An Act Concerning Technical Changes to the Tax Laws
Maine Legislature, Session 122, LD 1751
Committee: Taxation
Sponsors: PERRY, WOODBURY, McCORMICK
Amends: 36 MRSA §1752, 36 MRSA §1760, 36 MRSA §4064, 36 MRSA §5200, 36 MRSA §5203-C, 36 MRSA §5206-D, 36 MRSA §5219-D, 36 MRSA §5219-Q, 36 MRSA §5220, 36 MRSA §5255, 36 MRSA §6201, 36 MRSA §6656, 38 MRSA §2201

Legislative Document 
No. 1751 
S.P.668 
In Senate, December 30, 2005 
An Act Concerning Technical Changes to the Tax Laws 
Submitted by the Department of Administrative and Financial Services pursuant to Joint 
Rule 204. 
Received by the Secretary of the Senate on December 28,2005. Referred to the Committee 
on Taxation pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 401. 
Presented by Senator PERRY of Penobscot. 
Cosponsored by Representative WOODBURY of Yarmouth and 
Representative: McCORMICK of West Gardiner. 
Primed on recycled paper 
JOY J. O'BRIEN 
Secretary of the Senate 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §1752, sub-§6-C is enacted to read: 
6-C. 
Manuf~ctured housing. 
"Manufactured housing" has the 
same meaning as defined in Title 10. section 9002. subsection 7. 
Sec. 2. 36 MRSA §1760, sub-§23-C, as affected by PL 2003, c. 
614, §9 and amended by c. 688, Pt. B, §12 and affected by §13, is 
further amended to read: 
23-C. 
Certain 
vehicles 
purchased 
or 
leased 
by 
nonresidents. 
Sales or leases of the following vehicles to a 
nonresident 
if 
the 
vehicle 
is 
intended 
to 
be 
driven 
or 
transported outside the State immediately upon delivery: 
A. 
Motor vehicles, except 
aa~9m99iJe6-~~~-f9~-~-peFige 
9f-~e££-~~~-yeaFT-~~~~~ai~-~~~-a&G-sa9wmebiles 
as-eefiaee-ia-~i~le-16T-see~i9a-l~QQ1~i 
(1) 
Automobiles rented for a period of less than one 
year; and 
(2) 
All-terrain vehicles and snowmobiles as defined in 
Title 12. section 13001; 
B. 
Semitrailers; 
C. 
Aircraft; and 
E. 
Camper trailers, including truck campers. 
I f the vehicles are 
regi~tered for use in the State wi thin 12 
months of the date of pur''chase, the person seeking registration 
is liable for use tax on the basis of the original purchase price. 
Notwi thstanding section 1752-A, for purposes of this SUbsection, 
the term "nonresident" may include an individual, an association, 
a society, a club, a general partnership, a limited partnership, 
a 
domestic or foreign limited liability company, 
a trust, an 
estate, a domestic or foreign corporation and any other legal 
entity. 
Sec. 3. 36 MRSA §1760, sub-§40, as repealed and replaced by PL 
1987, c. 497, §37, is amended to read: 
40. 
Manufactured housing. Sales of m9bile-~-~~~-a9mes 
iaelaaes: 
A. 
Used maai±e-aBa-maaQ±a~-hames manufactured housing; and 
B. 
New 
maai±e--aBG-~~~-~--~~~~-46--±imi~ea 
manufactured housing to the extent of all costs, other than 
materials, included in the sale price, but the exemption may 
not ~a exceed 50% of the sale price. 
Sec. 4. 36 MRS A §l952.B, as amended by PL 1991, c. 846, §26, 
is further amended to read: 
§1952-B. Manufactured housing 
The tax imposed by ehap~ers-6~~-~a-66§ this Part on the sale 
or use of aBy-~~-atmanufactured housing, 
as-~~~-~-~i~±e 
6Q-AT--&e-<!-t:-1on--4698T--s-ub&e-o-t-1on--~T--par-ag.t'-aph--AT except when the 
dealer has collected the 
tax in full, 
must 
be paid by the 
purchaser to the State Tax Assessor. 
The 
S~at.e--'I-aH--A66e6sal:' 
assessor shall provide a 
tax receipt to the purchaserT--wh-wh r 
QpaR. 
Upon request by the municipal officialsT asses-6-€>-£-6--o-1;.-a 
p±aB~a~iaB or 
the 
Maine 
Land 
Use 
Regulation 
Commission, 
~ 
receipt must be made available by the purchaser to certify that 
the tax impasee-ay-ehap~ers-6~1-Ea-669 has been paid, pursuant to 
Title 30-A, 
section 4358, 
subsection 4 or Title 30-A, 
section 
7060, sUbsection 1, paragraph C. 
A valid bill of sale from a dealer showing that the tax has 
been collected in full serves to certify that the tax impasee-ay 
ehapEers-~~~-~~-669 has 
been paid, 
pursuant to Title 30-A, 
section 
4358, 
subsection 
4, 
or 
Title 
30-A, 
section 
7060, 
subsection 1, paragraph C, in lieu of a tax receipt provided by 
the SEaEe-~aH-Assessa~ assessor. 
Sec. 5. 36 MRSA §4064, first 1r, 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 I, 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 either included in 
the 
decedent's 
federal 
gross 
estate 
or 
is 
Maine 
elective 
property. 
The 
amount 
of 
this 
tax is 
a 
sum 
equal 
to 
that 
proportion of the federal credit that the value of the decedent's 
Maine real and tangible personal property in this State bears to 
the value of the decedent's federal gross estate. All property 
values under this section are as finally determined for federal 
estate tax purposes, except that for estates of decedents dying 
after December 31, 2002 that do not incur a federal estate tax, 
all property values are as finally determined by the assessor in 
accordance with the Code as if the estate had incurred a federal 
estate tax. 
The share of the federal credit used to dptermine 
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. 6. 36 MRSA §5200. sub-§l. as enacted by PL 2005, c. 457, 
Pt. FFF, §l and affected by §2, is amended to read: 
1. 
Imposition and rate of tax. 
A tax is imposed for each 
taxable year at the following rates on each taxable corporation 
SF and on each group of corporations that derives income from a 
unitary business carried on by 2 or more members of an affiliated 
group: 
If the MaiRe income is: 
Not over $25,000 
$25,000 but not over $75,000 
$75,000 but not over $250,000 
$250,000 or more 
The tax is: 
3.5°" of MaiRe 
the income 
$875 plus 
7.93°~o 
of the excess 
over $25,000 
$4,840 plus 
8.33°'0 of the 
excess over 
$75,000 
$19,418 plus 
8.93°'0 of the 
excess over 
$250,000 
In the case of an affiliated group of corporations engaged in a 
unitary business with activity taxable only by Maine, the rates 
provided 
in this 
subsection 
are 
applied 
only 
to 
the first 
$250,000 of the Maine net income of the entire group and must be 
apportioned equally among the taxable corporations unless those 
taxable corporations jointly elect a different apportionment. The 
balance of the Maine net income of the entire group is taxed at 
8.93%. 
In the case of an affiliated group of corporations engaged in a 
unitary business with activity taxable both within and without 
this State, the rates provided in this subsection are applied 
only to the first $250,000 of the net income of the entire group 
and must be apportioned equally among the taxable corporations 
unless 
those 
taxable 
corporations 
jointly elect 
a 
different 
apportionment. The balance of the net income of the entire group 
is taxed at 8.93%. 
Sec. 7. 36 MRSA §5203-C, sub-§l, 1rD, as enacted by PL 2003, c. 
673, Pt. JJ, §3 and affected by §6, is amended to read: 
D. 
"Exemption amount" means 
the applicable exemption as 
provided by the Code, Section 55(d) as of December 31, 2002, 
except that tentative al ternati ve minimum taxable income as 
determined under paragraph R .G must be substituted in the 
computation 
of 
the 
phase-out 
under 
the 
Code, 
Section 
55(d)(3). 
Sec. 8. 36 MRSA §5203-C, sub-§4, 1rA, as enacted by PL 2003, c. 
673, Pt. JJ, §3 and affected by §6, is amended to read: 
A. 
A minimum tax credit is allowed against the liability 
arising under this Part for any taxable year other than 
withholding tax liability. 
The minimum tax credit equals 
the excess, if any, of the adjusted alternative minimum tax, 
reduced by the credit for tax paid to other jurisdictions 
determined under subsection 3 and the Pine Tree Development 
Zone tax credit provided by section 52l9-W, that was imposed 
for all prior taxable years beginning after 2003 over the 
amount allowable as a credit under this subsection for such 
prior taxable years, plus unused minimum tax credits from 
years beginning after 1990. 
Sec. 9. 36 MRSA §5206-D. sub-§9, as enacted by PL 1997, c. 
404, §5 and affected by §10, is amended to read: 
9. 
Loan. 
"Loan" means any extension of credit resulting 
from direct negotiations between the taxpayer and its customer, 
or the purchase, in whole or in part, of the extension of credit 
from 
another. 
beaB6--iBe~1::lae 
"Loan" 
includes 
participations, 
syndications and leases treated as loans for federal income tax 
purposes. 
beaas-ae "Loan" does not include properties treated as 
loans 
under 
the Code, 
Section 
as of December 
31. 
1995; 
futures 
or 
forward 
contracts; 
options; 
notional 
principal 
contracts 
such 
as 
swaps; 
credit 
card 
receivables, 
including 
purchased credit card relationships; noninterest-bearing balances 
due from depository institutions; cash items in the process of 
collection; 
federal 
funds 
sold; 
securities 
purchased 
under 
agreements 
to 
resell; 
assets 
held 
in 
a 
trading 
account; 
securities; interests in a 
REMIC 
or other mortgage-backed or 
asset-backed security; and other similar items. 
Sec. 10. 36 MRSA §5219-D, as amended by PL 1997, c. 504, §17, 
is repealed. 
Sec. 11. 36 MRSA §5219-Q, sub-§l, ,A, as enacted by PL 1999, 
c. 401, Pt. NNN, §6 and affected by §§8 and 9 and amended by PL 
2003, c. 689, Pt. B, §6, is further amended to read: 
A. 
Is accredited by an independent, nationally recognized 
program 
approved by the Department of Health and 
Human 
Services, Office of Heaa-S~aF~-aBa Child Care and Head Start; 
Sec. 12. 36 MRSA §5219-Q, sub-§l, ,B, as enacted by PL 1999, 
c. 401, Pt. NNN, §6 and affected by §§8 and 9 and amended by PL 
2003, c. 689, Pt. B, §6, is further amended to read: 
B. 
Utilizes recognized quality indicators for 
services approved by the Department of Health 
Services, Office of 
Heaa--S~aF~--aBa Child Care 
Start; and 
child care 
and Human 
and Head 
Sec. 13. 36 MRSA §5219-Q, sub-§l-A, as enacted by PL 1999, c. 
708, §47 and amended by PL 2003, c. 689, Pt. B, §6, is further 
amended to read: 
I-A. 
Certification. 
Upon application by an inv-estor, the 
Department of Health and Human Services, Office of Heaa-S~aF~-aBa 
Child Care and Head Start shall certify if an investment in a 
child care site contributed significantly toward the ability of 
the child care site to improve its level of child care services 
toward the goal of providing quality child care services. 
The 
department 
shall 
send 
a 
list of 
taxpayers 
making certified 
investments in the previous year to the State Tax Assessor by 
February 1st annually. 
Sec. 14. 36 MRSA §5220. sub-§3. as amended by PL 2003, c. 391, 
§11 and affected by §14, is further amended to read: 
3. 
Resident estates or trusts. Every resident estate or 
trust that has for the taxable year: 
A. 
Any Maine taxable income as defined in section 5163; SF 
B. 
Gross 
income of $10,000 or more, 
regardless of the 
amount of Maine taxable income; or 
C. 
A Maine income tax liability pursuant to this Part: 
Sec. 15. 36 MRS A §5220, sub-§4, as amended by PL 2003, c. 391, 
§11 and affected by §14, is further amended to read: 
4. 
Certain nonresident estates or trusts. Every nonresident 
estate or trust that has for the taxable year: 
A. 
Any Maine taxable income as determined under section 
5175, subsection 2; eF 
B. 
Gross 
income of $10,000 or more, 
regardless of the 
amount of Maine taxable income; ~ 
C. 
A Maine income tax liability pursuant to this Part: 
Sec. 16. 36 MRSA §5255, as amended by PL 1985, c. 535, §26, 
is further amended to read: 
§5255. Failure to withhold 
If--a A person who 
fails to deduct and withhold tax as 
requiredT--aRa--~Re£eaf~eF by 
this 
chapter 
is 
relieved 
from 
liability for that tax to the extent that the tax against which 
s\i9h .t.hgt tax may be credited is has been paidT--t-he---t.-aK--se 
Fe~\iiFea-~e-~~~-aaG-wi~hhela-£Ra~~-~~~~~G~-fFe~ 
~he--FeFseR, but 
the 
person shall is not ae 
relieved 
from 
liability 
for 
any 
additions 
to 
taxL 
penalties 
or 
interest 
otherwise applicable is with respect to 
s\i9h the failure to 
deduct and withhold tax as required by this chapter. 
Sec. 17. 36 MRSA §6201, sub-§9, as amended by PL 2005, c. 457, 
Pt. EEE, §1 and affected by §2, is further amended to read: 
9. 
Income. "Income" means the sum of Maine adjusted gross 
income 
determined 
in 
accordance 
with Part 
8; 
contributions, 
including catCh-up contributions, 
to any pension, 
annuity or 
retirement plan to the extent not included in Maine adjusted 
gross income, including contributions to an individual retirement 
account under Section 408 of the Code, 
a 
simplified employee 
pension plan, 
a 
salary reduction simplified employee pension 
plan, a savings incentive match plan for employees plan and a 
deferred compensation plan under Section 457 of the Code, 
and 
cash or deferred arrangements under Section 401 of the Code and 
qualified, or "Keogh," accounts; nontaxable contributions to a 
flexible spending arrangement under Section 125 of the Code; 
amounts excluded from gross income under See~ieRs-l69-aRa Section 
of the Code; distributions from ROTH 
IRAs; 
the amount of 
capital gains excluded from adjusted gross income; the absolute 
value of the amount of trade or business loss, net operating loss 
carry-over, capital loss, rental loss, farm loss, partnership or 
S Corporation loss included in adjusted gross income; alimony; 
inheritance; life insurance proceeds paid on death of insured; 
nontaxable lawsuit rewards, such as slander, libel and pain and 
suffering, excluding reimbursements such as medical 
and legal 
expenses 
associated with the case; 
support money; 
nontaxable 
strike benefits; the gross amount of any pension or annuity, 
including railroad retirement benefits; all payments 
received 
under the federal Social Security Act and state unemployment 
insurance 
laws; 
veterans' 
disability 
pensions; 
nontaxable 
interest received from 
the Federal Government or 
any of its 
instrumentali ties; 
interest 
or 
dividends 
on 
obligations 
or 
securities of this State and its political subdivisions 
and 
authorities; workers' compensation and the gross amount of "loss 
of time" insurance; and cash public assistance and relief, but 
not including relief granted under this chapter. "Income" does 
not include the first $5,000 ia--&Re of proceeds 
from 
a life 
insurance policy, whether paid in a lump sum or in the form of an 
annuity. 
"Income" does not include a rollover from an individual 
retirement 
account, 
pension 
or 
annuity 
fund 
or 
plan 
to 
an 
individual retirement account, pension or annuity fund or plan 
even if the 
amount 
of 
the 
rollover is 
includable in Maine 
adjusted gross income. 
"Income" also does not include gifts from 
nongovernmental sources or surplus foods or other relief in kind 
supplied by a governmental agency. 
Sec. IS. 36 MRS A §6652. sub-§l. as amended by PL 2005, c. 457, 
Pt. BBB, §1, is further amended to read: 
1. 
Generally. 
A person 
against 
whom 
taxes 
have 
been 
assessed pursuant to Part 2, except for chapters 111 and 112, 
with respect to eligible property and who has paid those taxes is 
entitled to 
reimbursement 
of 
those 
taxes 
from 
the State as 
provided in this chapter. 
The reimbursement under this chapter 
is 100°'b of the taxes assessed and paid with respect to eligible 
property, except that for claims filed for the application period 
that begins on August 1, 2006 the reimbursement is 90 0'0 of the 
taxes assessed and paid with respect to eligible property. 
For 
purposes of this chapter, a tax applied as a credit against a tax 
assessed pursuant to 
chapter 
or 
is 
a 
tax 
assessed 
pursuant to chapter 111 or 112. 
Eligible property is subject to 
reimbursement pursuant to this chapter for up to 12 property tax 
years, but the 12 years must be reduced by one year for each year 
during 
which 
a 
taxpayer 
included 
the 
same 
property 
in its 
investment credit base under section 9619-Q T 5219-E or 5219-M and 
claimed the credit provided in one or more of those sections on 
its income tax return, 
and reimbursement may not be made for 
taxes assessed in a year in which one or more of those credits is 
taken. 
A successor in interest of a person against whom taxes 
have been assessed with respect to eligible property is entitled 
to reimbursement pursuant to this section, whether the tax was 
paid by the person assessed or by the successor, as long as a 
transfer 
of 
the 
property in question to 
the 
successor 
has 
occurred and the successor is the owner of the property as of 
August 1stT of the year in which a claim for reimbursement may be 
filed pursuant to section 6654. 
For purposes of this paragraph, 
"successor in interest" includes the initial successor and any 
subsequent successor. 
When 
an eligible successor in interest 
exists, the successor is the only person to whom reimbursement 
under this chapter may be made with respect to the transferred 
property. 
Sec. 19. 36 MRSA §6656, as amended by PL 2005, c. 12, Pt. 
BBB, §4, is repealed and the following enacted in its place: 
S6656. Payment of claims 
1. 
Reimbursement 
claim. 
Notwithstanding 
any 
other 
provision of law, except as provided in section 6652 and section 
6662, upon receipt of a timely and properly completed claim for 
reimbursement, 
the State Tax Assessor shall certify that the 
claimant is eligible for reimbursement under this chapter. The 
assessor shall determine the benefit for each claimant and shall 
certify to the State Controller the amounts to be transferred to 
the 
Business 
Eguipment 
Tax 
Reimbursement 
reserve 
account 
established, maintained and administered by the State Controller 
from 
General 
Fund 
undedicated 
revenue 
within 
the 
individual 
income tax category. 
2. 
Pay certified amoqnts. 
The 
assessor shall pay 
the 
certified amounts to each approved applicant that gualifies for 
the benefit under this chapter by November 1st or within 90 days 
after receipt of the claim, whichever is later. For those claims 
for 
which 
payments 
are 
withheld 
pursuant 
to 
section 
6652, 
subsection 3, 
and with respect to which the assessor receives 
notification under 
that subsection that the 
report has 
been 
received, reimbursement must be paid by Noyember 1st or within 90 
days after the assessor receives the notification, whichever is 
later. Interest is not allowed on any payment made to a claimant 
pursuant to this chapter. 
Sec. 20. 38 MRSA §2201, last" as amended by PL 2001, c. 315, 
§5, is further amended to read: 
Funds 
related to administration may be expended only in 
accordance 
with 
allocations 
approved 
by 
the 
Legislature 
for 
administrative expenses directly related to the office's and the 
department's 
programs, 
including 
actions 
by 
the 
department 
necessary to abate threats to public health, safety and welfare 
posed 
by 
the 
disposal 
of 
solid 
waste. 
Funds 
related 
to 
operations may be expended only in accordance with allocations 
approved by the Legislature and solely for the development and 
operation of publicly owned facilities owned or approved by the 
office and for the repayment of any obligations of the office 
incurred under article 3. 
These allocations must be based on 
estimates of the actual costs necessary for the office and the 
department to administer their programs, 
to provide financial 
assistance 
to 
regional 
associations 
and 
to 
provide 
other 
financial assistance necessary to accomplish the purposes of this 
chapter. 
Beginning in the fiscal year ending on June 30, 1991 
and thereafter, the fund must annually transfer to the General 
Fund an amount necessary to reimburse the costs of the Bureau of 
~aHa~~eR Revenue Services incurred in the administration of ~i~±e 
69T--see~ieR--9619-~--aRa Title 
36, 
chapter 
719. 
Allowable 
expenditures 
include 
"Personal 
Services," 
"All 
Other" 
and 
"Capital 
Expenditures" 
associated with all office activities 
other than those included in the operations account. 
Sec. 21. Application. 
That section of this Act that amends 
the Maine Revised Statutes, Title 36, section 4064 applies to the 
estates of decedents who die on or after January 1, 2005. 
That 
section 
of 
this 
Act 
that 
amends 
Title 
36, 
section 
5200, 
subsection 1 applies retroactively to tax years beginning on or 
after January 1, 
2005. 
Those sections of this Act that amend 
Title 
36, 
section 
5203-C, 
subsection 
1, 
paragraph 
D 
and 
subsection 
4, 
paragraph 
A 
apply 
retroactively 
to 
tax 
years 
beginning on or after January 1, 2004. Those sections of this Act 
that amend Title 36, 
section 5220, 
subsections 3 and 4 apply 
retroactively to tax years beginning on or after January 1, 2003. 
That section of this Act that amends Title 36, section 6201, 
subsection 
applies to claims for benefits under the Maine 
Residents Property Tax Program filed for application periods that 
begin on or after August 1, 2005. That section of this Act that 
repeals and replaces Title 36, section 6656 applies to property 
tax years beginning on or after April 1, 2004. 
SUMMARY 
This bill makes the following changes to the laws governing 
taxation. 
It adds a definition of "manufactured housing" to the sales 
and use tax law. The definition is the one that has been applied 
administratively 
by 
the 
Department 
of 
Administrative 
and 
Financial Services, Bureau of Revenue Services. 
It eliminates a sales tax exemption that is not currently 
being administered because the Office of the Attorney General has 
advised the Bureau of Revenue Services that it violates the 
commerce clause of the United States Constitution. The section 
also clarifies an ambiguous cross-reference. 
H) 
• 
It replaces the imprecise phrase "mobile and modular homes" 
with the defined term "manufactured housing." 
It eliminates a superfluous cross-reference and eliminates 
other redundant language. 
It enacts various technical changes to clarify a statute 
enacted in 2005 that altered the Maine income tax calculation for 
multistate corporations. 
It corrects an erroneous cross-reference. 
It clarifies that the Pine Tree Development Zone tax credit 
cannot be carried forward indefinitely to offset future income in 
years beyond the Pine Tree Development Zone time period. This is 
the interpretation currently being applied administratively by 
the Bureau of Revenue Services. 
It clarifies a cross-reference to the Internal Revenue Code. 
The section referred to has been repealed. 
It eliminates 
the 
solid waste 
reduction 
investment 
tax 
credit, which is no longer available. 
It corrects the name of the state agency that certifies 
investments for the quality child care investment credit. 
It clarifies that estates and trusts must file 
a 
Maine 
income tax return if they owe Maine income tax, even if their 
Maine taxable income is zero or less. This is the interpretation 
currently being applied administratively by the Bureau of Revenue 
Services. 
It 
corrects 
a 
punctuation 
error, 
language and corrects cross-references. 
standardizes 
archaic 
It clarifies the definition of "income" for purposes of the 
Maine Residents Property Tax Program. 
It clarifies the procedure for payment of claims under the 
Business Equipment Tax Reimbursement program. 
It clarifies that Maine elective property owned by an estate 
of a nonresident is subject to Maine estate tax. 
Page lO-LR2950(1)