An Act To Rebalance Maine's Tax Code
Maine Legislature, Session 123, LD 1560
Committee: Taxation
Sponsors: BLISS, PERRY, CAIN, CLEARY, DILL, MIRAMANT, PINGREE, SAMSON, SIROIS, TRINWARD
Amends: 36 MRSA §5219-N, 36 MRSA §5126, 36 MRSA §5111, 36 MRSA §5111-C, 36 MRSA §683, 36 MRSA §685, 36 MRSA §6201, 36 MRSA §6207, 36 MRSA §1752, 36 MRSA §1760, 36 MRSA §2015, 36 MRSA §2551, 5 MRSA §13090-K, 36 MRSA §1811, 28-A MRSA §1652, 36 MRSA §4641-A, 36 MRSA §4641-B

Legislative Document 
No. 1560 
H.P. 1085 
House of Representatives, March 20,2007 
An Act To Rebalance Maine's Tax Code 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative BLISS of South Portland. 
Cosponsored by Senator PERRY of Penobscot and 
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MILLICENT M. MacFARLAND 
Clerk 
Representatives: CAIN of Orono, CLEARY of Houlton, DILL of Cape Elizabeth, 
MIRAMANT of Camden, PINGREE of North Haven, SAMSON of Auburn, SIROIS of 
Turner, TRINWARD of Waterville. 
Printed on rel:Yc.:let..i puper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 36 MRSA §5219-N, sub-§l, as amended by PL 2003, c. 390, §48, is 
repealed and the following enacted in its place: 
1. Generally. Except as provided in subsection 2, an individual in a category 
described in this subsection is allowed a credit equal to the tax otherwise imposed on that 
individual by this Part. In no case may this credit reduce the Maine income tax to less 
than zero. An individual qualifies for the credit described in this section if: 
A. The individual is filing as a single individual or is married and filing separately 
and the individual's Maine taxable income determined as if the individual were a 
resident individual for the entire year is $4,000 or less; 
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B. The individual is filing a return as a head of household and the taxable income on 
the return determined as if the individual were a resident individual for the entire year 
is $6,000 or less; or 
C. The individual is filing a married joint return and the taxable income on the return 
determined as if the individuals were resident individuals for the entire year is $8,000 
or less. 
Sec. A-2. Application. This Part applies to tax years beginning on or after 
January 1, 2008. 
PART B 
Sec. B-1. 36 MRS A §5124-A, first~, as amended by PL 2005, c. 12, Pt. P, §5, is 
further amended to read: 
The standard deduction of a resident individual is equal to the standard deduction as 
determined in accordance with the Code, Section 63, except that for tax years beginning 
after 2002 but before 2008, the Code, Section 63(c)(2) must be applied as if the basic 
standard deduction is $5,000 in the case of a joint return and a surviving spouse and 
$2,500 in the case of a married individual filing a separate return. 
PART C 
Sec. C-1. 36 MRSA §5126, first ~, as amended by PL 2001, c. 583, §16, is 
further amended to read: 
For ineome tax years beginning on or after Jamlary 1, 1998 but before January 1, 
1999, a resident indiYidual is al\o'tved $2,400 for eaeh exemption that the individual 
properl;' elaims for the taxable year for federal ineome tax purposes, unless the taxpayer 
is elaimed as a dependent on another return. For ineome tax years beginning on or after 
JanuaFj' 1, 1999 but before January 1, 2000, a resident indh'idual is allo,It'ed $2,750 for 
eaeh exemption that the individual properly elaims for the taxable year fer federal ineome 
tax purposes, unless the taxpayer is elaimed as a dependent on another return. 
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income tax years beginning on or after January 1, 2000 but before January 1, 2008, a 
resident individual is allowed $2,8S0 for each exemption that the individual properly 
claims for the taxable year for federal income tax purposes, unless the taxpayer is claimed 
as a dependent on another return. For tax years beginning on or after January 1, 2008, a 
resident individual is allowed the same amount allowed under Section lSI of the Code 
for each exemption that the individual properly claims for the taxable year for federal 
income tax purposes, unless the taxpayer is claimed as a dependent on another return. 
PARTD 
Sec. D-l. 36 MRSA §5111, first~, as amended by PL 1999, c. 731, Pt. T, §1, is 
further amended to read: 
A tax is imposed for each taxasle year seginning on or after Janl:lary 1, 2000, on the 
Maine taxable income of every resident individual of this State. The amount of the tax is 
determined as provided in this section, except that the rates provided in this section for 
tax years beginning on or after January 1, 2008 must be adjusted as provided by section 
SIII-C. 
Sec. D-2. 36 MRSA §5111-C is enacted to read: 
§5111-C. Reductions in individual income tax rates 
1. Rate reduction in 2008. For tax years beginning in 2008, the 8.S% tax rates 
contained in section SIll, subsections 1-B, 2-B and 3-B are reduced to 8.2S%. 
2. Materials. The State Tax Assessor shall incorporate the changes arising from this 
section into the forms, instructions and withholding tables for the appropriate tax years. 
PARTE 
Sec. E-l. 36 MRSA §683, sub-§3, as amended by PL 200S, c. 2, Pt. F, §3 and 
affected by §S, is further amended to read: 
3. Effect on state valuation. Fifty percent of the The just value of homesteads 
exempt under this subchapter must be included in the annual determination of state 
valuation under sections 208 and 30S. 
Sec. E-2. 36 MRS A §683, sub-§4, as amended by PL 200S, c. 2, Pt. F, §3 and 
affected by §S, is further amended to read: 
4. Property tax rate. Fifty percent of the The value of homestead exemptions under 
this subchapter must be included in the total municipal valuation used to determine the 
municipal tax rate. The municipal tax rate as finally determined may be applied to only 
the taxable portion of each homestead qualified for that tax year. 
Sec. E-3. 36 MRSA §685, sub-§2, as amended by PL 200S, c. 2, Pt. F, §4 and 
affected by §S, is further amended to read: 
2. Entitlement to reimbursement by the State; calculation. A municipality that 
has approved homestead exemptions under this subchapter may recover from the State 
W% 100% of the taxes lost by reason of the exemptions upon proof in a form satisfactory 
to the bureau. The bureau shall reimburse the Unorganized Territory Education and 
Services Fund for W% 100% of taxes lost by reason ofthe exemption. 
Sec. E-4. Application. This Part applies to property tax valuations determined on 
or after April 1,2008. 
PART F 
Sec. F-l. 36 MRSA §6201, sub-§l, as amended by PL 2005, c. 2, Pt. E, § 1 and 
affected by §§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 $5,000. 
Sec. F-2. 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 percent of that portion of the benefit base that exceeds 4% but does not 
exceed 8% of income plus 100% of that portion of the benefit base that exceeds 8% 
of income to a maximum payment of ~ 
$3,000. 
Sec. F -3. Application. This Part applies to applications for benefits filed on or 
after August 1, 2008. 
PART G 
Sec. G-l. 36 MRSA §1752, sub-§l-H is enacted to read: 
I-H. 
Amusement and recreational services. 
"Amusement and recreational 
services" means: 
A. All services provided by health clubs, fitness clubs, athletic clubs and personal 
fitness trainers and coaches, other than the sale of meals and the rental of living 
quarters; 
B. Admission to fairs, including state fairs, county fairs, agricultural fairs and book 
fairs; 
C. Admission to sporting events, including horse races; 
D. Admission to exhibition shows that are open to the general public, including 
flower and garden shows, animal shows, auto shows and watercraft shows; 
E. Admission to motion pictures, concerts, plays, musicals, ballets, operas, comedy 
shows, puppet shows, magic shows, carnivals, circuses and theatrical productions; 
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F. Admission to dance halls, amusement p:;rks, th.:me parks, miniature golf courses, 
snow parks and water parks; 
G. All services, including lessons, provided by flight centers, marinas. g,Qlf ~1)IlL,._i, 
driving ranges, shooting ranges, alpine ski areas, cross-country ski touring centers, 
ice skating rinks, roller skating rinks, dance halls and centers, bowling cellters, 
swimming pools, racetracks, billiard parlors, riding stables, whitewater rafting centers 
and recreational athletic facilities of any kind, other than the sale of meals and the 
rental of living quarters; 
H. Services provided by, and the charging of fees for admission to or membership in, 
commercial recreational membership organizations, including health and fitness 
clubs, golf clubs, tennis clubs and country clubs, whether payable by annual fee or 
otherwise; 
I. Admission to privately owned and operated museums, planetariums, historical 
sites, zoological parks, zoological gardens, wild animal parks, petting zoos, botanical 
gardens and aquariums; and 
J. Airplane, helicopter, balloon, dirigible, blimp, watercraft, railroad, bus and wagon 
rides for amusement or sightseeing purposes. 
Sec. G-2. 36 MRSA §1752, sub-§3-B, as amended by PL 1999, c. 698, § I and 
affected by §3, is further amended to read: 
3-B. Grocery staples. "Grocery staples" means food products ordinarily consumed 
for human nourishment. 
"Grocery staples" does not include spirituous, malt or vinous liquors; soft drinks, iced tea, 
sodas or beverages such as are ordinarily dispensed at bars or soda fountains or in 
connection with bars or soda fountains; medicines, tonics, vitamins and preparations in 
liquid, powdered, granular, tablet, capsule, lozenge or pill fonn, sold as dietary 
supplements or adjuncts, except when sold on the prescription of a physician; water, 
including mineral bottled and carbonated waters and ice; dietary substitutes; candy and 
confections; snack food; and prepared food. 
Sec. G-3. 36 MRSA §1752, sub-§8-C is enacted to read: 
8-C. Personal property services. "Personal property services" means the alteration, 
cleaning, installation, repair, rental, moving, restoration, storage, appraisal and 
maintenance of personal property, including motor vehicles, watercraft, snowmobiles, all-
terrain vehicles, appliances, bicycles, jewelry, cameras, timepieces, fireanns, musical 
instruments, electronic and electrical goods, clothing, footwear, leather goods, furniture, 
rugs and carpets. "Personal property services" includes, but is not limited to: 
A. The upholstering and reupholstering of furniture; 
B. Same-day courier and delivery services; 
C. The rental of moorings, slips and docks, but only for noncommercial watercraft; 
D. Dry cleaning, laundry and clothing storage services; 
E. Photograph restoration and photographic film development; 
F. Art restoration and conservation; and 
G. Picture framing. 
"Personal property services" does not include the rental of items subject to a tax under 
chapter 358 or the interstate moving of furniture and other household goods. 
Sec. G-4. 36 MRSA §1752, sub-§8-D is enacted to read: 
8-D. Personal services. "Personal services" means: 
A. All services provided by tanning salons, tattoo parlors, massage therapists and 
massage parlors; 
B. Ear and body piercing services; 
C. Dance instruction; 
D. Driving instruction; 
E. Escort, dating and social introduction services; 
F. Flower, balloon and singing telegram delivery services; 
G. Pet grooming and boarding services; 
H. Rental of storage lockers and other self-storage space; 
I. Laundry and diaper services; 
J. Catering services; and 
K. Home grocery delivery service and other home delivery services. 
Sec. G-5. 36 MRSA §1752, sub-§9-E is enacted to read: 
9-E. Real property services. "Real property services" means the following services 
when provided with regard to real property: 
A. Interior painting, wallpapering, decorating and designing; 
B. Property cleaning and organizing; 
C. Disinfection and pest extermination or control services; 
D. Locksmithing, alarm and security services; 
E. Swimming pool installation, repair, cleaning and maintenance; 
F. Waste management and remediation services; 
G. Rug and carpet installation, cleaning and repair; 
H. Floor maintenance, including sanding, polishing, waxing and coating; 
I. Chimney sweeping and cleaning services; and 
J. Hot tub installation, repair, cleaning and maintenance. 
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Sec. G-6. 36 MRSA §1752, sub-§l1, ~rA, as amended by PL 2005, c. 218, §14, 
is further amended to read: 
A. "Retail sale" includes.; conditional sales, installment lease sales and ar. _ ",;T 
transfer of tangible personal property when the title is retained as security for the 
payment of the purchase price and is intended to be transferred later. 
(1) Conditional sales, installment lease sales and any other transfer of tangible 
personal propert)' ,,,,,hen the title is retained as sec\:lrity for the payment of the 
purchase price and is intended to be transferred later; and 
(2) Sale of prod\:lcts for internal human consumption to a person for resale 
through vending machines when sold to a person more than 50% of ,<,those gross 
receipts from the retail sale of tangible personal propert)' are derived from sales 
through vending machines. The tax must be paid by the retailer to the State. 
Sec. G-7. 36 MRSA §1752, sub-§l1,~, as amended by PL 2005, c. 218, §15, 
is further amended to read: 
B. "Retail sale" does not include: 
( I) Any casual sale; 
(2) Any sale by a personal representative in the settlement of an estate, unless the 
sale is made through a retailer, or unless the sale is made in the continuation or 
operation of a business; 
(3) The sale, to a person engaged in the business of renting automobiles, of 
automobiles, integral parts of automobiles or accessories to automobiles, for 
rental or for use in an automobile rented on a short-term basis; 
(4) The sale, to a person engaged in the business of renting video media and 
video equipment, of video media 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 associated equipment for rental or lease to subscribers in 
conjunction with a sale of extended cable or extended satellite television or radio 
servIces; or 
(7) The sale, to a person engaged in the business 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, section 
11-105. 
Sec. G-S. 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 installing or applying or 
repairing the property sold, if separately charged or stated unless the labor or 
services are taxable services as defined in subsection 17-B; 
(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 cost of transportation from the retailer's place of business or other point 
from which shipment is made directly to the purchaser, provided that if those 
charges are separately stated and the transportation occurs by means of common 
carrier, contract 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; 
(l0) 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. G-9. 36 MRSA §1752, sub-§14-F is enacted to read: 
14-F. 
Snack food. 
"Snack food" means any item that is ordinarily sold for 
consumption without further preparation or that requires no preparation other than 
combining the item with a liquid; that may be stored unopened without refrigeration, 
except that ice cream, ice milk, frozen yogurt and sherbert are snack foods; and that is not 
generally considered a major component of a well-balanced meal. "Snack food" includes, 
but is not limited to, corn chips, potato chips, processed fruit snacks, fruit rolls, fruit bars, 
popped popcorn, pork rinds, pretzels, cheese sticks, cheese puffs, granola bars, breakfast 
bars, bread sticks, roasted nuts, doughnuts, cookies, crackers, pastries, toaster pastries, 
croissants, cakes, pies, ice cream cones, marshmallows, marshmallow creme, soft drinks, 
ice cream sauces, ready-to-eat puddings, beef jerky, meat bars and dips. 
Sec. G-IO. 36 MRSA §1752, sub-§14-G is enacted to read: 
14-G. Soft drinks. "Soft drinks" means nonalcoholic beverages that contain natural 
or artificial sweeteners. "Soft drinks" does not include beverages that contain milk or 
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milk products; soy, rice or similar milk substitutes; or more than 50% vegetable or fruit 
juice by volume. 
Sec. G-l1. 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 an automobile; 
D. Sale of prepaid calling service; 
E. Amusement and recreational services; 
F. Personal services; 
G. Personal property services; 
H. Real property services; 
I. Lawn and landscaping services, including tree trimming and removal; 
J. Taxi and limousine services; and 
K. Safe deposit box rental. 
Sec. G-12. 36 MRSA §1760, sub-§4, as amended by PL 1967, c. 89, is repealed. 
Sec. G-13. 36 MRS A §1760, sub-§12-A, as amended by PL 1995, c. 634, § 1 
and affected by §2, is repealed. 
Sec. G-14. 36 MRSA §1760, sub-§20, as amended by PL 1991, c. 546, §20, is 
further amended to read: 
20. Continuous residence; refunds and credits. Rental charged to any person who 
resides continuously for U 100 days at anyone hotel, rooming house, or tourist or trailer 
camp if: 
A. The person does not maintain a primary residence at some other location; or 
B. The person is residing away from that person's primary residence in connection 
with employment or education. 
Tax paid by such person to the retailer under section 1812 during the initial 28 da)' 
100-day period must be refunded by the retailer. Such tax reported and paid to the State 
by the retailer may be taken as a credit by the retailer on the report filed by the retailer 
covering the month in which refund was made to such tenant. 
This sl::lBsestiofl applies to all refltals of aA)' hotel, roomiflg hOl::lse or tOl::lrist or trailer ealflp 
for OSSl::IpaAS)' 01'1 or after JI::II)' 1, 1991 regardless of the date 01'1 whish pa)'lfleflt for the 
reAtal is made. 
Sec. G-IS. 36 MRSA §1760, sub-§34, as amended by PL 2005, c. 218, §23, is 
repealed. 
Sec. G-16. 36 MRSA §1760, sub-§S2, as enacted by PL 1985, c. 737, Pt. A, §96, 
is repealed. 
Sec. G-17. 36 MRSA§1812, sub-§l, ~ 
is enacted to read: 
E. If the tax rate is 8%: 
Amount of Sale Price 
$0.01 to $0.06, inclusive 
.07 to .18, inclusive 
.19 to .30, inclusive 
.31 to .43, inclusive 
.44 to .55, inclusive 
.56 to .68, inclusive 
.69 to .80, inclusive 
.81 to .93, inclusive 
.94 to 1.00, inclusive 
Amount of Tax 
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Sec. G-18. 36 MRS A §1812, sub-§l, ~ 
is enacted to read: 
F. If the tax rate is 15%: 
Amount of Sale Price 
$0.01 to $0.03, inclusive 
.04 to .09, inclusive 
.10 to .16, inclusive 
.17 to .22, inclusive 
.23 to .29, inclusive 
.30 to .36, inclusive 
.37 to .42, inclusive 
.43 to .49, inclusive 
.50 to .56, inclusive 
.57 to .62, inclusive 
.63 to .69, inclusive. 
.70 to .76, inclusive 
.77 to .82, inclusive 
.83 to .89, inclusive 
.90 to .96, inclusive 
.97 to 1.00, inclusive 
Amount of Tax 
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Sec. G-19. 36 MRSA §2015, sub-§2, ~, as enacted by PL 1993, c. 701, §8 and 
affected by § I 0, is amended to read: 
B. Three tenths Two-tenths of the amount of tax paid to the State by the taxpayer 
resulting from the tax on the rental of automobiles for a period of less than one year 
during the most recently completed period from July 1 st to June 30th. 
Sec. G-20. 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. Cable and satellite television or radio services. "Extended oable Cable and 
satellite television or radio services" means all cable and satellite television or radio 
service that is in addition to the minimHm servioe that oan be pHfOhased from a oable or 
satellite television sHpplier, including the use of associated equipment for which a charge 
is made. It does not include installation of the associated equipment for which a separate 
charge is levied. 
Sec. G-21. 36 MRSA §2551, sub-§20, as enacted by PL 2003, c. 673, Pt. Y, §25 
and affected by §29, is amended to read: 
20. 
Telecommunications services. 
"Telecommunications services" means all 
telecommunications services as described in this subsection. 
A. "Telecommunications services" includes: 
(I) The provision of 2-way interactive communications through the use of 
telecommunications equipment, 
exclusive of mobile telecommunications 
services; aHd 
(2) 
Two-way interactive mobile telecommunications services provided by a 
home service provider to a customer whose place of primary use is within this 
State, to the extent those services are associated with transmissions that originate 
and terminate within this State or within any other state. For purposes of this 
paragraph, the term "state" includes the District of Columbia and any territory or 
possession of the United States~; and 
(3) Directory advertising services. 
B. "Telecommunications services" does not include: 
(1) 
Except as otherwise provided by this subsection, servIce originating or 
terminating outside this State; 
(2) Access services; 
(3) Direotor)' advertising sep,'ioes; 
(4) 
The sale of unbundled network elements for use in the provision of 
telecommunications services; 
(5) The lease of telecommunications equipment; 
(6) Prepaid calling service; or 
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(7) Mobile telecommunications services provided by a home service provider to 
a customer whose place of primary use is not within this State. 
Sec. G-22. 36 MRS A §2552, suh-§l, ~A, as amended by PL 2005, c. 12, Pt. 
TTT, §3 and affected by §4, is further amended to read: 
A. ExteAded sable Cable and satellite television or radio services; 
Sec. G-23. Application. That section of this Part that amends the Maine Revised 
Statutes, Title 36, section 1760, subsection 20 applies to all rentals of any hotel, rooming 
house or tourist or trailer camp for occupancy on or after January I, 2008, regardless of 
the date on which payment for the rental is made. 
Sec. G-24. Effective date. This Part takes effect January I, 2008. 
II 
PART H 
Sec. H-1. 
MRSA §13090-K, suh-§2, as enacted by PL 2001, c. 439, Pt. 
UUUU, § I, 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 1% 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 I 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 1% 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. H-2. 36 MRSA §1811, first~, as amended by PL 2001, c. 439, Pt. TTTT, 
§2 and affected by §3, is further amended to read: 
A tax is imposed on the value of all tangible personal property and taxable services 
sold at retail in this State. The rate of tax is 1% 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; 1% 8% on the value of rental of living quarters in any hotel, rooming 
house or tourist or trailer camp; -W% 15% on the value of rental for a period of less than 
one year of an automobile; 1% 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. H-3. Effective date. This Part takes effect January 1,2008. 
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PART 1 
Sec. 1-1. 28-A MRSA §1652, sub-§l, as repealed and replaced by PL 1987, c. 
342, § 116, is amended to read: 
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 ~ 
60¢ per gallon on all malt liquor sold in 
the State. 
Sec. 1-2. 28-A MRSA §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 ~ 
$I per gaIl on on all wine other than and 
sparkling wine manufactured in or imported into the State, $1 per gallon on all sparkling 
vAne manufactured in or imported into the State and ~ 
$I per gallon on all hard cider 
manufactured in or imported into the State. 
Sec. 1-3. Effective date. This Part takes effect January 1,2008. 
PARTJ 
Sec. J-l. 36 MRSA c. 723 is enacted to read: 
CHAPTER 723 
SOFT DRINK AND SYRUP TAX 
§4951. Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. 
Bottle. 
"Bottle" means any closed or sealed glass, metal, paper or plastic 
container or any other type of container regardless of the size or shape of the container. 
2. Bottled soft drink. "Bottled soft drink" means any ready-to-consume soft drink 
contained in a bottle'. 
3. Distributor, manufacturer or wholesale dealer. "Distributor, manufacturer or 
wholesale dealer" means any person who receives, stores, manufactures, bottles or sells 
bottled soft drinks, syrup, simple syrup or powder or base products for mixing, 
compounding or making soft drinks for sale to retailers or other manufacturers, wholesale 
dealers or distributors for resale purposes. 
4. Milk. "Milk" means natural liquid milk regardless of animal source or butterfat 
content; natural milk concentrate, whether or not reconstituted, regardless of animal 
source or butterfat content; or dehydrated natural milk, whether or not reconstituted. 
5. Natural fruit juice. "Natural fruit juice" means the original liquid resulting from 
the pressing of fruit, the liquid resulting from the reconstitution of fruit juice concentrate 
or the liquid resulting from the restoration of water to dehydrated fruit juice. 
6. Natural vegetable juice. "Natural vegetable juice" means the original liquid 
resulting from the pressing of vegetables, the liquid resulting from the reconstitution of 
vegetable juice concentrate or the liquid resulting from the restoration of water to 
dehydrated vegetable juice. 
7. 
Nonalcoholic beverage. 
"Nonalcoholic beverage" means any beverage not 
subject to tax under Title 28-A, Part 4. 
8. Place of business. "Place of business" means any place where soft drinks, syrups, 
simple syrups or powder or base products are manufactured or any place where bottled 
soft drinks, syrup, simple syrup, powder or base product or any other item taxed under 
this chapter is received. 
9. Powder or base product. "Powder or base product" means a solid mixture of 
basic ingredients used in making, mixing or compounding soft drinks by mixing the 
powder or other base with water, ice, syrup, simple syrup, fruits, vegetables, fruit juice, 
vegetable juice or any other product suitable to make a soft drink. 
10. Retailer. "Retailer" means any person, other than a distributor, manufacturer or 
wholesale dealer, who receives, stores, mixes, compounds or manufactures any soft drink 
and sells or otherwise dispenses the soft drink to the ultimate consumer. 
11. Sale. "Sale" means the transfer of title or possession for a valuable consideration 
of tangible personal property regardless of the manner by which the transfer is 
accomplished. 
12. Simple syrup. "Simple syrup" means a mixture of sugar and water. 
13. Soft drink. "Soft drink" means any nonalcoholic beverage, whether naturally or 
artificially flavored, whether carbonated or noncarbonated, sold for human consumption, 
including, but not limited to, soda water, cola and other flavored drinks, any fruit or 
vegetable drink containing 10% or less of natural fruit juice or natural vegetable juice and 
all other drinks and beverages commonly referred to as soft drinks, but not including 
coffee or tea unless the coffee or tea is bottled as a liquid for sale. 
14. Syrup. "Syrup" means the liquid mixture of basic ingredients used in making, 
mixing or compounding soft drinks by mixing the syrup with water, simple syrup, ice, 
fruits, vegetables, fruit juice, vegetable juice or any other product suitable to make a soft 
drink. 
,. 
.. 
'" ... 
•. 
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§4952. Tax rate 
1!_. __ 1'll_x inm_osed. 
There is imposed a tax OIL~_~ri._Qi_'!!r.ili!!.19-'~_ .. .!DJ!mLf~!lm~r gr 
wholesale dealer to be calculated as follows: 
A. Four dollars per gallon of syrup or simple syrup sold or offered for sale in the 
State; 
B. Forty-two cents per gallon of bottled soft drinks sold or offered for sale in the 
State; and 
C. When a package or container of powder or base product is sold or offered for sale 
in the State, the tax on the sale of each package or container is equal to 42¢ for each 
gallon of soft drink that may be produced from each package or container by 
following the manufacturer's instructions. This tax applies when the powder or base 
product is sold to a retailer for sale to the ultimate consumer after the soft drink is 
produced by the retailer. 
2. Purchase from unlicensed seller. A retailer who purchases bottled soft drinks, 
syrup, simple syrup or powder or base product from an unlicensed distributor, 
manufacturer or wholesale dealer is liable for the tax imposed in subsection 1. 
§4953. Exemptions 
The following are exempt from the tax imposed by section 4952: 
1. Sales to Federal Government. Syrups, simple syrups, powder or base products 
or soft drinks sold to the Federal Government; 
2. Products exported from State. Syrups, simple syrups, powder or base products 
or soft drinks exported from the State by a distributor, manufacturer or wholesale dealer; 
3. Coffee or tea base. Any powder or base product used in preparing coffee or tea; 
4. Juice or vegetable concentrate. Any frozen, freeze-dried or other concentrate to 
which only water is added to produce a nonalcoholic beverage containing more than 10% 
natural fruit juice or natural vegetable juice; 
5. Fruit or vegetable juice. Any nonalcoholic beverage containing more than 10% 
natural fruit juice or natural vegetable juice; 
6. 
Sales to another distributor, manufacturer or wholesale dealer. 
Syrups, 
simple syrups, powder or base products or soft drinks sold by a distributor, manufacturer 
or wholesale dealer to a distributor, manufacturer or wholesale dealer who holds a license 
under section 4955 if the license number of the distributor, manufacturer or wholesale 
dealer to whom the syrups, simple syrups, powder or base products or soft drinks are sold 
is clearly shown on the invoice for the sale that is claimed to be exempt. This exemption 
does not apply to any sale to a retailer; 
Page J <1 - IBLROIWJ(Gl}-1 
7. Infant formula. Any prod Ui • .:t, whether sold in liquid or powder form, that is 
intended by its manufacturer for consumption by infants and that is commonly referred to 
as infant formula; 
8. Water. Water to which no flavoring, whether artificial or natural, has been added 
and that has not been artificially carbonated; 
9. 
Dietary aids. Any product, whether sold in liquid or powder form, that IS 
intended by its manufacturer for use as a dietary supplement or for weight reduction; 
10. 
Consumer mix. 
Any powder or base product that is intended by its 
manufacturer to be sold and used for the purpose of domestically mixing soft drinks by 
the ultimate consumer; and 
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11. Milk products. Any product containing milk or m'ilk products. 
§4954. Reports 
A distributor, manufacturer or wholesale dealer or any retailer subject to the tax 
imposed by this chapter shall file a monthly return with the assessor and pay the tax on or 
before the 15th day of the month following the month in which the sale or purchase was 
made. The return must be made on a form prescribed by the assessor. The return must 
contain any information the assessor requires for the proper administration of this 
chapter. When a retailer is also acting as a distributor, manufacturer or wholesale dealer, 
the duty to report and pay the tax imposed by this chapter arises when the property is 
transferred to a retail store for sale to the ultimate consumer, as reflected by the records of 
the taxpayer. 
§4955. Licenses 
1. Distributor, manufacturer or wholesale dealer. Any distributor, manufacturer 
or wholesale dealer who sells or otTers for sale to retailers within the State syrups, simple 
syrups, powder or base products or soft drinks shall obtain from the bureau a license for 
the privilege of conducting such business within the State. 
2. Retailer. Any retailer who purchases syrups, simple syrups, powder or base 
products or soft drinks from a distributor, manufacturer or wholesale dealer not licensed 
under subsection 1 shall obtain a license from the bureau for the privilege of conducting 
such business. 
3. Location; display. Any person required to obtain a license under this section 
shall obtain a license for each place of business owned or operated by that person. The 
license must be conspicuously displayed at the place of business for which it was issued. 
§4956. Penalties 
1. Failure to file, pay. A person required to file a return and pay tax under this 
chapter is subject to the same penalties as for failure to file and pay sales tax under Part 3. 
, 
I 
2. Failure to obtain license. A person required to obtain a license under section 
4955 who fails to do so is subject to the same penalties as for failure to register as a 
retailer under section 1754-B. 
§4957. Rules 
The assessor may adopt rules under the Maine Administrative Procedure Act to 
provide for the administration of this chapter. These rules may provide for a fee to cover 
the cost of issuing licenses required under section 4955. Rules adopted under this section 
are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. 
Sec. J-2. Effective date. This Part takes effect January I, 2008. 
PARTK 
II 
Sec. K-l. 36 MRSA §4641-A, sub-§l, as enacted by PL 2001, c. 559, Pt. I, §3 
and affected by § 15, is repealed. 
Sec. K-2. 36 MRSA §4641-A, sub-§l-A is enacted to read: 
I-A. Deeds. A tax is imposed on the grantor and the grantee with regard to each 
deed by which any real property in this State is transferred. The rate of tax that applies to 
each grantee and grantor of the real property is: 
A. For property valued at less than $100,000, $1 for each $1,000 or fractional part of 
$1,000 of the value of the property transferred; 
B. For property valued at $100,000 or more but less than $200,000, $2 for each 
$1,000 or fractional part of $1,000 of the value ofthe property transferred; 
C. For property valued at $200,000 or more but less than $300,000, $3 for each 
$1,000 or fractional part of $1,000 of the value of the property transferred; 
D. For property valued at $300,000 or more but less than $500,000, $4 for each 
$1,000 or fractional part of $1,000 of the value of the property transferred; 
E. For property valued at $500,000 or more but less than $750,000, $5 for each 
$1,000 or fractional part of $1 ,000 of the value of the property transferred; 
F. For property valued at $750,000 or more but less than $1,000,000, $6 for each 
$1,000 or fractional part of $1,000 of the value of the property transferred; and 
G. For property valued at $1,000,000 or more, $7 for each $1,000 or fractional part 
of$I,OOO of the value of the property transferred. 
Sec. K-3. 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 rates of tax on a transferor and a transferee are the same as specified under 
subsection I-A for a grantor and a grantee, respectively. 
Sec. K-4. 36 MRSA §4641-A, sub-§2,~, as enacted by PL 2001, c. 559, Pt. I, 
§3 and affected by § 15, is amended to read: 
I 
B. The tax is imposed 1/2 on the transferor and 112 on the transferee, but if the If a 
transfer or acquisition is not reported to the register of deeds in the county or counties 
in which the property is located and the tax is not paid within 30 days of the 
completion of the transfer or acquisition, the transferor and the transferee are jointly 
and severally liable for the fl:lll amount both payments under subsection 2, paragraph 
A. 
Sec. K-S. 36 MRSA §4641-B, suh-§4, as amended by PL 2005, c. 644, §4, is 
further amended to read: 
II 
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 + I-A and the 
amount of revenues derived from the tax imposed by section 4641-A, subsection 2. The 
Treasurer of State shall credit +f2. 65% of the revenues derived from the tax imposed by 
section 4641-A, subsection + I-A to the General Fund and shall monthly pay the 
remaining +f2. 35% 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 and in fiscal 
)'ear 2006 07, $7,687,067 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. 
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. 
SUMMARY 
This bill makes major changes to Maine's tax structure beginning January I, 2008. 
Part A increases the low-income tax credit under the income tax by increasing the 
threshold of taxable income below which no taxes are due from $2,000 to $4,000 for 
single individuals and married persons filing separately, $6,000 for persons filing as 
heads of households and $8,000 for persons filing married joint returns. 
Part B conforms the standard deduction under the income tax to the federal standard 
deduction beginning with the 2008 tax year, thereby eliminating the marriage penalty. 
Part C conforms the personal exemption under the income tax to the same amount as 
the federal personal exemption. 
Part D lowers the top income tax rate from 8.5% to 8.25% for the 2008 tax year. 
Part E increases state reimbursement for the homestead exemption to 100% of 
municipal property taxes lost as a result of the exemption beginning in 2008. 
I 
Part F increases the maximum benefit under the Maine Residents Property Tax 
program from $2,000 to $3,000 and increases to $5,000 the maximum amount of property 
tax that may be used to calculate benefits. 
Part G expands the tax base under the sales tax by repealing sales tax exemptions for 
packaging mate1ials, ships' stores, railroad track materials and certain short-term rentals 
and by extending the sales tax to amusements, personal services, personal property 
services, home care services, real property services, lawn and landscaping services, taxi, 
limousine and same day courier services, telephone directory advertising and safe deposit 
box rental. This Part also reinstitutes the sales tax on snack foods and extends the service 
provider tax to basic cable and satellite television and radio service and to consumer 
interstate telephone calls. 
Part H increases the sales tax on meals and lodging, liquor serviced at licensed 
establishments and prepared food from 7% to 8% and increases the sales tax on short-
term rentals of automobiles from 10% to 15%. 
Part I increases the excise tax on malt liquor from 25¢ per gallon to 60¢ per gallon, 
on wine from 30¢ per gallon to $1 per gallon and on hard cider from 25¢ per gallon to $1 
per gallon. 
Part J establishes a tax on the distribution, manufacture and wholesale of soft drinks 
and soft drink products. 
Part K changes the rate structure for the real estate transfer tax to provide that a 
transferor of the property must pay a transfer tax starting at $1 per $1,000 of value of the 
property for property valued at less than $100,000, increasing to $7 per $1,000 of value 
for real estate with a value exceeding $1,000,000. The revenue from the portion of the 
tax received to the State and attributable to transfers by deed tax is credited 65% to the 
General Fund and 35% to the Housing Opportunities for Maine Fund.