An Act To Cut Taxes on Maine Residents by over $140,000,000 Reported by the Majority from the Joint Standing Committee on Taxation pursuant to Joint Order 2007, H.P. 1233. Printed on recycled paper 1Y/~/h.7TI~
Maine Legislature, Session 123, LD 1925
Amends: 36 MRSA §5126, 36 MRSA §5160, 36 MRSA §5192, 36 MRSA §5200, 36 MRSA §5200-A, 36 MRSA §5203-B, 36 MRSA §5203-C, 36 MRSA §5216-C, 36 MRSA §5217-A, 36 MRSA §5218-B, 36 MRSA §5219-H, 36 MRSA §5219-N, 36 MRSA §5224-A, 36 MRSA §52, 36 MRSA §5250, 36 MRSA §5275, 36 MRSA §5403, 36 MRSA §683, 36 MRSA §6201, 36 MRSA §6201-A, 36 MRSA §6207, 36 MRSA §6210, 36 MRSA §6218, 36 MRSA §6219, 36 MRSA §6220, 36 MRSA §62, 36 MRSA §6253, 36 MRSA §6254, 36 MRSA §6255, 5 MRSA §13090-K, 10 MRSA §130, 30-A MRSA §5681, 36 MRSA §1752, 36 MRSA §1758, 36 MRSA §1760, 36 MRSA §1760-C, 36 MRSA §1811, 36 MRSA §1812, 36 MRSA §1861, 36 MRSA §1862, 36 MRSA §2018, 36 MRSA §2551, 36 MRSA §2552, 36 MRSA §2557, 36 MRSA §2559, 36 MRSA §4641, 36 MRSA §4641-A, 36 MRSA §4641-B, 28-A MRSA §1652, 5 MRSA §1518-A, 30-A MRSA §5686, 36 MRSA §684, 36 MRSA §949

Legislative Document 
No. 1925 
H.P.1362 
House of Representatives, June 12, 2007 
An Act To Cut Taxes on Maine Residents by over $140,000,000 
Reported by the Majority from the Joint Standing Committee on Taxation pursuant to Joint 
Order 2007, H.P. 1233. 
Printed on recycled paper 
1Y/~/h.7TI~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 36 MRSA §S111, as amended by PL 1999, c. 731, Pt. T, §§1 to 7, is 
repealed and the following enacted in its place: 
§5111. Imposition and rate of tax 
.. 
A tax is imposed for each taxable year beginning on or after January 1. 2008, on the 
Maine taxable income of every resident individual of this State at the rate of 6%. 
Sec. A-2. 36 MRSA §Sl11-A, as repealed and replaced by PL 1987, c. 819, §3, is 
repealed. 
Sec. A-3. 36 MRSA §Sl12, as enacted by P&SL 1969, c. 154, Pt. F, §1, is 
repealed. 
Sec. A-4. 36 MRSA §S113, as repealed and replaced by PL 1983, c. 571, §19, is 
repealed. 
Sec. A-S. 36 MRSA §S121, as amended by PL 2003, c. 390, §26, is further 
amended to read: 
§5121. Maine taxable income 
The Maine taxable income of a resident individual is equal to the individual's federal 
adjusted gross income as defined by the Code with the modifications and less the 
seffi:tstiofts ailEi fJ6fsoftal exemfJtiofts provided in this chapter. 
Sec. A-6. 36 MRSA §S122, sub-§l, ~, as amended by PL 2007, c. 240, Pt. 
CCC, §2 and affected by §4, is further amended to read: 
N. With respect to property placed in service during the taxable year, an amount 
equal to the net increase in depreciation or expensing attributable to: 
(1) For taxable years beginning on or after January 1,2002 but prior to January 1, 
2006, a 30% bonus depreciation deduction claimed by the taxpayer pursuant to 
Section 101 of the federal Job Creation and Worker Assistance Act of 2002, 
Public Law 107-147 with respect to property placed in service during the taxable 
year; 
(2) For taxable years beginning on or after January 1, 2002 but prior to January 1, 
2006, a 50% bonus depreciation deduction claimed by the taxpayer pursuant to 
Section 201 of the federal Jobs and Growth Tax Relief Reconciliation Act of 
2003, Public Law 108-27 with respect to property placed in service during the 
taxable year; and 
(3) For taxable years beginning on or after January 1, 2003 but prior to January 1, 
2008, the increase in aggregate cost under Section 179 of the Code arisiBg from 
am6Bdm6ffis to the Case afJfJlieable to tax years beginniftg Oft or after Jam:lary 1, 
;ww. pursuant to Section 202 of the federal Jobs and Growth Tax Relief 
Reconciliation Act of 2003, Public Law 108-27 or pursuant to Section 201 of the 
federal American Jobs Creation Act of 2004, Public Law 108-357; 
Sec. A-7. 36 MRSA §S122, sub-§2, ~, as amended by PL 2003, c. 705, §11 
and affected by § 14, is further amended to read: 
L. For income tax years beginning on or after January 1, 2000 and before January 1, 
2004, an amount equal to the total premiums spent for qualified long-term care 
insurance contracts as defined in the Code, Section 7702B(b), as long as the amoupt 
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 and before January 1, 2008, an amount equal to the total premiums 
spent for qualified long-term care insurance contracts as defined in the Code, Section 
7702B(b), 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. For income tax years beginning on or after January 1, 
2008, an amount equal to the total premiums spent for qualified long-term care 
insurance contracts as defined in the Code, Section 7702B(b)' 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); 
Sec. A-8. 36 MRS A §S122, sub-§2, VI, as amended by PL 2005, c. 519, Pt. 
LLL, § 1 and c. 622, §26, 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 507S-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 but before January 1, 
2008, 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. For income 
tax years beginning on or after January 1, 2008, 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); 
Sec. A-9. 36 MRSA §S124-A, as amended by PL 2005, c. 12, Pt. P, §5, is 
repealed. 
Sec. A-10. 36 MRSA §S12S, as amended by PL 2005, c. 12, Pt. P, §6 and affected 
by § 10, is repealed. 
Sec. A-H. 36 MRSA §5126, as amended by PL 2001, c. 583, §16, is repealed. 
Sec. A-12. 36 MRSA §5160, as amended by PL 2003, c. 390, §35, is further 
amended to read: 
§5160. Imposition oftax 
The tax is imposed, at the Fates rate provided by section 5111 for siagle iadividuaIs, 
upon the Maine taxable income of estates and trusts. The tax must be paid by the 
fiduciary. 
Sec. A-13. 36 MRSA §5192, sub-§2, as amended by PL 1985, c. 783, §32, is 
repealed. 
Sec. A-14. 36 MRSA §5200, sub-§l, as amended by PL 2005, c. 618, §6 and 
affected by §22, is repealed and the following enacted in its place: 
1. Imposition and rate of tax. A tax is imposed for each taxable year at the rate of 
8.93% on the income of each taxable corporation and on each group of corporations that 
deri ves income from a unitary business carried on by 2 or more members of an affiliated 
WYQ.,. 
Sec. A-I5. 36 MRSA §5200-A, sub-§l,~, as amended by PL 2007, c. 240, Pt. 
CCC, §3 and affected by §4, is further amended to read: 
N. With respect to property placed in service during the taxable year, an amount 
equal to the net increase in depreciation or expensing attributable to: 
(1) For taxable years beginning on or after January 1,2002 but prior to January I, 
2006, a 30% bonus depreciation deduction claimed by the taxpayer pursuant to 
Section 101 of the federal Job Creation and Worker Assistance Act of 2002, 
Public Law 107-147 with respect to property placed in service during the taxable 
year; 
(2) For taxable years beginning on or after January 1,2002 but prior to January I, 
2006, a 50% bonus depreciation deduction claimed by the taxpayer pursuant to 
Section 201 of the federal Jobs and Growth Tax Relief Reconciliation Act of 
2003, Public Law 108-27 with respect to property placed in service during the 
taxable year; and 
(3) For taxable years beginning on or after January I, 2003 but prior to January 1, 
2008, the increase in aggregate cost under Section 179 of the Code arisiag from 
ameadmeats to the Code applicable to taJ( years beginniag oa or after January 1, 
2QW. pursuant to Section 202 of the federal Jobs and Growth Tax Relief 
Reconciliation Act of 2003, Public Law 108-27 or pursuant to Section 201 of the 
federal American Jobs Creation Act of 2004, Public Law 108-357; 
Sec. A-16. 36 MRSA §5203-B, as amended by PL 2003, c. 673, Pt. JJ, §2 and 
affected by §6, is repealed. 
Sec. A-17. 36 MRSA §5203-C, as amended by PL 2005, c. 618, §§7 and 8 and 
affected by §22, is further amended to read: 
§5203-C. State minimum tax 
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following tenus have the following meanings. 
A. "Adjusted alternative minimum tax," for iadividuals, estates aad tmsts, meaas the 
exoess, if aay, of the alternative miaimum tax over the amount that would have beea 
the altemati'.'e miaiml:lm tax had only the adjustmems and items of preferenoe 
speoified ia the Code, Seotioa 53(d)(1)(B)(ii) beea takea iato aooouat in determ.ining 
alternative miaimum tax. For eorporatioas subjeot to the tax imposed by this seetioa, 
"adjusted alternative minimum tax" means alternative minimum tax. 
B. "Alternative minimum tax" means any excess of tentative minimum tax over the 
regular income tax. 
C. 
"Alternative minimum taxable iaoome" meaas temative alternative miaimum 
taxable iaeome less the applioable exemptioa amoum, exoept that: 
(1) For taxable eorporations with inoome from busiaess activity that is taxable 
both withia ead without this State, "alteraative mimml:lffi taJtable iaeorne" means 
teatative alternati'.'e miaimum taxable inoorne less the applioable eJtemption 
amoum, the result of vrhioh is multiplied by the fraotioa desoribed in seotion 
5211, subsection 8; or 
(2) For aomesideat estates aad trusts with iaoorne derived from Maine sources, 
"alteraative miaiml:lrn taxable iaoome" meaas teatative alternati';e miaiml:lm 
taJfable iaoome less the applioable exernptioa amouat, the result of ,."ihioh is 
ml:lltiplied by a fraotion, the aumerator of whioh is the taxpayer's tentative 
alteraative minimum taxable iaoome from Maiae sources aad the deaomiaator of 
'Nhioh is the taxpayer's total temative alternative miaimurn taxable iaoome from 
all soW'oes. 
Col. "Alternative minimum taxable income" for taxable corporations with income 
from business activity that is taxable both within and without this State means 
tentative alternative minimum taxable income less the applicable exemption amount, 
the result of which is multiplied by the fraction described in section 5211, subsection 
~ 
D. "Exemption amount" means the applicable exemption as provided by the Code, 
Section 55(d) as of December 31,2002, except that tentative alternative minimum 
taxable income as determined under paragraph G must be substituted in the 
computation of the phase-out under the Code, Section 55(d)(3). 
E. 
"Federal alternative minimum taxable income" means alternative minimum 
taxable income determined in accordance with the Code, Seotioas Section 55(b)(2) 
aad 59(0). 
F. 
"Regular inoome tax" means: 
(1) 
For resident individuals, estates and trests, tae amount derived by 
multiplying the applieable taJf rate or rates by taxable meome ffi'lder seetion 5121 
or 5163; 
(2) 
For aomesident iadividua1s, estates and trusts, the amount derived by 
multiplyiag tae applieable tax rate or rates by taxable iaeome under section 5121 
or 5175, the result of which is adjusted for aoaresident individuals in aceordance 
wita sectioa 5111, subsection 4; or 
(3) For taxable corporatioas, tae amm:lllt derived by multiplying tae applicable 
tax rate or rates against Mame Bet income \ii'lder seetioa 5102, sabseotioa 8. 
F-l. "Regular income tax" means the amount derived by multiplying the applicable 
tax rate or rates against Maine net income under section 5102, subsection 8. 
G. 
"Tentative alternative minimum taxable income" means federal alternative 
minimum taxable income: 
( 1 ) 
Reduced by income that states are prohibited under federal law from 
subjecting to income tax to the extent included in federal alternative minimum 
taxable income; 
(2) Reduced by income, loss or deductions by which the State decreases feEleral 
adjusted gross iacome ia tae case of individuals or federal taxable income ffi...the 
ease of eorporations, estates aaa trusts under section 5122, seotion 5125, 
subseetion 3 or seetion 5164,5176 or 5200-A or as otherwise indicated by law to 
the extent included in federal alternative minimum taxable income; and 
(3) Increased by income, loss or deductions by which the State increases federal 
adjusted gross income in the ease of individuals or federal taxable income ffi...the 
ease of eorporations, estates and tI1:lsts under section 5122, seetion 5125, 
subseetion 3 or section 5164, 5176 or 5200-A or as otherwise indicated by law to 
the extent not included in federal alternative minimum taxable income. 
H. "TentatiYe minimum tax" means: 
(1) ~feept as provided in subparagraph (2), in the ease ofa taxpayer other thaa 
a taxable eorporation, the sum of: 
(a) ,t\B ameunt equal to 7% of so mueh of the alternative minimum taJtable 
ineome as does not exeeed $175,000; plus 
(b) AIl amount equal to 7.6% percent of so much of the alternative minimum 
taxable ineome as eJfceeds $175,000.For a nonresident individual, the 
tentative minimum tax must be aEljusted in aceordance wita seetion 5111, 
subsection 4. 
(2) In: the case of a married indi:vidual filing a separate return, the sum of: 
(a) All amOffi'lt equal to 7% of so mueh of the alternati',re minimum taxable 
income as does not exceed $87,500; plus 
(b) .An amount equal to 7.6% percent of so mueh ofthe alternative minimum 
taxable income as exeeeds $87,500.For a nomesideat individual, the tentative 
minifffilm tax mtlst be adjusted in aeeordanee vlith seetion 5111, subseotion 
4: 
(3) In the oase of a taxable oorporatioa, the teatative minifffilm tax for the 
taxable year is 5.4% of the alternative minimum taxable ineome. 
H-l. 
"Tentative minimum tax" for the taxable year is 5.4% of the alternative 
minimum taxable income. 
1. Tax imposed. ill additioa to all other taxes oontaifl:ed in this Part, a tax in an 
amount equal to the alternative minimum tax is imposed for eaoh taxable year on the 
following ta]Epayers: 
A. Resident individuals, tmsts and estates; 
B. Nonresident individuals, trusts and estates with Maine souree inoome; and 
C. TalEable eorporations req1iired to file aB iHoome tax return under this Part, 
exoluding finaaoial iflStitutions subjeot to the tax imposed by ohapter 819 and persons 
not subjeet to the federal alternative miBimum tax l:lilder the Code, Seetioa55(e). 
2-A. Tax imposed. In addition to all other taxes contained in this Part, a tax in an 
amount equal to the alternative minimum tax is imposed for each taxable year on taxable 
corporations required to file an income tax return under this Part, excluding financial 
institutions subject to the tax imposed by chapter 819 and persons not subject to the 
federal alternative minimum tax under the Code, Section 55(e). 
3. CFedit WF tax paid to otlleF taxiag juFisdietioa. A resident individual, estate or 
trust is allowed a oredit against the ta]E otherwise due under this seetion for the amount of 
alternative minimum tax imposed on that individual, estate or trust for the taxable year by 
another state of the Uflited States, a politioal subdivision of aay suoh state, the Distriet of 
Columbia or aay politioal subdi'lisiofl: of a foreign oountry that is aaalogous to a state of 
the United States 'Nith respect to inoome deri'l:ed from sourses in that taxing jurisdietion 
also subject to tax under this section. 
The oredit for any of the specified taxing 
jurisdiotioBS may Bot exceed tRe proportion of the tax otherwise due under tRis seotion 
that tRe amount of the taxpayer's tentative alternative minimum taxable income derived 
from sources in that talLing jurisdiotion bears to the taJEpayer's entire tentative aiternati'/e 
miRimum taxable inoome. When a oredit is olaiHl@d for alternative minimum taxes paid to 
1 
both a state and a politioal subdivision of that state, the total oredit allov.table for those 
taxes in the aggregate may not exceed the proportion of the taJ( otRerwise due under this 
seotion that the amount of tRe taxpayer's tentative alternative minimum taxable inoome 
derived from sourses in the otRer state bears to the taxpayer's entire tentative alternative 
minifffilm taxable inoome. 
4. Minimum tax credit. A minimum tax credit is allowed as follows. 
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 5219-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. 
B. The credit allowable for a taxable year under this subsection is limited to the 
amount, if any, by which the regular income tax after application of all other credits 
arising under this Part exceeds the tentative minimum tax. 
Sec. A-IS. 36 MRS A §5204, as amended by PL 1987, c. 772, §38, is repealed. 
Sec. A-19. 36 MRS A §5204-A, as amended by PL 1993, c. 395, §20, is repealed. 
Sec. A-20. 36 MRSA §5216-C, sub-§I, as enacted by PL 1999, c. 475, §6 and 
affected by § 7, is amended to read: 
1. Credit allowed. A taxpayer who contributes to a family development account 
reserve fund as defined in Title 10, section 1075 is allowed a credit against the tax 
imposed by this Part equal to the lower of: 
A. Twenty-five thousand dollars; ef and 
B. Fifty percent of the amount contributed by the taxpayer. 
Only one credit may be claimed on each annual income tax return regardless of filing 
status. The credit allowed under this section may not reduce the tax to less than 0 and 
must be applied after allowance for all other eligible credits. A taxpayer whe slaims a 
sfedit l:mder this section may not claim aH itemized sharitable deduetioH under seetioH 
5125 for the amount of the sontribution that qualified for the eredit. 
Sec. A-21. 36 MRSA §5217-A, as amended by PL 2003, c. 673, Pt. JJ, §4 and 
affected by §6, is further amended to read: 
§5217-A. Income tax paid to other taxing jurisdiction 
A resident individual is allowed a credit against the tax otherwise due under this Part, 
6*sluding the taK ilHflosed by seetioH 5203 C, for the amount of income tax imposed on 
that individual for the taxable year by another state of the United States, a political 
subdivision of any such state, the District of Columbia or any political subdivision of a 
foreign country that is analogous to a state of the United States with respect to income 
subject to tax under this Part that is derived from sources in that taxing jurisdiction. In 
determining whether income is derived from sources in another jurisdiction, the assessor 
may not employ the law of the other jurisdiction but shall instead assume that a statute 
equivalent to section 5142 applies in that jurisdiction. The credit, for any of the specified 
taxing jurisdictions, may not exceed the proportion of the tax otherwise due under this 
Part, exeffiding the taK imposed by seetioH 5203 C, that the amount of the taxpayer's 
Maine adjusted gross income derived from sources in that taxing jurisdiction bears to the 
taxpayer's entire Maine adjusted gross income; except that, when a credit is claimed for 
taxes paid to both a state and a political subdivision of a state, the total credit allowable 
for those taxes does not exceed the proportion of the tax otherwise due under this Part, 
exeluding the ta" imposed by seetioH 5203 G, that the amount of the taxpayer's Maine 
adjusted gross income derived from sources in the other state bears to the taxpayer's 
entire Maine adjusted gross income. 
Sec. A-22. 36 MRS A §5218-A is enacted to read: 
§5218-A. Household credit 
1. Credit allowed. A resident individual is allowed a credit, referred to in this 
section as "the household credit," against the tax imposed by this Part. 
Unless the 
taxpayer elects to calculate the household credit under section 5218-B, the household 
credit is equal to the amount calculated in this section. An individual filing a return under 
section 5224-A is not eligible for a credit under this section. 
2. Amount of base credit. The base credit is: 
A. For single individuals and married persons filing separate returns, $750; 
B. For unmarried individuals or legally separated individuals who qualify as heads of 
households, $1,100; and 
C. For individuals filing married joint returns or surviving spouses permitted to file a 
joint return, $1,450. 
3. Additional credit. The base household credit is increased by $125 for each 
person for whom the individual is entitled to claim an exemption as a dependent under 
the Code. 
4. Phaseout of credit. The household credit calculated under subsections 2 and 3 is 
reduced by $2 for every $100 that the individual's taxable income exceeds: 
A. For single individuals and married persons filing separate returns, $30,000; 
B. For unmarried individuals or legally separated individuals who qualify as heads of 
households, $45,000; and 
C. For individuals filing married joint returns or surviving spouses permitted to file a 
joint return, $67,500. 
5. Credit refundable. The household credit allowed under this section is refundable 
up to $140 for each return filed by an individual who is not claimed as a dependent by 
another individual on a return under the Code. 
6. Adjustment for inflation. The household credit amounts under subsections 2 and 
and the credit phaseout thresholds under subsection 4 must be adjusted annually for 
inflation as provided in chapter 841. 
7. Purpose. The household credit is intended to provide relief to low-income and 
middle-income persons from the burden attributable to the impact of local property taxes 
on primary residences and state sales and use tax resulting from the costs of maintaining a 
household in this State. 
Sec. A-23. 36 MRSA §5218-B is enacted to read: 
§5218-B. Alternate calculation of household credit 
1. General. A resident individual who has claimed itemized deductions from federal 
adjusted gross income in determining the individual's federal taxable income for the 
taxable year may elect to calculate the household credit as provided in this section instead 
of under section 5218-A. An individual filing a return under section 5224-A is not 
eligible for a credit under this section. The credit calculated under this section is referred 
to in this section as "the alternate household credit. " 
2. Base. The alternate household credit is calculated by modifying the individual's 
total federal itemized deductions by: 
A. Reducing the total by any amount attributable to income taxes or sales and use 
II 
taxes imposed by this State or any other taxing jurisdiction; 
B. 
Increasing the total by any amount of interest or expense incurred in the 
production of income taxable under this Part but exempt from federal income tax that 
was not deducted in determining the individual's federal taxable income; 
C. Reducing the total by any amount of deduction attributable to income taxable to 
financial institutions under chapter 819; 
D. Reducing the total by any amount attributable to interest or expenses incurred in 
the production of income exempt from tax under this Part; and 
E. Reducing the total by any amount attributable to a contribution that qualified for 
and was actually used as a credit under section 5216-C. 
3. Maximum alternate credit. An individual's alternate household credit may not 
exceed the lower of: 
A. 
Ten percent of the individual's federal itemized deductions modified under 
subsection 2; and 
B. The following applicable amount: 
(1) For individuals filing as single or for married individuals filing separately, 
$1,300; 
(2) For individuals filing as heads of households, $2,000; or 
(3) For married individuals filing jointly, $3,000. 
4. Phaseout; refund ability. An alternate household credit calculated under this 
section is subject to the phaseout and refundability provisions of section 5218-A, 
subsections 4 to 6. The maximum alternate credit amounts under subsection 3, paragraph 
B must be adjusted annually for inflation as provided in chapter 841. 
Sec. A-24. 36 MRSA §5219-H, sub-§2, as repealed and replaced by PL 2003, c. 
673, Pt. F, § 1 and affected by §2, is amended to read: 
2. Meaning of tax liability. Whenever a credit provided for in chapter 822 is 
limited by reference to tax liability, "tax liability" means the tax liability for all taxes 
under this Part, except the HHnimlHR tax imposed by section 5203 C and the taxes 
imposed by chapter 827. 
Sec. A-25. 36 MRSA §5219-N, as amended by PL 2003, c. 673, Pt. JJ, §5 and 
affected by §6, is repealed. 
Sec. A-26. 36 MRSA §5224-A, as amended by PL 1989, c. 596, Pt. J, §5, is 
further amended to read: 
§5224-A. Tax return of part-year resident 
If an individual changes that individual's status as a resident individual or nonresident 
individual during the taxable year, the individual shall file a nonresident return pursuant 
to section 5220, subsection 2. That individual's tax shall must be computed, pursuant to 
section 5111, subsection 4, as if that individual were a nonresident individual, except that 
the numerator of the apportionment ratio shall be i§ comprised of the individual's Maine 
adjusted gross income, as defined in section 5102, subsection I-C, paragraph A, for the 
portion of the taxable year during which that individual was a resident, plus that 
individual's Maine adjusted gross income as defined in section 5102, subsection I-C, 
paragraph B, for the portion of the taxable year during which that individual was a 
nonresident. The part-year resident shall ~ also ae entitled to the credit provided by 
section 5217 -A, computed as if the individual's Maine adjusted gross income for the 
entire year were comprised only of that portion which is attributed to the portion of the 
year during which that individual was a resident. 
Sec. A-27. 36 MRSA §52S0, sub-§2, as amended by PL 1997, c. 668, §§36 and 
37, is repealed. 
Sec. A-28. 36 MRSA §5250, sub-§5 is enacted to read: 
5. Adjustment for household credit. The withholding amounts determined by the 
assessor under subsection 1 must take into account the effect of the household credit 
under section 5218-A. 
Sec. A-29. 36 MRSA §5275, sub-§l, as enacted by P&SL 1969, c. 154, §F, is 
amended to read: 
1. An amount less than wages. As the amount of the wages shown on l:Hs the 
individual's return for any taxable year an amount less than such wages actually shown, 
eF~ 
Sec. A-30. 36 MRSA §5275, sub-§2, as amended by PL 1979, c. 378, §44, is 
repealed. 
Sec. A-31. 36 MRS A §5401, as enacted by IB 1983, c. 2, §4, is amended to read: 
§5401. Findings and purpose 
Inflation erodes the value of personal exemptions and deooctions provisions in the 
Maine individual income tax structure intended to moderate the impact of state and local 
taxes and distorts fiscal equity among taxpayers. Inflation-induced increases in individual 
income tax revenues result in annual collections that exceed the amounts anticipated by 
legislative actions establishing rates, exemptions, deductions and other features of the 
Maine individual income tax. 
Furthermore, the income tax laws of this State, in 
combination with economic inflation, have caused inequitable treatment of the taxpayers 
because the application of inflexible, statutorily prescribed rates of tax, standard 
deduction and personal exemption to increasing personal incomes has resulted in 
increasing the taxpayer's tax liability while the taxpayers taxpayer's purchasing power has 
remained the same or, in some instances .. has decreased. It is the purpose of this Act to 
correct this situation by requiring that certain components of the individual income tax 
structure be adjusted in order to compensate for the impact of inflation. 
Sec. A-32. 36 MRSA §5403, as repealed and replaced by PL 1999, c. 731, Pt. T, 
§ 1 0 and affected by § 11, is amended to read: 
§5403. Annual adjustments for inflation 
Beginning in ~ 
2009, and each subsequent calendar year thereafter, on or about 
September 15th, the State Tax Assessor shall multiply the cost-of-living adjustment for 
taxable years beginning in the succeeding calendar year by the dollar amounts of the-tax 
rate tables specifi@s is section 5111, trubseetioas 1 S, 2 S aRS 3 S household credit 
amounts under section 5218-A, subsections 2 and 3, the credit phaseout thresholds under 
section 5218-A, subsection 4 and the maximum alternate household credit amounts under 
section 5218-B, subsection 3, paragraph B. If the dollar amounts of@aoh Fat@ bracket for 
each household credit amount under section 5218-A, subsections 2 and 3, credit threshold 
amount under 5218-A, subsection 4 or maximum alternate household credit amount under 
section 5218-B, subsection 3, paragraph B, adjusted by application of the cost-of-living 
adjustment, are not mUltiples of $50, any increase must be rounded to the next lowest 
multiple of $50. If the cost-of-living adjustment for any taxable year is 1.000 or less, no 
adjustment may be made for that taxable year in the sollar bracket amounts oftae tax Fate 
tahles. 
The assessor shall incorporate such changes into the income tax forms, 
instructions and withholding tables for the taxable year. 
Sec. A-33. Reserve for conformity. At the end of fiscal year 2007-08, the State 
Controller shall reserve in a separate account the amount of $6,400,000 from the 
unappropriated surplus of the General Fund to fund conformity with the United States 
Internal Revenue Code with regard to Section 179 business expensing. 
The State 
Controller shall transfer from the reserve for conformity to the General Fund 
unappropriated surplus in fiscal years 2008-09 and 2009-10 amounts certified by the State 
Tax Assessor as the net reduction of General Fund revenue from income tax conformity 
identified in this section. 
Sec. A-34. Effective date; application. This Part takes effect January 1, 2008 
and applies to income tax years beginning on or after January 1,2008. 
PARTB 
Sec. B-1. 36 MRSA §683, sub-§l, as repealed and replaced by PL 2005, c. 2, Pt. 
F, § 1 and affected by § 5, is amended to read: 
1. Exemption amount. Except for assessments for special benefits, the just value of 
$13,000 $26,000 of the homestead of a pennanent resident of this State who has owned a 
homestead in this State for the preceding 12 months is exempt from taxation. 
In 
detennining the local assessed value of the exemption, the assessor shall multiply the 
amount of the exemption by the ratio of current just value upon which the assessment is 
based as furnished in the assessor's annual return pursuant to section 383. lfthe title to 
the homestead is held by the applicant jointly or in common with others, the exemption 
may not exceed $13,000 $26,000 of the just value of the homestead, but may be 
apportioned among the owners who reside on the property to the extent of their respective 
interests. A municipality responsible for administering the homestead exemption has no 
obligation to create separate accounts for each partial interest in a homestead owned 
jointly or in common. 
Sec. B-2. Application. This Part applies to taxes based on the status of property 
on or after April!, 2008. 
Sec. B-3. Appropriations and allocations. The following appropriations and 
allocations are made. 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Homestead Property Tax Exemption Reimbursement 0886 
Initiative: Provides funds to reimburse municipalities for 50% of the estimated property 
tax revenue loss that results from the increase in the homestead exemption. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
PARTC 
2007-08 
$0 
$0 
2008-09 
$31,641,000 
$31,641,000 
Sec. C-l. 36 MRSA §6201, sub-§l, as amended by PL 2005, c. 2, Pt. E, §1 and 
affected §§7 and 8, is further amended to read: 
1. Benefit base. "Benefit base" means property taxes accrued or rent constituting 
property taxes accrued. In the case of a claimant paying both rent and property taxes for 
a homestead, benefit base means both property taxes accrued and rent constituting 
property taxes accrued. The benefit base may not exceed $3,000 for single-member 
households and $4,000 for households with 2 or more members for application periods 
beginning before August 1, 2009 and $4,000 for single-member households and $5,000 
for households with 2 or more members for application periods beginning on or after 
August 1,2009. 
Sec. C-2. 36 MRS A §6201, sub-§2, as amended by PL 2001, c. 396, §40, is 
repealed and the following enacted in its place: 
2. Claimant. "Claimant" means an individual who: 
A. Has filed a claim under this chapter; 
B. Was domiciled in this State during the entire year for which relief is requested; 
and 
C. Owned or otherwise maintained a homestead in this State during the entire year 
for which relief is requested and occupied that homestead for at least 6 months during 
that year. For the purpose of this subsection, a homestead may include a claimant's 
home that is rented out for no more than 31 days in the aggregate during the year for 
which relief is requested. 
Regardless of how many names of individuals appear on the property deed, the person 
who meets the qualifications described in this subsection and proves sole responsibility 
for the payment of the property taxes on the subject property is the claimant with respect 
to that property. If 2 or more individuals meet the qualifications in this subsection and 
share the payment of rent or responsibility for the payment of property taxes, each 
individual may apply on the basis of rent paid or the property taxes levied on the 
homestead that reflect the ownership percentage of the claimant and the claimant's 
household. If 2 or more individuals claim the same property, the matter must be referred 
to the assessor, whose decision is final. 
Ownership of a homestead under this chapter may be by fee, by life tenancy, by bond for 
deed, as mortgagee or by any other possessory interest in which the owner is personally 
responsible for the tax for which a refund is claimed. 
Sec. C-3. 36 MRSA §6201, sub-§S, as amended by PL 1995, c. 368, Pt. CCC, §7 
and affected by § 11, is further amended to read: 
5. Homestead. "Homestead" means the dwelling owned or rented by the claimant or 
held in a revocable living trust for the benefit of the claimant and occupied by the 
claimant and the claimant's dependents as a home, and may consist of a part of a 
multidwelling or multipurpose building and a part of the land, up to 10 asres, upon which 
it is built. "Owned" includes a vendee in possession under a land contract and of one or 
more j oint tenants or tenants in common. 
Sec. C-4. 36 MRSA §6201, sub-§7, as enacted by PL 1987, c. 516, §§3, 6, is 
amended to read: 
7. 
Household income. "Household income" means all income received by all 
persons of a household in a calendar year while members of the household but does not 
include the income of a dependent of the claimant who is a minor child or a full-time 
student. 
Sec. C-S. 36 MRSA §6201, sub-§lO, as amended by PL 1997, c. 504, §20, is 
further amended to read: 
10. 
Property taxes accrued. "Property taxes accrued" means property taxes 
exclusive of special assessment, delinquent interest and charges for service levied on a 
claimant's homestead in this State as of April 1, 1972, or any tax year thereafter. If a 
homestead is owned by 2 or more persons or entities as joint tenants or tenants in 
common, and one or more persons or entities are not members of the claimant's 
household, "property taxes accrued" is that part of property taxes levied on the homestead 
that reflects the ownership percentage of the claimant and the claimant's household. If a 
claimant and spouse own their homestead for part of the year for which relief is requested 
and rent it or a different homestead for part of the same tax year, "property taxes accrued" 
means taxes levied on the homestead on April 1st, multiplied by the percentage of 12 
months that the property was owned and occupied by the household as its homestead 
during the year for which relief is requested. When a household owns and occupies 2 or 
more different homesteads in this State in the same tli* calendar year, property taxes 
accrued relate only to the total of the property taxes owed for the time that each property 
was occupied by the household as a homestead on April 1st. To calculate the amount 
attributable to each property, the April 1 st assessment on each homestead is multiplied by 
the percentage of 12 months that each property was owned and occupied by the claimant 
as the claimant's homestead during the year for which relief is requested. If a homestead 
is an integral part of a larger unit such as a farm, or a multipurpose or multidwelling 
building, property taxes accrued are that percentage of the total property taxes accrued 
that the value of the homestead is of the total value, except that property taxes accrued do 
not include any portion of taxes claimed as a business expense for federal income tax 
purposes. For purposes of this chapter, "unit" refers to the parcel of property separately 
assessed of which the homestead is a part. 
Sec. C-6. 36 MRSA §6201-A, as amended by PL 2005, c. 618, §18, is further 
amended to read: 
§6201-A. Short title 
This chapter may be known and may be cited as the "Maine Resiaents Property Tax 
Program Property Tax and Rent Refund Program" and may be referred to as "the 
Circuitbreaker Program." 
Sec. C-7. 36 MRSA §6207, sub-§l, ~A-l, as amended by PL 2005, c. 2, Pt. E, 
§4 and affected by §§7 and 8, is further amended to read: 
A-I. Fifty pereent For the application period beginning August I, 2008, 50% of that 
portion of the benefit base that exceeds 4% but does not exceed &% 7% of income 
plus 100% of that portion of the benefit base that exceeds &% 7% of income to a 
maximum payment of $2,000. $2,500; and 
Sec. C-S. 36 MRSA §6207, sub-§l, ~A-2 is enacted to read: 
A-2. For application periods beginning on or after August 1. 2009, 50% of that 
portion of the benefit base that exceeds 3.5% but does not exceed 7% of income plus 
100% of that portion of the benefit base that exceeds 7% of income to a maximum 
payment of $2,500. 
Sec. C-9. 36 MRSA §6210, 2nd ~, as amended by PL 2005, c. 218, §59, is 
further amended to read: 
The assessor shall include a checkoff to request an application for the Maine 
Residents Pro~erty Tax Program Property Tax and Rent Refund Program on the 
individual income tax form. The assessor shall also provide a paperless option for filing 
an application for the Maine Residents Pro~erty Tax Program Property Tax and Rent 
Refund Program. 
Sec. C-IO. 36 MRSA §6218, as enacted by PL 1989, c. 534, Pt. A, §10, is 
amended to read: 
§6218. Readability; application; instructions 
The application form and instructions used by applicants for assistance under the 
Maine Residents Property Tax Progrrun Property Tax and Rent Refund Program and its 
successor, if any, shall have a readability score, as detennined by a recognized instrument 
for measuring adult literacy levels, equivalent to no higher than a 6th grade reading level. 
Sec. C-ll. 36 MRSA §6219, as amended by PL 1997, c. 526, §14, is further 
amended to read: 
§6219. Outreach plan required 
The Bureau of Revenue Services shall develop and implement a plan of outreach to 
ensure that all eligible households are made aware of assistance available under the 
Maine Residents Pro~erty Tax Program Property Tax and Rent Refund Program and its 
successor, if any. 
Sec. C-12. 36 MRSA §6220, as amended by PL 1997, c. 668, §40, is further 
amended to read: 
§6220. Coordination required 
The bureau shall seek the advice and cooperation of the Bureau of Elder and Adult 
Services; the Bureau of Family Independence; the Bureau of Child and Family Services; 
advocates for elderly and low-income individuals; and other interested agencies and 
organizations in developing the application form and instruction booklet for the Maffie 
Resideats Pr~erty Tax Progrrun Property Tax and Rent Refund Program and the 
outreach plan required by section 6219. 
Sec. C-13. Maine Revised Statutes headnote amended; revision clause. In 
the Maine Revised Statutes, Title 36, chapter 907, in the chapter headnote, the words 
"Maine residents property tax program" are amended to read "property tax and rent 
refund program" and the Revisor of Statutes shall implement this revision when updating, 
publishing or republishing the statutes. 
Sec. C-14. Information with refund payments. The State Tax Assessor shall 
prepare a plan to provide information about state tax relief efforts with refund payments 
under the Property Tax and Rent Refund Program beginning with the application period 
that begins August 1, 2008. The plan must identify options for providing information to 
refund recipients about the amount of property tax relief provided by the State under the 
program and other relief provided by the State, including the homestead exemption, state-
municipal revenue sharing and state funding for local education. Options may include 
providing information on payment check forms and separate inclusions with refund check 
mailings. All options must provide information in an easily understandable format and 
may include graphical representations as appropriate. 
The State Tax Assessor shall 
submit the plan to the Joint Standing Committee on Taxation by February 1, 2008. The 
committee may submit legislation necessary to implement a plan. 
Sec. C-lS. Appropriations and allocations. The following appropriations and 
allocations are made. 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Revenue Services - Bureau of 0002 
Initiative: Provides funds for marketing efforts to increase taxpayer awareness about tax 
relief programs. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
PARTD 
2007-08 
$300,000 
$300,000 
2008-09 
$200,000 
$200,000 
Sec. D-1. 36 MRSA §62S1, sub-§l, as repealed and replaced by PL 1993, c. 395, 
§ 31, is amended to read: 
1. Filing claim. Subject to section 6252, an individual or 2 or more individuals 
jointly may elect to defer the property taxes on their homestead by filing a claim for 
deferral with the municipal assessor after January 1st but no later than April 1st of the 
first year in which deferral is claimed if: 
A. The individual or each individual, in the case of 2 or more individuals filing a 
claim jointly, is 65 years of age or older on April 1 st of the year in which the claim is 
filedt-aHd.c 
B. The iR<livid\:la1 or, in the case of 2 or more indiviffilals filing a claim jointly, aU the 
individuals together have household income, as defined in section 6201, subseotion 7, 
of less than $32,000 for the oalendar year itnmediately preoeding the calendar year in 
which the claim is filed. 
The municipal assessor shall forward each claim filed under this subsection to the bureau 
within 30 days of receipt and the bureau shall determine if the property is eligible for 
deferral. 
Claims from Bew applieants ffiay Bot be filed pursuaat to this shepter prior to JaaMary I, 
1994. For J>UfPoses of this seetioa, "new applicaals" ffieaBS aBj' persoa or parsoas that 
have aot filed elaiffis prior to April 1, 1991. 
Sec. D-2. 36 MRS A §6251, sub-§2, as enacted by PL 1989, c. 534, Pt. C, §1, is 
amended to read: 
2. Property tax deferral. \Vhea the taxpayer sleets If the taxpayer is determined to 
be eligible to defer property taxes for any year by filing a claim for deferral under 
subsection 1, it shall ha'r'e has the effect of: 
A. Deferring the payment of the property taxes levied on the homestead for the 
municipal fiscal year beginning on or after April 1 st of that year; 
B. Continuing deferral of the payment by the taxpayer of any property taxes deferred 
under this chapter for previous years that have not become delinquent under section 
6260; and 
C. Continuing the deferral of the payment by the taxpayer of any future property 
taxes for as long as the provisions of section 6252 are met. 
Sec. D-3. 36 MRSA §6253, as enacted by PL 1989, c. 534, Pt. C, §1, is amended 
to read: 
§6253. Claim forms; contents 
1. Administration. A taJ(payer's taxpayer may file a claim for deferral under this 
chapter shall be in writing on a form supplied by the bureau and sflal.l. must: 
A. Describe Identify the homestead; 
B. 
Recite facts establishing the Establish eligibility for the deferral under the 
provisions of this chapter, iaclMdiag faets that establish that the hOMsekold iBSOffie as 
demed in section 6201, Stlbseetion 7, of the iM1Viffiia.l, or, iR the ease of 2. or more 
iadiviooals claimiag the deferral joiBtly, was less thaa $32,000 for the saleadar year 
immediately preeediag the ealeaelar year ill whieh the elaiffi is filed; and 
C. Have attaeked Attach any doeMmeBtary proof information required by the bureau 
to show that the requirements of section 6252 have been met. 
2. Statement verification. There shall be anBeJ(ed to tke The claim must contain a 
statement verified by a written declaration of the applicant rnakiBg the Olaiffi to the effect 
that the statements contained in the claim are true. 
Sec. D-4. 36 MRSA §6254, sub-§l, as repealed and replaced by PL 1989, c. 713, 
§4, is amended to read: 
1. Lien. The lien provided in section 552 must coBtiaue continues for purposes of 
protecting the State's deferred tax interest in tax deferred property. When it is determined 
that one of the events set out in section 6259 has occurred and that a property is no longer 
eligible for property tax deferral under this chapter, the State Tax Assessor shall send 
notice by certified mail to the owner, or the owner's heirs or devisees, listing the total 
amount of deferred property taxes, including accrued interest and costs of all the years 
and demanding payment on or before April 30th of the year following the tax year in 
which the circumstances causing withdrawal from the provisions of this chapter occur. 
When the circumstances listed in section 6259, subsection 4 occur, the amount of 
deferred taxes is due and payable 5 days before the date of removal of the property from 
the State. 
If the deferred tax liability of a property has not been satisfied by the April 30th demand 
date, the State Tax Assessor shall, within 30 days, record in the registry of deeds in the 
county where the real estate is located a tax lien certificate signed by the State Tax 
Assessor or bearing the assessor's facsimile signature, setting forth the total amount of 
deferred tax liability, a description of the real estate on which the tax was deferred and an 
allegation that a tax lien is claimed on the real estate to secure payment of the tax, that a 
demand for payment of the tax has been made in accordance with this section and that the 
tax remains unpaid. 
At the time of the recording of the tax lien certificate in the registry of deeds, the State 
Tax Assessor shall send by certified mail, return receipt requested, to each record holder 
of a mortgage on the real estate, to the holder's last known address, a true copy of the tax 
lien certificate. The cost to be paid by the property owner, or the owner's heirs or 
devisees, is the sum of the fees for recording and discharging of the lien as established by 
Title 33, section 751, subsection 10, plus $13. Upon redemption, the State Tax Assessor 
shall prepare and record a discharge of the tax lien mortgage. The lien described in 
section 552 is the basis of this tax lien mortgage procedure. 
The filing of the tax lien certificate, provided for in this section, in the registry of deeds 
creates a mortgage on the real estate to the State and has priority over all other mortgages, 
liens, attachments and encumbrances of any nature and gives to the State all rights 
usually instant to a mortgage, except that the mortgagee does not have any right of 
possession of the real estate until the right of redemption expires. 
Payments accepted during the redemption period may not interrupt or extend the 
redemption period or in any way affect the foreclosure procedures. 
Sec. D-5. 36 MRSA §6255, sub-§3, as enacted by PL 1989, c. 534, Pt. C, §1, is 
amended to read: 
3. Interest. Interest shall aoorue accrues on the actual amount of taxes advanced to 
the municipality for the tax-deferred property at the rate of 6% per annum. If the State 
Tax Assessor determines that average residential mortgage rates in the State exceeded 6% 
for at least 12 consecutive months and that the interest rate differential creates an 
incentive for taxpayers to defer taxes primarily because of the lower interest rate provided 
by this chapter, the State Tax Assessor shall report this fact to the joint standing 
committee of the Legislature having jurisdiction over taxation matters, which may submit 
legislation to adjust the interest rate under this subsection. 
Sec. 0-6. 36 MRS A §6266, sub-§l, as enacted by PL 1989, c. 534, Pt. C, §1, is 
amended to read: 
1. Revolving account. This section establishes in the State Treasury the Senior 
Property Tax Deferral Revolving Account to be used by the bureau for the purpose of 
making the payments to municipal tax collectors of property taxes deferred for tax years 
beginning on or after .April 1, 1990, as FeEtUired by section 6257 under this chapter. 
Sec. D-7. 36 MRS A §6267, as enacted byPL 1993, c. 707, Pt. G, §1O, is repealed. 
Sec. D-8. Appropriations and allocations. The following appropriations and 
allocations are made. 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Elderly Tax Deferral Program 0650 
Initiative: Provides funds for the Elderly Tax Deferral program. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
PARTE 
2007-08 
$0 
$0 
2008-09 
$492,000 
$492,000 
Sec. E-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 1, 2003 and every July 1 st 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 
first 6 months of the prior fiscal year after the reduction for the transfer to the Local 
Government Fund as described by Title 30-A, section 5681, subsection 5. Beginning on 
October 1, 2003 and every October 1 st 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. E-2. 10 MRSA §130S, as amended by PL 1997, c. 668, §1, is further 
amended to read: 
§1305. 
Terminal rental adjustment clauses; vehicle leases that are not sales or 
security interests 
Notwithstanding any other provision of law, in the case of motor vehicles or trailers, 
a transaction does not create a sale or security interest merely because the agreement 
provides that the rental price is permitted or required to be adjusted upward or downward 
by reference to the amount realized upon sale or other disposition of the motor vehicle or 
trailer. A traflsactiofl may be eOflsidered a sale for p\H'floses of Title 36. 
Sec. E-3. 30-A MRSA §5681, sub-§5, as amended by PL 2007, c. 240, Pt. S, 
§ § 1 and 2, is further amended to read: 
5. Transfers to funds. On the last day of each month, the Treasurer of State shall 
transfer to the Local Government Fund a percentage, as provided in this subsection, of the 
receipts from the taxes imposed under Title 36, Parts 3 and 8, and Title 36, section 2552, 
subsection 1, paragraphs A to F and Land M, and credited to the General Fund without 
any reduction, except that the postage, state cost allocation program and programming 
costs of administering state-municipal revenue sharing may be paid by the Local 
Government Fund. Any amounts transferred to the Local Government Fund in excess of 
the annual growth ceiling must be transferred to the Disproportionate Tax Burden Fund. 
The percentage transferred to the Local Govenunent Fund on the last day of each month 
IS: 
A. For months beginning before July 1, 2009, 5.1 %; and 
B. For months beginning on or after July 1,2009,5.2%. 
Sec. E-4. 36 MRS A §1752, sub-§1-1 is enacted to read: 
1-1. 
Amusement, entertainment and recreation services. 
"Amusement, 
entertainment and recreation services" includes but is not limited to the following 
services, except those services provided by a governmental entity or an incomorated 
nonprofit organization: admission to entertainment venues and performances, including 
theaters, movies, lectures, concerts, amusement parks, water parks, fairgrounds, race 
tracks, carnivals, circuses, sports activities, stadiums, amphitheaters, museums, 
planetariums, animal parks, petting zoos, aquariums, historical sites, state parks and 
convention centers; fees charged for participation in or entry to golf courses, miniature 
golf courses, ski areas, bowling alleys, swimming pools, skating rinks, billiard parlors, 
gymnasiums, go-cart courses, tennis and racquetball courts and paintball; admission fees 
charged for exhibition shows such as auto, boat, camping, home, garden, animal and 
antique shows; scenic and sightseeing excursions including whitewater rafting, guided 
recreation, but excluding guided recreation services on federally navigable waters, and 
aircraft, helicopter, balloon, blimp, watercraft, railroad, bus, trolley and wagon rides; 
lessons and training in such areas as music, sports, dance, martial arts, gymnastics, 
physical fitness, art and crafts; entertainment services such as those provided by bands, 
orchestras, disc jockeys, comedians, clowns, jugglers, children's entertainers and 
ventriloquists; proceeds from arcade games; and fees paid to for-profit recreation and 
vacation camps for tuition and recreation services. 
Sec. E-5. 36 MRSA §1752, sub-§I-J is enacted to read: 
I-J. Candy. "Candy" means a preparation of sugar, honey or other natural or 
artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients or 
flavorings in the form of bars, drops or pieces. 
Sec. E-6. 36 MRSA §1752, sub-§2-D is enacted to read: 
2-D. Elective cosmetic medical procedure. "Elective cosmetic medical procedure" 
means any medical procedure on an individual that is directed at improving the 
individual's appearance and that does not meaningfully promote the proper function of the 
body or prevent or treat illness or disease. 
"Elective cosmetic medical procedure" 
includes but is not limited to cosmetic surgery, hair transplants, cosmetic injections, 
cosmetic soft tissue fillers, dermabrasion and chemical peel, laser hair removal, laser skin 
resurfacing, laser treatment of leg veins, sclerotherapy and cosmetic dentistry. "Elective 
cosmetic medical procedure" does not include reconstructive surgery or dentistry. As 
used in this subsection, "cosmetic surgery" means the surgical reshaping of normal 
structures of the body to improve the body image, self-esteem or appearance of an 
individual and "reconstructive surgery or dentistry" includes any surgery or dentistry 
performed on abnormal structures caused by or related to congenital defects, 
developmental abnormalities, trauma, infection, tumors or disease, including procedures 
to improve function or give a more normal appearance. 
Sec. E-7. 36 MRSA §1752, sub-§3-B, as amended by PL 1999, c. 698, §l and 
affected by §3, is further amended to read: 
3-8, Grocery staples. "Grocery staples" means food products ordinarily consumed 
for human nourishment and includes dairy and egg products, other than ice cream, ice 
milk and frozen yogurt; spices and herbs; baby foods; fats and oils; poultry products; 
soups, sauces and gravies: sausages and luncheon meats; breakfast cereals: fruits and fruit 
juices, other than soft drinks; pork products; vegetables and vegetable products, other 
than soft drinks; beef products; coffee and coffee substitutes; tea, other than liquid iced 
tea or powdered iced tea mix; cocoa and cocoa products, other than candy; finfish and 
shellfish products; legumes and legume products; lamb, veal and game products; bread, 
rolls and biscuits, including bagels and English muffins; sugar and sugar substitutes, other 
than candy; cereal grains and pasta, including unflavored matzo; leavening agents and 
other baking ingredients; gelatins and puddings, other than ready-to-eat; and meals, 
entrees and side dishes. 
"Grocery staples" does not include spirit\:lo\:ls, malt or ,<,iaous liqaors; soft dri.1:k:s, iced tea, 
sodas or ee>/erages sush as are ordiaarily dispeased at ears or soda fouataias or ia 
oonnestioa with ears or soda fouataias alcoholic beverages; 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; eaady 
aBd ooafestioas; and prepared food. 
Sec. E-S. 36 MRSA §1752, sub-§4-A is enacted to read: 
4-A. 
Installation, repair or maintenance services. 
"Installation, repair or 
maintenance services" includes all services involved in the installation, repair or 
maintenance of tangible personal property such as jewelry, cameras, guns, musical 
instruments, electronic and mechanical equipment, lawn and garden equipment, 
computers and office equipment, vehicles and appliances; service and maintenance 
contracts; tailoring, clothing and shoe repair; and furniture repair and restoration. 
"Installation, repair or maintenance services" does not include services performed on 
machinery and equipment used in production sold to a person engaged in production. 
Sec. E-9. 36 MRSA §1752, sub-§5-C is enacted to read: 
5-C. Lease or rental. "Lease" or "rental" includes sublease or subrental and means 
any transfer of possession or control of tangible personal property for a fixed or 
indeterminate term for consideration. A lease or rental may include future options to 
purchase or extend. 
A. 
"Lease" or "rental" includes agreements covering motor vehicles and trailers 
l3 
when the amount of consideration may be increased or decreased by reference to the 
amount realized upon sale or disposition of the property, as defined in Section 
7701(h)(l) of the Code. 
B. "Lease" or "rental" does not include: 
(1) Any transfer of possession or control of property under a security agreement 
or deferred payment plan that requires the transfer of title upon completion of the 
required payments; 
(2) Any transfer of possession or control of property under an agreement that 
requires the transfer of title upon completion of required payments and payment 
of an option price that does not exceed the greater of $100 and 1 % of the total 
required payments; or 
(3) Providing tangible personal property along with an operator for a fixed or 
indeterminate period of time. A condition of this exclusion is that the operator is 
necessary for the equipment to perform as designed. For the pumose of this 
paragraph, an operator must do more than maintain, inspect or set up the tangible 
personal property. 
Sec. E-IO. 36 MRSA §1752, sub-§8-A, as repealed and replaced by PL 2001, c. 
439, Pt. TITr, §1 and affected by §3, is amended to read: 
8-A. Prepared food. "Prepared food" means: 
A. Meals or items usually consumed as part of a meal served on or off the premises 
of the retailer; and 
B. Food and drinks that are prepared by the retailer for human consumption, and 
ready for consumption without further preparationt and that are not grocery staples, 
including, but not limited to: 
(1) Candy and confections, including, but not limited to, marshmallows and 
marshmallow creme or fluff; 
(2) Soft drinks; 
(3) Sandwiches and prepared salads: 
(4) 
Supplemental meal items such as com chips, potato chips and crisped 
vegetable or fruit chips, pork rinds, pretzels, crackers, popped popcorn, cheese 
sticks and cheese puffs; 
(5) Fruit bars, granola bars, breakfast bars, rice cakes, bread sticks and dried-
sugared fruit; 
(6) Roasted nuts and seeds; 
(7) Desserts and bakery items, including, but not limited to, doughnuts, cookies, 
pastries, toaster pastries, croissants, cakes, pies, ice cream cones, ice cream, ice 
milk, frozen confections, frozen yogurt, sherbet, ready-to-eat pudding and 
gelatins and dessert sauces; and 
(8) Meat jerky, meat bars and dips. 
C. All food and drinks sold from an establisBmeBt WHose sales of food aftd srinks 
tHat are prepared by the retailer aOOO1::lllt for more thaft 75% of tHe establishmsftt's 
gross receipts. 
"Prepared food" does not ineh:lde Bl:llk sales of grocery staples. 
As used in this subsection, "without further preparation" means that the product does not 
require boiling, frying. grilling, baking or cooking of any kind or is not mixed with other 
products before being boiled, fried, grilled, baked or cooked and "without further 
preparation" does not include toasting, microwaving or otherwise heating a product for 
palatability rather than for the purpose of cooking the product. 
Sec. E-ll. 36 MRS A §1752, sub-§8-C is enacted to read: 
8-C. Personal care services. "Personal care services" includes services related to 
the human body including hair care and maintenance, body piercing, tattooing, tanning, 
massage, nail care, foot care, reflexology, spa treatments and electrolysis; memberships 
or fees paid for fitness training, health clubs and spas; and elective cosmetic medical 
procedures. Except for elective cosmetic medical procedures, "personal care services" 
does not include medical services or services ordered by a physician. 
Sec. E-12. 36 MRSA §1752, sub-§8-D is enacted to read: 
8-D. Personal property services. "Personal property services" includes services 
related to personal property, including dry cleaning: laundry and diaper services not 
including self-service laundry services; embroidery and monogramming; car washing; 
pressure cleaning and washing; pet services such as exercising, sitting, training, grooming 
and boarding for nonmedical purposes; picture framing; domestic services, including 
house cleaning, furniture and rug cleaning; interior decoration; meal preparation; 
butchering; art restoration; warehousing and storage, including rental of storage units and 
warehouse space, but not including warehousing and storage services provided to a 
business; moving services; vehicle towing; and boat mooring. 
"Personal property 
services" does not include fabrication services as defined in section 2551, subsection 3. 
Sec. E-13. 36 MRS A §1752, sub-§9-E is enacted to read: 
9-E. Real property services. "Real property services" means services related to real 
property including repairs. maintenance and other service to buildings and land, such as 
electrical, plumbing, cooling, heating, flooring and structure; painting and papering; 
janitorial services; other household operations including gutter cleaning, grounds 
maintenance, landscaping, tree service and removal, driveway sealing and lawn care; pest 
control; security systems installation and monitoring; fire protection; pool service and 
maintenance; chimney service and cleaning; snow plowing, shoveling and removal; waste 
removal; asbestos removal other than services provided to a business; and building 
moving services. 
"Real property services" does not include construction services, 
including construction of bUildings, excavation, well drilling or installation of septic 
systems. 
"Real property services" does not include asbestos removal; construction, 
rehabilitation or renovation of buildings, structures or facilities; site work; well drilling; 
or installment of septic systems. For purposes of this subsection, "construction services" 
means the construction of a new building, structure or facility, including the addition of 
square footage to an existing structure and the rehabilitation of an existing structure. 
Sec. E-14. 36 MRSA §1752, sub-§l1, as amended by PL 2005, c. 218, §§14 and 
15, is further amended to read: 
11. Retail sale. "Retail sale" means any sale, lease or rental of tangible personal 
property in the ordinary course of business for any purpose other than for resale, except 
resale as a casual sale, in the form of tangible personal property. "Retail sale" also means 
any sale of a taxable service in the ordinary course of business for any purpose other than 
for resale, except resale as a casual sale. 
A. "Retail sale" inel'udes: 
(1) Conditional sales, installment lease sales and any other transfer of tangible 
personal property when the title is retained as s6el:lfity for the payment of the 
pl:lfehase priee and is intended to be transferred later; and 
(2) Sale of pro duets for internal human eonsumption to a person for resale 
through vending n1aehines when sold to a person more than 50% of v,tftose gress 
reeeipts from the retail sale of tangible personal property are derived from sales 
through 'lending maerunes. The tax must be paid by the retailer to the State. 
B. "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; ill: 
(3) The sale, to a person engaged in the business of renting automobiles, of 
automobiles, integral parts of automobiles or aeeessories to automobiles, for 
rental or for liSe in an automobile rented on a short term basis; 
(4) The sale, to a person engaged in the business of renting video media and 
video e<f1:1"ipment, of viaeo ffieaia or video equipment for rental; 
(5) 
The sale, to a person engaged in the business of renting or leasing 
automobiles, of automobiles for rental or lease for one year or more; 
(6) The sale, to a person engaged in the business of providing cable or satellite 
television services, of ass06iated eE}Uipment for rental or lease to subscribers in 
conjunctioa with a sale of extended cable or eJ.tended satellite television services; 
er 
(7) The sale, to a person engaged ia the basiness of renting furniture, or audio 
media and audio equipment, of furniture, audio media or audio equipment for 
rental pursuant to a rental purchase agreement as defined in Title 9 A, sectioa 11 
~ 
(8) The sale, to a person engaged in the business of renting or leasing tangible 
personal property, of tangible personal property for lease or rental. 
l3 
Sec. E-15. 36 MRSA §1752, sub-§13, as amended by PL 1981, c. 706, §20, is 
further amended to read: 
13. Sale. "Sale" means any transfer, exchange or barter, in any manner or by any 
means whatsoever, for a consideration and includes leases and contrasts p~able By rental 
or license fees for the right of possession and use, but only whea such leases and 
contracts are deemed by the State Tax Assessor to be in lieu of parchase lease or rental of 
tangible personal property. 
Sec. E-16. 36 MRSA §1752, sub-§14, ~, as amended by PL 2005, c. 675, §1 
and affected by §2, is further amended to read: 
B. "Sale price" does not include: 
(1) Discounts allowed and taken on sales; 
(2) 
Allowances in cash or by credit made upon the return of merchandise 
pursuant to warranty; 
(3) The price of property returned by customers, when the full price is refunded 
either in cash or by credit; 
(4) The price received for labor or services used in installiag or applying or 
repaffing the property sold, if separately eharged or stated; 
(5) Any amount charged or collected, in lieu of a gratuity or tip, as a specifically 
stated service charge, when that amount is to be disbursed by a hotel, motel, 
restaurant or other eating establishment to its employees as wages; 
(6) The amount of any tax imposed by the United States on or with respect to 
retail sales, whether imposed upon the retailer or the consumer, except any 
manufacturers', importers', alcohol or tobacco excise tax; 
(7) The 60st of transportation from the retailer's place of business or other point 
from which shipment is made direst}y to the p\H'ooaser, proIAded that those 
charges are separately stated and the transportation ocears by means of 6ommon 
6arTier, 60atrast carrier or the United States mail; 
(8) The fee imposed by Title 10, section 1169, subsection 11; 
(9) The fee imposed by section 4832, subsection 1; 
(10) The lead-acid battery deposit imposed by Title 38, section 1604, subsection 
2-B; or 
(11) Any amount charged or collected by a person engaged in the rental of living 
quarters as a forfeited room deposit or cancellation fee if the prospective 
occupant of the living quarters cancels the reservation on or before the scheduled 
date of arrival. 
Sec. E-17. 36 MRSA §1752, sub-§14-G is enacted to read: 
14-G. Soft drink. "Soft drink" means any nonalcoholic beverage that contains 
natural or artificial sweeteners. "Soft drink" does not include any beverage that contains 
milk or milk products, greater than 50% of vegetable or fruit juice by volume or flavored 
or unflavored soy milk, rice milk, almond milk, grain milk and similar milk substitutes. 
Sec. E-18. 36 MRSA §1752, sub-§17-B, as enacted by PL 2003, c. 673, Pt. V, 
§ 19 and affected by §29, is repealed and the following enacted in its place: 
17-B. Taxable service. "Taxable service" means: 
A. Rental of living quarters in a hotel, rooming house or tourist or trailer camp; 
B. Transmission and distribution of electricity; 
C. Rental or lease of tangible personal property; 
D. Sale of prepaid calling service; 
E. Amusement, entertainment and recreation services; 
F. Installation, repair and maintenance services; 
G. Personal care services; 
H. Personal property services; 
I. Real property services; and 
J. Transportation and delivery services. 
Sec. E-19. 36 MRSA §1752, sub-§19-A is enacted to read: 
19-A. 
Transportation and delivery services. 
"Transportation and delivery 
services" means purchases of intrastate transportation of persons including transportation 
by taxi, limousine, rail, water, air, van pools or bus; the service of providing intrastate 
transportation of property other than that service provided to a business: independent 
courier services: and travel agency service fees. 
Sec. E-20. 36 MRSA §1752, sub-§21, as amended by PL 2005, c. 215, §17, is 
further amended to read: 
21. Use. "Use" includes the exercise in this State of any right or power over tangible 
personal property incident to its ownership, ffiehulffig the derivation of income, whether 
recei'.'ea in money or in the form of other benefits, by a lessor frem the rental of tangible 
personal property located in this State. 
Sec. E-21. 36 MRS A §1754-B, sub-§l, ~C, as enacted by PL 1995, c. 640, §3, 
is amended to read: 
C. Every lessor engaged in the leasing of tangible personal property located in this 
State that aoes not maiHtain a place of busiBess iB this State but makes retail sales to 
purchasers frem this State; 
Sec. E-22. 36 MRSA §1758, as repealed and replaced by PL 1999, c. 708, §24, is 
repealed. 
Sec. E-23. 36 MRSA §1760, sub-§6,~, as amended by PL 1999, c. 502, §2, is 
further amended to read: 
D. 
To residents of incorporated nonprofit church-affiliated congregate housing 
facilities for the elderly in which at least 75% of the units are available for leasing to 
eligible lower-income residents; aad 
Sec. E-24. 36 MRSA §1760, sub-§6, ~E, as enacted by PL 1999, c. 502, §3, is 
amended to read: 
E. Served by colleges to employees of the college when the meals are purchased 
with debit cards issued by the colleges":; and 
Sec. E-25. 36 MRSA §1760, sub-§6, ~F is enacted to read: 
F. Served by a nonprofit recreation and vacation camp. 
Sec. E-26. 36 MRSA §1760, sub-§14 is repealed. 
Sec. E-27. 36 MRSA §1760, sub-§24, is amended to read: 
24. Funeral services. 
Sales of funeral services, excluding the use of tangible 
personal property in connection with funeral services. 
Sec. E-28. 36 MRSA §1760, sub-§32-A is enacted to read: 
32-A. Services to certain machinery and equipment. Sales of taxable services 
performed on machinery and equipment exempt from sales tax under subsections 29 to 
32. 
Sec. E-29. 36 MRSA §1760, sub-§34, as amended by PL 2005, c. 218, §23, is 
repealed. 
Sec. E-30. 36 MRSA §1760, sub-§45, as amended by PL 2005, c. 519, Pt. EE, 
§ 1 and affected by §3, is further amended to read: 
45. Certain property purchased outside State. Sales of property purchased and 
used by the present owner outside the State: 
A. If the property is an automobile, as defined in Title 29-A, section 101, subsection 
7, and if the owner was, at the time of purchase, a resident of the other state and 
either employed or registered to vote there; 
A-I. If the property is a watercraft that is registered outside the State by an owner 
who at the time of purchase was a resident of another state and the watercraft is 
present in the State not more than 30 days during the 12 months following its 
purchase for a purpose other than temporary storage; 
A-2. If the property is a snowmobile or all-terrain vehicle as defined in Title 12, 
section 13001 and the purchaser is not a resident of the State; 
A-3. If the property is an aircraft not exempted under subsection 88 and the owner at 
the time of purchase was a resident of another state or tax jurisdiction and the aircraft 
is present in this State not more than 20 days during the 12 months following its 
purchase, exclusive of days during which the aircraft is in this State for the purpose 
of undergoing "major alterations," "major repairs" or "preventive maintenance" as 
those tenns are described in 14 Code of Federal Regulations, Appendix A to Part 43, 
as in effect on January 1, 2005. For the purposes of this paragraph, the location of an 
aircraft on the ground in the State at any time during a day is considered presence in 
the State for that entire day; or 
B. For more than 12 months in all other cases. 
Property, other than automobiles, watercraft, snowmobiles, all-terrain vehicles and 
aircraft, that is required to be registered for use in this State does not qualify for this 
exemption unless it was registered by its present owner outside this State more than 12 
months prior to its registration in this State. If property required to be registered for use 
in this State was not required to be registered for use outside this State, the owner must be 
able to document actual use of the property outside this State for more than 12 months 
prior to its registration in this State. For purposes of this subsection, "use" does not 
include storage but means actual use of the property for a purpose consistent with its 
design. This exemption does not apply to leased property. 
Notwithstanding section 1752-A, "resident" may include an individual, an association, a 
society, a club, a general partnership, a limited partnership, a limited liability company, a 
trust, an estate, a corporation and any other legal entity. 
Sec. E-31. 36 MRSA §1760, sub-§90 is enacted to read: 
90. Certain taxable services. The sale of taxable service sold by a person that has 
made sales taxable under this chapter during the most recent calendar year of no more 
than $5,000. 
Sec. E-32. 36 MRSA §1760-C, as amended by PL 2005, c. 622, §9, is further 
amended to read: 
§1760-C. Exempt activities 
The tax exemptions provided by section 1760 to a 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 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 when purchasing property 
or services intended to be used by the holder primarily in the exempt activity. When an 
otherwise qualifying 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. The tax exemptions provided by section 1760 
to a person based upon its charitable, nonprofit or other public purposes do not apply to 
the sale of meals or lodging or the rental of automobiles. 
Sec. E-33. 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 +% 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; +% 8% on the value of rental of living quarters in any hotel, rooming 
house or tourist or trailer camp; +Q% 15% on the value of rental for a period of less than 
one year of an automobile; +% 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. E-34. 36 MRSA §1811, 3rd ~, as repealed and replaced by PL 2003, c. 510, 
Pt. C, § 12 and affected by § 13, is repealed. 
Sec. E-3S. 36 MRSA §1812, sub-§l, as reallocated by PL 1999, c. 790, Pt. A, 
§48, is repealed and the following enacted in its place: 
I. Computation. Every retailer must add the sales tax imposed by section 1811 to 
the sale price on all sales of tangible personal property and taxable services that are 
subject to tax under this Part. The tax when so added is a debt of the purchaser to the 
retailer until it is paid and is recoverable at law by the retailer from the purchaser in the 
same manner as the sale price. When the sale price involves a fraction of a dollar, the tax 
computation must be carried to the 3rd decimal place, then rounded down to the next 
whole cent whenever the 3rd decimal place is one, 2, 3 or 4 and rounded up to the next 
whole cent whenever the 3rd decimal place is 5,6, 7,8 or 9. 
Sec. E-36. 36 MRSA §1812, sub-§2, as amended by PL 1991, c. 846, §24, is 
further amended to read: 
2. Several items. When several purchases are made together and at the same time, 
the tax ffit:tSt may be computed on each item individually or on the total amount of the 
several items, exoept that Jlurchases taxed at differetlt rates must be separately totaled as 
the retailer may elect. 
Sec. E-37. 36 MRS A §1817 is enacted to read: 
§1817. Accelerated payment oftax on leases and rentals 
The tax imposed by this Part on the rental or lease of tangible personal property must 
be collected by the lessor at the time the property that is the subject of the lease is 
delivered to the lessee or at the time the initial payment under the lease is required to be 
made by the lessee, whichever is earlier. on the basis of the total amount of the 
consideration to be paid by the lessee under the terms of the lease agreement. If the total 
amount of the consideration for the lease includes amounts that are not calculated at the 
time the lease is executed, the tax attributable to those amounts must be collected by the 
lessor at the time those amounts are billed to the lessee. In the case of an open-end lease, 
the tax must be collected by the lessor on the basis of the total amount to be paid during 
the initial fixed term of the lease, and then for each subsequent renewal period as it comes 
due. 
For purposes of this section, "consideration" includes, without limitation, the 
amount of any down payment, trade-in credit or 3rd-party rebate that is applied to reduce 
the cost of the leased property upon which the lease payments are computed. Collection 
and remittance of the tax is the responsibility of the person that negotiates the lease 
transaction with the lessee. 
Sec. E-38. 36 MRSA §1861, as amended by PL 1995, c. 640, §6, is further 
amended to read: 
§1861. Imposition 
A tax is imposed, at the respeetive rate provided in section 1811, on the storage, use 
or other consumption in this State of tangible personal property or a taxable service, the 
sale of which would be subject to tax under section 1764 or 1811. Every person so 
storing, using or otherwise consuming is liable for the tax until the person has paid the tax 
or has taken a receipt from the seller, as duly authorized by the assessor, showing that the 
seller has collected the sales or use tax, in which case the seller is liable for it. Retailers 
registered under section 1754-B or 1756 shall collect the tax and make remittance to the 
assessor. The amount of the tax payable by the purchaser is that provided in the case of 
sales taxes by section 1812. When tangible personal property is leased outside the State 
and subsequently brought into the State, the tax due under this section is the proportion of 
the tax otherwise due under this Part that the remaining portion of the lease bears to the 
entire term of the lease. 
When tangible personal property purchased for resale is 
withdrawn from inventory by the retailer for the retailer's own use, use tax liability 
accrues at the date of withdrawal. 
Sec. E-39. 36 MRSA §1862, as amended by PL 1987, c. 772, §24, is further 
amended to read: 
§1862. Taxes paid in other jurisdictions 
The i:lSe tax proYisions of ohaj3ters 211 to 225 shall imposed by this Part does not 
apply with respeot to the use, storage or other consumption in this State of purchases 
outside the State where the purchaser has paid a sales or use tax equal to or greater than 
the amount imposed by chapters 211 to 225 this Part in another taxing jurisdiction,--the 
proof of paymem of the tax to be aeeordiH:g to rnles ffiade by the State Tax Assessor. If 
the amount of sales or use tax paid in another taxing jurisdiction is not equal to or greater 
than the amount of tax imposed by ehaj3ters 211 to 225 this Part, then the purchaser shall 
pay to the State Tax Assessor an amount sufficient to make the total amount of tax paid in 
the other taxing jurisdiction and in this State equal to the amount imposed by chapters 
to 225 this Part. When tangible personal property is leased outside the State and 
subsequently brought into the State. the credit allowed under this section may not exceed 
the proportion of the tax otherwise due under this Part that the period for which the 
property was leased in the other taxing jurisdiction bears to the entire term of the lease. 
Sec. E-40. 36 MRSA §2018 is enacted to read: 
§2018. Removal from the State of leased property 
If leased property with respect to which the tax imposed by this Part has been paid on 
an accelerated basis is permanently removed from the State. the lessee is entitled to a 
refund of the tax allocable to that portion of the lease that remains in effect after the 
property has been removed from the State. A refund may not be issued unless the taxing 
jurisdiction to which the property is removed allows a corresponding refund with respect 
to the lease of property upon which a sales or use tax was due and has been paid in this 
State. A refund may not be issued if the other taxing jurisdiction allows a credit to the 
lessee for the sales or use tax paid in this State on the lease transaction. The refund must 
be requested in accordance with the provisions of section 2011. 
Sec. E-41. 36 MRSA §2551, sub-§l, as enacted by PL 2003, c. 673, Pt. V, §25 
and affected by §29, is repealed. 
Sec. E-42. 36 MRSA §2551, sub-§l-C is enacted to read: 
I-C. Ancillary services. "Ancillary services" means services that are associated 
with or incidental to the provision of telecommunications services including. but not 
limited to, conference bridging service. detailed telecommunications billing service, 
directory assistance, vertical service and voice mail services. 
Sec. E-43. 36 MRSA §2551, sub-§l-D is enacted to read: 
I-D. 
Conference bridging service. 
"Conference bridging service" means an 
ancillary service that links 2 or more participants in an audio or video conference call and 
may include the provision of a telephone number. "Conference bridging service" does 
not include the telecommunications services used to reach the conference bridge. 
Sec. E-44. 36 MRSA §2551, sub-§l-E is enacted to read: 
I-E. Detailed telecommunications billing service. "Detailed telecommunications 
billing service" means an ancillary service of separately stating information pertaining to 
individual calls on a customer's billing statement. 
Sec. E-45. 36 MRSA §2551, sub-§l-F is enacted to read: 
I-F. Directory assistance. "Directory assistance" means an ancillary service of 
providing telephone number information or address information. 
Sec. E-46. 36 MRSA §2551, sub-§2, as amended by PL 2005, c. 12, Pt. TIT, §2 
and affected by §4, is further amended to read: 
2. Extended cable and satellite television or radio services. "Extended cable and 
satellite television or radio services" means all cable and satellite television or radio 
service that is in addition to when more than the minimum service that ean be }'ll:1Fehased 
frem.-a provided by the cable or satellite television or radio supplier, inell:1ding the l:1se of 
assoeiated eql:1ipmeflt for whish a eharge is mads is purchased. It does not include a lease 
or the installation of the associated equipment for which a separate charge is levied. 
"Minimum service" means the least amount of service marketed by the supplier to the 
general public. 
Sec. E-47. 36 MRSA §2551, sub-§4, as enacted by PL 2003, c. 673, Pt. V, §25 
and affected by §29, is repealed. 
Sec. E-48. 36 MRSA §2551, sub~§7, as enacted by PL 2003, c. 673, Pt. V, §25 
and affected by §29, is repealed. 
Sec. E-49. 36 MRS A §2551, sub-§20, as enacted by PL 2003, c. 673, Pt. V, §25 
and affected by §29, is repealed. 
Sec. E-50. 36 MRSA §2551, sub-§20-A is enacted to read: 
20-A. Telecommunications services. "Telecommunications services" means the 
electronic transmission, conveyance or routing of voice, data, audio, video or any other 
information or signals to a point or between or among points. "Telecommunications 
services" includes transmission, conveyance or routing in which computer processing 
applications are used to act on the form, code or protocol of the content for purposes of 
transmission, conveyance or routing without regard to whether the service is referred to 
as "voice over Internet protocol services" or is classified by the Federal Communications 
Commission as enhanced or value-added. 
"Telecommunications services" does not 
include: 
A. 
Data processing and information services that allow data to be generated, 
acquired, stored, processed or retrieved and delivered by an electronic transmission to 
a purchaser where the purchaser's primary purpose for the underlying transaction is 
the processed data or information; 
B. Installation or maintenance of wiring or equipment on a customer's premises; 
C. Tangible personal property; 
D. Advertising, including, but not limited to, directory advertising; 
E. Billing and collection services provided to 3rd parties; 
F. Internet access service; 
G. Radio and television audio and video programming services, regardless of the 
medium, including the furnishing of transmission, conveyance and routing of the 
services by the programming service provider. Radio and television audio and video 
programming services include, but are not limited to, cable service as defined in 47 
United States Code, Section 522(6) and audio and video programming services 
delivered by commercial mobile radio service providers, as defined in 47 Code of 
Federal Regulations, Section 20.3; 
H. Ancillary services; or 
1. Digital products delivered electronically, including, but not limited to, software, 
music, video, reading materials and ringtones. 
Sec. E-51. 36 MRSA §2551, sub-§20-B is enacted to read: 
20-B. Vertical service. "Vertical service" means an ancillary service that is offered 
in connection with one or more telecommunications services that offers advanced calling 
features that allow customers to identify callers and to manage multiple calls and call 
connections, including conference bridging services. 
Sec. E-52. 36 MRSA §2551, sub-§21, as enacted by PL 2003, c. 673, Pt. V, §25 
and affected by §29, is repealed. 
Sec. E-53. 36 MRSA §2551, sub-§22 is enacted to read: 
22. Voice mail service. "Voice mail service" means an ancillary service that enables 
a customer to store, send or receive recorded messages. "Voice mail service" does not 
include any vertical services that the customer may be required to have in order to use the 
voice mail service. 
Sec. E-54. 36 MRSA §2552, sub-§l, as amended by PL 2005, c. 386, Pt. S, §§4 
to 6 and affected by §9, is further amended to read: 
1. Rate. A tax at the rate of 5% is imposed on the value of the following services 
sold in this State: 
A. Extended cable and satellite television or radio services; 
B. Fabrication services; 
C. Rental of via eo media ana video equipment; 
D. 
Rental of furniture, al:ldio media ana audio equipment purSl:laflt to a rental 
purohase agreement as defin.ea in: Title 9 A, seotion 11 105; 
E. Telecommunications services; 
F. The installation, maintenance or repair of telecommunications equipment; 
G. Private nomnedical institution services; 
H. Community support services; 
I. Day habilitation services; 
J. Personal support services; aOO 
K. Residential training services.,.~ 
L. Directory advertising services; and 
M. Ancillary services. 
Sec. E-55. 36 MRSA §2557, sub-§30, as amended by PL 2005, c. 218, §35, is 
further amended to read: 
30. Sales for resale. Sales of services to another service provider for resale; aad 
Sec. E-56. 36 MRSA §2557, sub-§31, as amended by PL 2005, c. 622, §12, is 
further amended to read: 
31. Constrnction 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 govermnent agency provided exemption under this section, except as 
otherwise provided by section 2560:-; and 
Sec. E-57. 36 MRSA §2557, sub-§32 is enacted to read: 
32. Prepaid calling service. Prepaid calling service. 
Sec. E-58. 36 MRSA §2559, as amended by PL 2005, c. 386, Pt. S, §7 and 
affected by §9, is further amended to read: 
§2559. Application of revenues 
Revenues derived by the tax imposed by this chapter must be credited to a General 
Fund suspense account. On or before the last day of each month, the State Controller 
shall transfer a percentage of the revenues received by the State Tax Assessor during the 
preceding month pursuant to the tax imposed by section 2552, subsection 1, paragraphs A 
to F and Land M to the Local Govermnent Fund as provided by Title 30-A, section 5681, 
subsection 5. The balance remaining in the General Fund suspense account must be 
transferred to service provider tax General Fund revenue. On or before the 15th day of 
each month, the State Controller shall transfer all revenues received by the assessor 
during the preceding month pursuant to the tax imposed by section 2552, subsection 1, 
paragraphs G to K to the Medical Care Services Other Special Revenue Funds account, 
the Other Special Revenue Funds Mental Health Services - Community Medicaid 
program, the Medicaid Services - Mental Retardation program and the Office of 
Substance Abuse - Medicaid Seed program within the Department of Health and Human 
Services. 
Sec. E-59. Appropriations and allocations. The following appropriations and 
allocations are made. 
ECONOMIC AND COMMUNITY DEVELOPMENT, DEPARTMENT OF 
Office of Tourism 0577 
Initiative: Allocates funds to the Tourism Marketing Promotion Fund due to the increase 
in certain sales tax revenue. 
OTHER SPECIAL REVENUE FUNDS 
All Other 
OTHER SPECIAL REVENUE FUNDS TOTAL 
PART F 
2007-08 
$0 
$0 
Sec. F-l. 36 MRSA §4641, sub-§2-B is enacted to read: 
2008-09 
$1,001,493 
$1,001,493 
2-B. Residential property. "Residential property" means real property consisting of 
one to 4 dwelling units, at least one of which is intended to be used as a residence by the 
grantee. 
Sec. F-2. 36 MRSA §4641-A, sub-§l, as enacted by PL 2001, c. 559, Pt. I, §3 
and affected by § 15, is repealed. 
Sec. F-3. 36 MRSA §4641-A, sub-§l-A is enacted to read: 
I-A. Deeds. A tax is imposed at the following rates on each deed by which any real 
property in this State is transferred. The tax is imposed 112 on the grantor and 112 on the 
grantee. 
A. The rate of tax on residential property with a value of $1,000,000 or less that is 
intended to be used by the grantee as a permanent residence, as defined in section 
681, subsection 3, within 6 months of the transfer is: 
(1) Six-tenths of one percent on the first $250,000 of value; 
(2) Eight-tenths of one percent on the next $250,000 of value; and 
(3) One percent on the next $500,000 of value. 
B. The rate of tax on residential property with a value exceeding $1,000,000 is 1.5%. 
C. Except as provided in paragraphs A and B, the rate of tax on real property is 1 %. 
Sec. F-4. 36 MRSA §4641-A, sub-§2, ~A, as enacted by PL 2001, c. 559, Pt. I, 
§ 3 and affected by § 15, is repealed and the following enacted in its place: 
A. The rate of the tax is 1 % of the value of the real property owned by the entity and 
located in this State. 
Sec. F-S. 36 MRSA §4641-B, sub-§3, as enacted by PL 2001, c. 559, Pt. I, §4 
and affected by § 15, is repealed and the following enacted in its place: 
3. Disposition of funds. 
From the tax collected under this section during the 
previous month, each register of deeds shall retain 10% of the amount of the tax 
attributable to the first 0.44% of the value of each transfer subject to tax under this 
chapter and, on or before the 10th day of each month, pay to the State Tax Assessor the 
remainder. The amount retained by the register of deeds must be retained for the county 
and accounted for to the county treasurer as reimbursement for services rendered by the 
county in collecting the tax. If the tax collected is not paid by the 10th day of the month, 
the State Tax Assessor may impose interest pursuant to section 186. 
Sec. F-6. 36 MRSA §4641-B, sub-§4, as amended by PL 2007, c. 240, Pt. H, §1, 
is further amended to read: 
4. Distribution of State's share of proceeds. The State Tax Assessor shall pay all 
net receipts received pursuant to this section to the Treasurer of State, and shall at the 
same time provide the Treasurer of State with documentation showing the amount of 
revenues derived from the tax imposed by section 4641-A, subsection 1 and the amount 
of revenues derived from the tax imposed by section 4641-A, subsection 2. +he Until 
July 1, 2008, the Treasurer of State shall credit 112 of the revenues derived from the tax 
imposed by section 4641-A, subsection 1 to the General Fund and shall monthly pay the 
remaining 112 of such revenues to the Maine State Housing Authority, which shall 
deposit the funds in the Housing Opportunities for Maine Fund created in Title 30-A, 
section 4853, except that in fiscal year 2003-04, fiscal year 2004-05 and fiscal year 
2005-06, $7,500,000 of the remaining 1/2 of those revenues must be transferred to the 
General Fund before any payments are made to the Maine State Housing Authority, in 
fiscal year 2006-07, $7,687,067 of the remaining 112 of those revenues must be 
transferred to the General Fund before any payments are made to the Maine State 
Housing Authority and in fiscal year 2007-08 and fiscal year 2008-09, $5,000,000 of the 
remaining 112 of those revenues must be transferred to the General Fund before any 
payments are made to the Maine State Housing Authority. Beginning July 1, 2008, the 
Treasurer of State shall credit an amount equal to 50% of the revenue received by the 
State attributable to the tax on the first 0.44% of the value of each transfer subject to tax 
imposed under section 4641-A, subsection 1 to the Maine State Housing Authority, which 
shall deposit the funds in the Housing Opportunities for Maine Fund. The remainder 
must be credited to the General Fund. The Treasurer of State shall credit to the General 
Fund all of the revenues derived from the tax imposed by section 4641-A, subsection 2. 
Sec. F-7. Effective date. This Part takes effect October 1,2007. 
PARTG 
Sec. G-l. 28-A MRS A §16S2, sub-§l, as repealed and replaced by PL 1987, c. 
342, § 116, is amended to read: 
I 
1. 
Excise tax on malt liquor. An excise tax is imposed on the privilege of 
manufacturing and selling malt liquor in the State. The Maine manufacturer or importing 
wholesale licensee shall pay an excise tax of 25¢ per gallon on all malt liquor sold in the 
State that is manufactured by a manufacturer that produced in total less than 100,000 
barrels of malt liquor in the previous calendar year and 50¢ per gallon on all other malt 
liquor sold in the State. 
Sec. G-2. 28-A MRSA §1652, sub-§l-A, as amended by PL 1993, c. 462, §7, is 
further amended to read: 
I-A. Excise tax on low-alcohol spirits products and fortified wines. An excise 
tax is imposed on the privilege of manufacturing and selling low-alcohol spirits products 
and fortified wines in the State. The Maine manufacturer or importing wholesale licensee 
shall pay an excise tax of $+ $2 per gallon on all low-alcohol spirits products and fortified 
wines manufactured in or imported into the State. 
Sec. G-3. 28-A MRS A §1652, sub-§2, as amended by PL 1997, c. 767, §4, is 
further amended to read: 
2. Excise tax on wine; hard cider. An excise tax is imposed on the privilege of 
manufacturing and selling wine in the State. The Maine manufacturer or importing 
wholesale licensee shall pay an excise tax of ~ 
60¢ per gallon on all wine other than 
sparkling wine manufactured in or imported into the State, $+ R per gallon on all 
sparkling wine manufactured in or imported into the State and ~ 
50¢ per gallon on all 
hard cider manufactured in or imported into the State. 
PARTB 
Sec. B-1. 5 MRSA §1518-A, as enacted by PL 2005, c. 2, Pt. A, §4 and affected 
by §14, is amended to read: 
§1518-A. Tax Relief Fund for Maine Residents 
1. Tax Relief Fund for Maine Residents. There is created the Tax Relief Fund for 
Maine Residents, referred to in this section as "the fund," which must be used to provide 
tax relief to residents of the State. The fund consists of all resources transferred to the 
fund under this section and section 1536 and other resources made available to the fund. 
2. Nonlapsing fund. Any unexpended balance in the Tax Relief nlfld for Maine 
Residents may fund does not lapse but lffilst be lli carried forward to be used pursuant to 
subsection 1. 
3. Transfer from income tax and sales tax revenue growth. Beginning with fiscal 
year 2009-10, at the close of each fiscal year, the State Controller shall transfer to the 
fund 15% of the increase in revenue received by the State under Title 36, Parts 3 and 8 
for the fiscal year being closed over revenue received under Title 36, Parts 3 and 8 for the 
previous fiscal year. 
I 
4. Legislation authorized. The joint standing committee of the Legislature having 
iurisdiction over taxation matters may submit legislation to provide tax relief using 
money available in the fund. 
PART I 
Sec. 1-1. 30-A MRSA §5686 is enacted to read: 
§5686. Local sales tax increment disbursement 
1. Local sales tax increment. Beginning with fiscal year 2008-09, the State Tax 
Assessor shall gather and maintain information that demonstrates the amount of revenue 
and the amount of local sales tax increment for each fiscal year that is attributable to each 
municipality and the unorganized territory under Title 36, Part 3. For the purposes of this 
II 
section, "local sales tax increment" means 10% of the increase in revenue attributable to a 
municipality or the unorganized territory under Title 36, Part 3 over the amount 
attributable to the municipality or the unorganized territory in fiscal year 2008-09. 
2. Transfers. Beginning with fiscal year 2009-10, the State Tax Assessor shall 
certify to the State Controller by September 30th annually the local sales tax increment 
amounts needed to make payments under this section. The State Controller shall, within 
days after the certification, transfer those amounts to a local sales tax increment 
account, which must be established for this pumose. 
3. Payments to municipalities and the unorganized territory. The Treasurer of 
State shall pay by October 1st annually to each municipality and the Unorganized 
Territory Education and Services Fund under Title 36, chapter 115, from the local sales 
tax increment account established pursuant to subsection 2 an amount equal to the local 
sales tax increment. If the local sales tax increment for a municipality or the unorganized 
territory is $0 or less, a payment may not be made for that fiscal year. The State 
Treasurer shall pay the amount due under this section and provide an accounting of the 
amount to the municipality or the fiscal administrator of the unorganized territory no later 
than 6 months after the end of that fiscal year. The amount received under this section by 
a municipality or the fund may not reduce or be reduced by any other revenue sharing or 
state aid received by the municipality or the fund. An amount received by a municipality 
or the fund under this section must be used by the municipality to reduce property tax 
revenues in that municipality in an amount equal to the amount received in the fiscal year 
that the revenue is received. 
PART J 
Sec. J-l. Taxpayer information. The State Tax Assessor shall develop and 
make available to taxpayers in a format that can be easily understood by the average 
citizen a summary of the major changes to the State's tax structure contained in this Act, 
including information in the format of a brochure that can be made available to inform 
citizens of the changes. The analysis must identify changes in the impact of Maine's tax 
structure on Maine families and comparisons with the tax structure of representative 
states of a size and economy similar to that of Maine. 
PARTK 
Sec. K-l. 36 MRSA §684, sub-§l, as enacted by PL 1997, c. 643, Pt. HHH, §3 
and affected by § 1 0, is amended to read: 
1. 
Generally. The bureau shall furnish to the assessor of each municipality a 
sufficient number of printed forms to be filed by applicants for an exemption under this 
subchapter and shall determine the content of the forms. The forms must contain a place 
for the applicant's birth date. A municipality shall provide to its inhabitants reasonable 
notice of the availability of application forms. An individual claiming an exemption 
under this subchapter for the first time shall file the application form with the assessor or 
the assessor's representative. For an exemption from taxes based on the status of property 
lion April 1, 1998, the application must be filed by May 15, 1998. For taxes based on the 
status of property after April 1, 1998, the application must be filed by April 1 st of the 
year on which the taxes are based. 
Sec. K-2. 36 MRSA §949 is enacted to read: 
§949. Suspension of foreclosure for homesteads of persons 65 years of age or older 
Notwithstanding the other provisions of this subchapter, a tax lien mortgage may not 
be foreclosed with respect to the homestead as defined in section 681 of a person who is 
years of age or older who has been a resident in the homestead for 10 years or longer 
until the real estate is transferred by deed or at the death of the person eligible for the 
suspension of foreclosure provided in this section. Liens on the real estate continue in 
effect until the death of the property owner or the property is otherwise transferred, and 
interest on the unpaid taxes continues to accrue until the lien is satisfied. 
PARTL 
Sec. L-l. Appropriations and allocations. The following appropriations and 
allocations are made. 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Revenue Services - Bureau of 0002 
Initiative: Provides funds for Maine Revenue Services administrative costs related to the 
changes to several taxes, including funds for 2 Office Assistant II positions and one 
Accounting Associate II position effective October 1, 2007, one Accounting Associate II 
position and 2 Tax Examiner positions effective July 1, 2008 and 2 Tax Examiner 
positions effective January 1,2009. 
GENERAL FUND 
2007-08 
2008-09 
POSITIONS - LEGISLATIVE COUNT 
3.000 
8.000 
Personal Services 
$108,698 
$381,530 
All Other 
$686,466 
$489,026 
GENERAL FUND TOTAL 
$795,164 
$870,556 
SUMMARY 
This bill represents the work of the Joint Standing Committee on Taxation to reform 
Maine's tax structure and reduce the burden of taxes on Maine residents. This bill 
reduces taxes on Maine families by over $140,000,000. The bill contains the following 
provisions. 
Part A makes fundamental changes to simplify and reduce the burden of the State's 
income tax and create an income tax that is intended to be more beneficial to investment 
and economic growth in the State. The current structure of 4 tax brackets, personal 
exemptions and deductions is replaced by a flat rate of 6% on all taxable income. The 
progressivity of the current income tax is maintained through a household credit that 
alleviates the impact of the 6% rate on low-income and middle-income households. The 
corporate income tax is also changed to a flat rate at 8.93%. Conformity with certain 
federal business expensing and depreciation treatment is provided. The complicated and 
confusing alternative minimum tax on individuals is repealed. 
Part B provides property tax relief by increasing the homestead property tax 
deduction from $13,000 to $26,000. 
Part C provides further property tax relief by making the Property Tax and Rent 
Refund Program, currently known as "the Maine Residents Property Tax Program" or 
"the circuitbreaker program," available to a larger number of residents and increasing 
benefits. 
It requires the State to make greater efforts to increase awareness of the 
program and produce greater participation. 
Part D provides a process that permits persons 65 years of age or older to defer 
property taxes on their homesteads. The State would reimburse municipalities for the 
deferred taxes and acquire a lien on the property to collect what is owed when the 
property is sold or otherwise transferred. 
Part E broadens the sales tax base by including certain services and repealing certain 
exemptions. Part E also increases the sales tax on prepared food and lodging to 8% and 
the sales tax on rentals of automobiles of less than one year to 15%. 
Part F changes the format for the real estate transfer tax and provides that permanent 
residences with a value of $1,000,000 or less would be taxed at 0.6% on the first 
$250,000 of value, 0.8% on the next $250,000 of value and 1 % on the next $500,000 of 
value. Residential property valued at over $1,000,000 would be taxed at 1.5% and all 
other property would be taxed at 1 %. 
Part G doubles the excise tax on wine and malt liquor except for malt liquor produced 
by a manufacturer that produced less than 100,000 barrels in the previous calendar year. 
Part H provides that, beginning in fiscal year 2009-10, 15% of growth in sales and 
income tax would be transferred to the Tax Relief Fund for Maine Residents to be used 
for tax relief. 
Part I provides that, beginning in fiscal year 2009-10, 10% of sales tax revenue 
growth must be returned to the municipalities where the growth occurred. 
Part J requires the Department of Administrative and Financial Services, Bureau of 
Revenue Services to make information available to citizens that explains the State's tax 
structure and the changes contained in this Act. 
Part K provides that a lien for unpaid property taxes may not be foreclosed against 
the homestead of a person who is at least 65 years of age and has lived in the homestead 
for at least 10 years until the property is transferred by deed or upon death. Liens would 
continue in effect and would accrue interest until the lien is satisfied. 
Part L makes appropriations and allocations necessary to implement the bill. 
,ISCAL 7'OTE REQ{;IRED 
(S~':..l:lt_~~ch.ed) 
Approved: 06111/07 
;:b/ac:.. 
LD 
LR 2657(01) 
An Act To Cut Taxes on Maine Residents by over $125,000,000 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Other Special Revenue Funds 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Gross Revenue Impact 
Individual Income Tax 
Flat Rate at 6%, Household Credit 
Section 179 Confonnity 
Transfer, Tax Relieffor Maine Residents 
Corporate Income Tax 
Flat Rate at 8.93% 
Transfer, Tax Relief for Maine Residents 
Sales and Use Tax 
Expand Base, Repeal Exemptions 
Meals and Lodging to 8% 
Expanded Tax on Prepared Foods @ 8% 
Transfer, Tax Relief for Maine Residents 
Transfer, Local Tax Increment 
Fiscal Note for Original Bill 
Committee: Taxation 
Fiscal Note Required: Yes 
Fiscal Note 
2007-08 
2008-09 
($346,551 ) 
($72,188) 
$1,095,164 
$33,203,556 
$0 
$1,001,493 
$1,441,715 
$33,275,744 
($1,257,361) 
$84,519 
2007-08 
2008-09 
($85,392,300) 
($193,225,500) 
($2,066,400) 
($4,765,600) 
$0 
$0 
$1,020,000 
$6,822,500 
$0 
$0 
$41,937,440 
$117,846,793 
$8,227,200 
$26,890,000 
$11,116,800 
$35,400,000 
$0 
$0 
$0 
$0 
LR2657(OI) - Fiscal Note - Page 1 of2 
Projections 
2009-10 
$21,351,495 
$33,430,184 
$3,101,329 
$12,078,689 
$2,188,483 
Projections 
2009-10 
($185,952,600) 
($1,959,300) 
($8,036,691 ) 
$6,980,000 
($1,250,334) 
$121,588,905 
$28,110,000 
$35,890,000 
($6,864,505) 
($4,576,337) 
Projections 
2010-11 
$26,712,070 
$34,039,339 
$3,078,489 
$7,327,269 
$2,123,961 
Projections 
2010-11 
($195,777,200) 
$2,042,900 
($7,115,273) 
$7,166,500 
($3,241,103) 
$125,725,359 
$29,340,000 
$36,470,000 
($7,617,605) 
($9,654,740) 
Projections 
Projections 
2007-08 
2008-09 
2009-10 
2010-11 
Real Estate Transfer Tax 
Graduated Tax Based on Value 
$23,450,000 
$36,820,000 
$40,686,100 
$45,446,374 
Beer and Wine 
Double Excise Tax (except for small 
$8,291,614 
$10,364,5 I 8 
$10,364,518 
$10,364,518 
manufacturers of malt liquor) 
Property Tax and Rent Refund Program 
Expand Circuitbreaker Program 
$0 
($7,315,000) 
($22,570,000) 
($23,698,500) 
Section 179 Reserve Fund Transfers 
($6,400,000) 
$4,522,554 
$1,857,416 
$0 
$184,354 
$33,360,265 
$14,267,172 
$9,451,230 
General Fund Appropriation Summary 
Homestead Property Tax Reimbursement 
$0 
$31,641,000 
$31,641,000 
$31,641,000 
Elderly Tax Deferal Porgram 
$0 
$492,000 
$1,060,875 
$1,647,008 
Administrative Costs 
$1,095,164 
$1,070,556 
$728,309 
$751,331 
$1,095,164 
$33,203,556 
$33,430,184 
$34,039,339 
Other Special Revenue Fund Summary 
Local Government Fund 
($1,283,021 ) 
($935,688) 
($931,476) 
($974,009) 
Tourism Marketing Promotion Fund 
$0 
$1,001,493 
$3,101,329 
$3,078,489 
Fund for the Efficient Delivery of Local and 
$25,660 
$18,714 
$18,630 
$19,480 
Regional Services 
'.R?t;;'\7{01\  Picr",llIJnt",  p.,,,,,, ') "f'')