L.D. 1605, Bill, "An 
Act To Reform the Income Tax for Middle-income and Lower-income 
Families" 
Amend the bill by striking out everything after the enacting 
clause and before the summary and inserting in its place the 
following: 
'PART A 
Sec. A-I. 36 MRSA §5219-N, sub-§I, as amended by PL 2003, c. 
390, §48, is repealed and the following enacted in its place: 
1. 
Generally. 
Except as provided in subsection 2, 
an 
individual in a category described in this subsection is allowed 
a credit equal to the tax otherwise imposed on that individual by 
this Part. 
In no case may this credit reduce the Maine income 
tax to less than zero. 
An individual qualifies for the credit 
described in this section if: 
A. 
The individual is filing as a single individual or a 
head of household or is married and filing se!>arately and 
the individual's Maine taxable income determined as if the 
individual were a resident individual for the entire year is 
$4,000 or less: or 
B. 
The individual is filing a married joint return and the 
taxable 
income 
on 
the 
return 
determined 
as 
if 
the 
individuals were resident individuals for the entire year is 
$8,000 or less. 
Sec. A-2. 
Application. 
This 
Part 
applies 
to 
tax 
years 
beginning on or after January 1, 2007. 
Page l-LR0362(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to S.P. 586, L.D. 1605 
PARTB 
Sec. B-1. 36 MRSA §5124-A, first" as amended by PL 2005, c. 
12, Pt. P, §5, is further amended to read: 
The standard deduction of a resident individual is equal to 
the standard deduction as determined in accordance with the Code, 
Section 63, except that for tax years beginning after 2002 but 
before 2007, the Code, Section 63(c)(2) must be applied as if the 
basic standard deduction is $5,000 in the case of a joint return 
and a 
surviving spouse and $2,500 in the case of a 
married 
individual filing a separate return. 
PARTe 
Sec. C-l. 36 MRSA §5111, sub-§I-B, as enacted by PL 1999, c. 
731, Pt. T, §3, is amended to read: 
I-B. 
Single individuals and married persons filing separate 
returns; tax years beginning 2002. 
For tax years beginning on or 
after January 1, 2002, for single individuals and married persons 
filing separate returns: 
If Maine Taxable income is: 
Less than $4,200 
At least $4,200 but 
less than $8,350 
At least $8,350 but 
less than $~iT+QQ $27,500 
$~iT+gg $27,500 or more 
The tax is: 
2% of the Maine 
taxable income 
$84 plus 4.5% of 
the excess over 
$4,200 
$271 plus 7% of 
the excess over 
$8,350 
$856 plus 8.5% 
of the excess 
over $~iT+QQ 
$27,500 
Sec. C-2. 36 MRSA §5111, sub-§2-B, as enacted by PL 1999, c. 
731, Pt. T, §5, is amended to read: 
2-B. 
Reads of households; tax years beginning 2002. 
For 
tax years beginning on or after January 1, 2002, for unmarried 
individuals or legally separated individuals who qualify as heads 
of households: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .. J4 .. to S.P. 586, L.D. 1605 
If Maine Taxable income is: 
Less than $6,300 
At least $6,300 but 
less than $12,500 
At least $12,500 but 
less than $69 r Q9Q $41,250 
The tax is: 
2% of the Maine 
taxable income 
$126 plus 4.50,.0 
of the excess 
over $6,300 
$405 plus 7% of 
the excess over 
$12,500 
$1, 284 plus 8.50,.0 
of the excess 
over $69 r 9a9 
$41, 250 
Sec. C-3. 36 MRSA §5111, sub-§3-B, as enacted by PL 1999, c. 
731, Pt. T, §7, is amended to read: 
3-B. 
Individua1s filinq married joint return or survivinq 
spouses; tax years beqinninq 2002. 
For tax years beginning on or 
after January 1, 
2002, 
for 
individuals filing married joint 
returns or surviving spouses permitted to file a joint return: 
If Maine Taxable income is: 
Less than $8,400 
At least $8,400 but 
less than $16,700 
At least $16,700 but 
less than $iir4QQ $55,000 
$iir4QQ $55,000 or more 
The tax is: 
2% of the Maine 
taxable income 
$168 plus 4.5% 
of the excess 
over $8,400 
$542 plus 70,.0 of 
the excess over 
$16,700 
$1,711 plus 8.5°t> 
of the excess 
over $iir4QQ 
$55,000 
Sec. C-4. 
Application. 
This 
Part 
applies 
to 
tax 
years 
beginning on or after January 1, 2007. 
COMMITTEE AMENDMENT 
,to. 
~. 
COMMITTEE AMENDMENT "~,, to S.P. 586, L.D. 1605 
PARTD 
Sec. D-l. 5 MRSA §13090-K, sub-§2, as enacted by PL 2001, c. 
439, Pt. uuuu, §1, is amended to read: 
2. 
Source of fund. 
Beginning July I, 2003 and every July 
1st thereafter, 
the State Controller shall 
transfer 
to 
the 
Tourism Marketing Promotion Fund an amount, as certified by the 
State Tax Assessor, that is equivalent to 5q.o of the +% 
8°1:> tax 
imposed 
on 
tangible 
personal 
property 
and 
taxable 
services 
pursuant to Title 36, section 1811, for the first 6 months of the 
prior fiscal year after the reduction for the transfer to the 
Local Government Fund as described by Title 3D-A, section 5681, 
subsection 5. 
Beginning on October 1, 2003 and every October 1st 
thereafter, the State Controller shall transfer to the Tourism 
Marketing Promotion Fund an amount, as certified by the State Tax 
Assessor, that is equivalent to 5% of the +% 8% tax imposed on 
tangible personal property and taxable services pursuant to Title 
36, section 1811, for the last 6 months of the prior fiscal year 
after the reduction for the transfer to the Local Government 
Fund. 
The tax amount must be based on actual sales for that 
fiscal year 
and may 
not consider 
any accruals that may 
be 
required by law. 
The amount transferred from General Fund sales 
and use tax revenues does not affect the calculation for the 
transfer to the Local Government Fund. 
Sec. D-2. 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% 
8% 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% 8% 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% 8% on the value of 
prepared 
food: 
and 
5% 
on the value of all other tangible 
personal property and taxable services. 
Value is measured by the 
sale price, except as otherwise provided. 
Sec. D-3. Effective date. 
This Part takes effect January 1, 
2007. 
PARTE 
Sec. E·l. 36 MRSA §1752, sub-§l-H is enacted to read: 
1-B. 
AllluseJBent and recreational services. 
"Amusement and 
recreational services" means: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to S.P. 586, L.D. 1605 
A. 
All services provided by health clubs, fitness clubs, 
athletic clubs and personal fitness trainers and coaches, 
other than the sale of meals 
and the rental of living 
guarters; 
B. 
Admission to fairs. including state fairs, county fairs, 
agricultural fairs and book fairs; 
C. 
Admission to sporting events. including horse races; 
D. 
Admission to exhibition shows that are open to the 
general public, including flower and garden shows, 
animal 
shows and auto shows and watercraft shows; 
E. 
Admission to motion pictures, concerts. plays, musicals. 
ballets. operas, 
comedy shows. puppet shows. magic shows, 
carnivals, circuses and theatrical productions; 
F. 
Admission to dance halls, amusement parks. theme parks, 
miniature golf courses. snow parks and water parks; 
G. 
All services, 
including lessons, 
provided by flight 
centers, 
marinas, 
golf courses, 
driving ranges, 
shooting 
ranges, alpine ski areas, cross cpuntry ski touring centers, 
ice skating rinks, 
roller-skating rinks, 
dance halls and 
centers, 
bowling 
centers. 
swimming 
pools, 
racetracks, 
billiard parlors, riding stables, whitewater rafting centers 
and recreational athletic facilities of any kind. other than 
the sale of meals and the rental of living quarters; 
H. 
Services provided by, 
and the charging of fees for 
admission 
to 
or 
membership 
in, 
commercial 
recreational 
membership 
organizations, 
including 
health 
and 
fitness 
clubs, golf clubs, tennis clubs and country clubs, whether 
payable by annual fee or otherwise; 
I. 
Admission 
to privately 
owned 
and 
operated 
museums. 
planetariums. historical sites, zoological parks. zoological 
gardens, wild animal parks. petting zoos, botanical gardens 
and aquariums; and 
J. 
Airplane, 
helicopter, 
balloon, 
dirigible. 
blimp. 
watercraft. railroad. bus and wagon rides for amusement or 
sight-seeing purposes. 
Sec. E-2. 36 MRSA §1752, sub-§17-B, as enacted by PL 2003, c. 
673, Pt. V, §19 and affected by §29, is amended to read: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to S.P. 586, L.D. 1605 
17-B. 
Taxable service. 
"Taxable service" means the rental 
of living quarters in a hotel, rooming house, tourist or trailer 
camp; 
the 
transmission 
and distribution of electricity; 
the 
rental or lease of an automobile; 
amusement and recreational 
services: and the sale of prepaid calling service. 
Sec. E-3. Effective date. 
This Part takes effect January 1, 
2007. 
PARTF 
Sec. F-l. 36 MRSA §1752, sub-§3-B, as amended by PL 1999. c. 
698, §l and affected by §3, is further amended to read: 
3-B. 
Grocery 
staples. 
"Grocery 
staples" 
means 
food 
products ordinarily consumed for human nourishment. 
"Grocery staples" does not include spirituous, malt or vinous 
liquors; soft drinks, iced tea, sodas or beverages such as are 
ordinarily dispensed at bars or soda fountains or in connection 
with bars or soda fountains; medicines, 
tonics, 
vitamins and 
preparations in liquid, 
powdered, 
granular, 
tablet, 
capsule. 
lozenge or pill form, sold as dietary supplements or adjuncts, 
except when sold on the prescription of 
a 
physician; water, 
including mineral bottled and carbonated waters and ice; dietary 
substitutes; candy and confections; snack food: and prepared food. 
Sec. F-2. 36 MRSA §1752, sub-§l4-F is enacted to read: 
14-F. 
Snack food. 
"Snack food" means 
any item that is 
ordinarily sold for consumption without further preparation or 
that reguires no preparation other than combining the item with a 
liguid: that may be stored unopened without refrigeration. except 
that ice cream. ice milk. frozen yogurt and sherbet are snack 
foods: and that is not generally considered a major component of 
a well-balanced meal. 
"Snack food" includes. but is not limited 
to. 
corn chips. 
potato chips. 
processed fruit snacks. 
fruit 
rolls. fruit bars. popped popcorn. pork rinds, pretzels. cheese 
sticks. cheese puffs. granola bars. breakfast bars. bread sticks. 
roasted nuts. 
doughnuts, 
cookies. 
crackers. pastries. 
toaster 
pastries. croissants. cakes. pies. ice cream cones. marshmallows, 
marshmallow creme. soft drinks. ice cream sauces, ready-to-eat 
puddings. beef jerky. meat bars and dips. 
Sec. F-3. Effective date. 
This Part takes effect January 1, 
2007. 
PARTG 
Sec. G-l. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
The 
following 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT .. A .. to S.P. 586, L.D. 1605 
ADMINISTRATIVE AND FINANCIAL SERVICES, 
DEPAR'DIENT OF 
Maine Revenue Services 
0002 
Initiative: 
Provides one-time funds for the administrative costs 
associated with the changes to the sales and use tax. 
GENERAL FlJlIID 
All Other 
GENERAL FUND TOTAL 
2005-06 
$0 
$0 
2006-01 
$37,750 
$37,750' 
SUMMARY 
This bill makes changes to the State's sales tax and income 
tax. 
The income tax changes apply to tax years beginning on or 
after January 1, 2007. 
The sales tax changes take effect January 
1, 2007. 
Part A expands the low-income tax credit from $2,000 to 
$4,000 for individuals, married persons filing separate returns 
and heads of household and from $2,000 to $8,000 for taxpayers 
filing married joint returns. 
Part 
B restores 
the 
income 
tax 
married persons to the 
same 
amount 
deduction. 
standard deduction 
for 
as 
the federal standard 
Part 
C 
increases 
the 
taxable 
income 
thresholds 
for 
application of the highest income tax rate under the individual 
income tax to $31,000 for single individuals and married persons 
filing separate returns, $46,500 for persons filing as heads of 
household and $62,000 for persons filing married joint returns. 
Part D increases the sales tax on meals and lodging from 7% 
to 8".t.. 
Part E extends the sales tax to amusement and recreational 
services. 
Part F extends the sales tax to snack food. 
Part G adds an appropriations and allocations section. 
FISCAL ~OTE REQUJRUj 
~~eea~~ 
COMMITTEE AMENDMENT 
Approved: 04/13/06~ae 
LD 1605 
LR 0362(02) 
An Act To Reform the Income Tax for Middle-income and Lower-income Families 
Fiscal Note for Bill as Amended by Committee Amendment ''Il'' 
Committee: Taxation 
Net Cost (Savings) 
General Fund 
Appropriations! Allocations 
General Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
2005-06 
$0 
$0 
$0 
$0 
2006-07 
$4,551,667 
$37,750 
($4,513,917) 
($242,581) 
Projections 
2007-08 
$1,927,724 
$0 
($1,927,724) 
($105,740) 
The net General Fund cost of the bill is estimated to be $4,551,667 in fiscal year 2006-07. 
Projections 
2005-06 
2006-07 
2007-08 
General Fund Summary 
Individual Income Tax 
$0 
($23,694,683) 
($60,204,724) 
Sales and Use Tax 
$0 
$19,180,767 
$58,276,999 
$0 
($4,513,917) 
($1,927,724) 
LR0362(2) - Fiscal Note - Page 1 of 1 
Projections 
2008-09 
$2,188,623 
($2,188,623) 
($120,051) 
Projections 
2008-09 
($62,047,618) 
$59,858,995 
($2,188,623)