An Act To Cut Taxes on Maine Residents by over $140,000,000
Maine Legislature, Session 123, LD 1925
House Amendment HA_J_H632 (House)
Amends: 36 MRSA §5, 36 MRSA §5218-C, 36 MRSA §1752, 36 MRSA §2551, 36 MRSA §4641

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HOUSE AMENDMENT "J "to H.P. 1362, L.D. 1925, Bill, "An Act To Cut Taxes 
on Maine Residents by over $140,000,000" 
Amend the bill by striking out the title and substituting the following: 
'An Act To Reduce Taxes for Maine Residents' 
Amend the bill in Part A by striking out all of section 1 and inserting the following: 
'Sec. A-I. 36 MRSA §5IU, 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repealed and the following enacted in its place: 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 following rates: 
For'tax years beginning in: 
2008 and 2009 
2010 and 2011 
2012 and 2013 
2014 and 2015 
2016 and after 
The rate is: 
6.5% 
6.4% 
6.35% 
6.3% 
6.25% 
Amend the bill in Part A in section 22 in §5218-A in subsection 2 in paragraph A in 
the first line (page 8, line 9 in L.D.) by striking out the following: "$750" and inserting 
the following: '$800' 
Amend the bill in Part A in section 22 in §5218-A in subsection 2 in paragraph B in 
the 2nd line (page 8, line 11 in L.D.) by striking out the following: 
"llJ.QQ" and 
1 
inserting the following: '$1,200' 
Amend the bill in Part A in section 22 in §5218-A in subsection 2 in paragraph C in 
the 2nd line (page 8, line 13 in L.D.) by striking out the following: 
"$1,450" and 
inserting the following: '$1,600' 
Page J- 123LR2657(28)-1 
HOUSE AMENDMENT 
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HOUSE AMENDMENT 'U "to H.P. 1362, L.D. 1925 
Amend the bill in Part A in section 22 in §5218-A in subsection 3 in the first line 
(page 8, line 14 in L.D.) by striking out the following: 
"llJ2" and inserting the 
following: '$150' 
Amend the bill in Part A in section 22 in §5218-A in subsection 4 in paragraph A in 
the first line (page 8, line 19 in L.D.) by striking out the following: 
"$30,000" and 
inserting the following: '$45,000' 
Amend the bill in Part A in section 22 in §5218-A in subsection 4 in paragraph B in 
the last line (page 8, line 21 in L.D.) by striking out the following: 
"$45,000" and 
inserting the following: '$67,500' 
Amend the bill in Part A in section 22 in §5218-A in subsection 4 in paragraph C in 
the 2nd line (page 8, line 23 in L.D.) by striking out the following: 
"$67,500" and 
inserting the following: '$90,000' 
Amend the bill in Part A in section 22 in §S218-A in subsection 6 in the first line 
(page 8, line 27 in L.D.) by striking out the following: "The" and inserting the following: 
'Beginning in 2016, the' 
Amend the bill in Part A in section 23 in §5218-B by inserting after subsection 2 the 
following: 
'3. Additional credit. The base alternate household credit is increased by $ISO for 
each person for whom the individual is entitled to claim an exemption as a dependent 
under the Code.' 
Amend the bill in Part A in section 23 in §S218-B in subsection 3 in paragraph B in 
subparagraph (I) in the 2nd line (page 9, line 27 in L.D.) by striking out the following: 
"$1,300" and inserting the following: '$I,7S0' 
Amend the bill in Part A in section 23 in § 5218-B in subsection 3 in paragraph B in 
subparagraph (2) in the first line (page 9, line 28 in L.D.) by striking out the following: 
"$2,000" and inserting the following: '$2,625' 
Amend the bill in Part A in section 23 in §5218-B in subsection 3 in paragraph B in 
subparagraph (3) in the first line (page 9, line 29 in L.D.) by striking out the following: 
"$3,000" and inserting the following: '$3,500' 
Amend the bill in Part A in section 23 in §5218-B by renumbering the subsections to 
read consecutively. 
Amend the bill in Part A by inserting after section 23 the following: 
'Sec. A-24. 36 MRSA §5218-C is enacted to read: 
§5218-C. Adjustment of household credit 
By September 15,2009, September IS, 2011, September 15.2013 and September 15, 
2015, the assessor shall adjust the amounts used in the calculation of the household credit 
under sections 5218-A and 5218-B to maintain the same levels of distribution of net tax 
liability as estimated for tax year 2008.' 
HOUSE AMENDMENT 
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HOUSE AMENDMENT "V " to H.P. 1362, L.D. 1925 
Amend the bill in Part A in section 32 in the first paragraph in the 7th line (page 11, 
line 21 in L.D.) by striking out the following: "subsection 3," and inserting the following: 
'subsection 4,' 
Amend the bill in Part A in section 32 in the first paragraph in the 10th line (page 11, 
line 24 in L.D.) by striking out the following: "subsection 3," and inserting the following: 
'subsection 4,' 
Amend the bill by striking out all of Part B. 
Amend the bill in Part C by inserting after section 14 the following: 
'Sec. C-lS. Application. 
Except as otherwise provided, this Part applies to 
application periods for the Property Tax and Rent Refund Program beginning on or after 
August I, 2008.' 
Amend the bill in Part E in section 4 by striking out all of subsection I-I (page 20, 
lines 23 to 41 in L.D.) and inserting the following: 
'I-I. 
Amusement, entertainment and recreation services. 
"Amusement, 
entertainment and recreation services" means the following services, except those 
services provided by a governmental entity or an incorporated nonprofit organization: 
admission to entertainment venues and performances, including theaters, movies, 
lectures, concerts, amusement parks, water parks, fairgrounds except for licensed 
agricultural 
fairs, 
race tracks, 
carnivals, circuses, 
sports activities, 
stadiums, 
amphitheaters, museums, planetariums, animal parks, petting zoos, aquariums, historical 
sites and convention centers; fees charged for participation in or entry to golf courses, 
miniature golf courses, 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; and proceeds from arcade games.' 
Amend the bill in Part E by striking out all of section 6 and inserting the following: 
'Sec. E-6. 36 MRSA §1752, sub-§2-D is enacted to read: 
2-D. Fabrication facility. "Fabrication facility" means a site consisting of at least 
acres at which the primary business is the performance of fabrication services and any 
activities associated with or in support of fabrication services. 
Sec. E-7. 36 MRSA §1752, sub-§2-E is enacted to read: 
HOUSE AMENDMENT 
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HOUSE AMENDMENT 'Q "to H.P. 1362, L.D. 1925 
2-E. Fabrication services. "Fabrication services" means the production of tangible 
personal property for a consideration for a person who furnishes, either directly or 
indirectly, the materials used in that production.' 
Amend the bill in Part E in section 8 by striking out all of subsection 4-A (page 21, 
lines 41 and 42 and page 22, lines 1 to 6 in L.D.) and inserting the following: 
'4-A. 
Installation, repair or maintenance services. 
"Installation, repair or 
maintenance services" means all services involved in the installation, repair or 
maintenance of jewelry, cameras, guns, musical instruments, electronic and mechanical 
equipment, lawn and garden equipment computer hardware 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 tangible personal property used or held for use at 
or located at a manufacturing facility or fabrication facility, other than tangible personal 
property used in administrative support operations, or services performed on aircraft 
including refurbishing of aircraft.' 
Amend the bill in Part E in section lOin subsection 8-A in paragraph B in 
subparagraph (7) in the last line (page 23, line 11 in L.D.) by striking out the following: 
"and" 
Amend the bill in Part E in section lOin subsection 8-A in paragraph B in 
subparagraph (8) in the last line (page 23, line 12 in L.D.) by striking out the following: 
"dips." and inserting the following: 'dips; and' 
Amend the bill in Part E in section 10 in subsection 8-A in paragraph B by inserting 
after subparagraph (8) the following: 
'(9) Products for internal human consumption sold to a person for resale through 
vending machines when sold to a person more than 50% of whose gross receipts 
from the retail sale of tangible personal property are derived from sales through 
vending machines. The tax must be paid by the retailer to the State.' 
Amend the biII in Part E by striking out all of section II. 
Amend the bill in Part E in section 12 by striking out all of subsection 8-0 (page 23, 
lines 30 to 39 in L.O.) and inserting the following: 
'8-D. 
Personal property services. 
"Personal property services" means the 
following services related to personal property: 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 and 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; installation, repair or maintenance 
HOUSE AMENDMENT 
HOUSE AMENDMENT.o:. to H.P. 1362, L.D. 1925 
services; or services performed on tangible personal property used or held for use at or 
located at a manufacturing facility or fabrication facility, other than tangible personal 
property used in administrative support functions or services performed on aircraft 
including refurbishing of aircraft.' 
Amend the bill in Part E by striking out all of section 13. 
Amend the bill in Part E in section 14 in subsection II by striking out all of 
paragraph A (page 24, lines 23 to 30 in L.D.) and inserting the following: 
'A. "Retail sale" includes: 
(1) COHaitioHal sales, iftstallmeHt lease sales aHa afty other traftsfer of tafl:gible 
persoftal property wheft the title is retaiftea as security for the paymeRt of the 
purchase price and is intended to be transferred later; afl:d 
(2) Sale of products for internal human consumption to a person for resale 
through vending machines when sold to a person more than 50% of whose gross 
receipts from the retail sale of tangible personal property are derived from sales 
through vending machines. The tax must be paid by the retailer to the State.' 
Amend the bi II in Part E in section 18 in subsection 17 -B by striking out all of 
paragraph G (page 26, line 23 in L.D.) 
Amend the bill in Part E in section 18 in subsection 17 -B in paragraph H in the first 
line (page 26, line 24 in L.D.) by inserting after the following: "services;" the following: 
"and" 
Amend the bill in Part E in section 18 in subsection 17-B by striking out all of 
paragraph I (page 26, line 25 in L.D.) 
Amend the bill in Part E in section 18 in subsection 17-B by relettering the 
paragraphs to read alphabetically. 
Amend the bill in Part E by striking out all of sections 26, 27 and 29. 
Amend the bill in Part E in section 31 in subsection 90 in the first line (page 28, lines 
in L.D.) by inserting after the following: "The sale of" the following: 
'~' 
Amend the bill in Part E by inserting after section 45 the following: 
'Sec. E-46. 36 MRSA §2551, sub-§l-G is enacted to read: 
I-G. 800 service. "800 service" means a telecommunications service that allows a 
caller to dial a toll-free number without incurring a charge for the call. The service is 
typically marketed under the name "800." "855," "866," "877" and "888" toll-free calling 
and any subsequent numbers designated by the Federal Communications Commission.' 
Amend the bill in Part E by inserting after section 47 the following: 
'Sec. E-48. 36 MRSA §2551, sub-§5-A is enacted to read: 
HOUSE AMENDMENT 
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HOUSE AMENDMENT ,cr: to H.P.1362, L.D.1925 
5-A. 
International. 
"International" means a telecommunications service that 
originates or terminates in the United States and terminates or originates outside the 
United States, respectively. The term "United States" includes the District of Columbia 
or a United States territory or possession. 
Sec. E-49. 36 MRSA §2551, sub-§5-B is enacted to read: 
5-B. Interstate. "Interstate" means a telecommunications service that originates in 
one United States state, or a United States territory or possession, and terminates in a 
different United States state or United States territory or possession.' 
Amend the bill in Part E in section 54 in subsection 1 by striking out all of paragraph 
A (page 33, line 30 in L.D.) and inserting the following: 
'A. Extended cable and satellite television services. This paragraph is repealed 
October 1, 2007;' 
Amend the bill in Part E in section 54 in subsection 1 by inserting after paragraph A 
the following: 
'A-I. Extended cable and satellite television or radio services. This paragraph takes 
effect October 1, 2007;' 
Amend the bill in Part E in section 56 in subsection 31 in the last line (page 34, line 
in L.D.) by striking out the following: "and" 
Amend the bill in Part E in section 57 in subsection 32 in the first line (page 34, line 
in L.D.) by striking out the following: "service." and inserting the following: 'service; 
and' 
Amend the bill in Part E by inserting after section 57 the following: 
'Sec. E-58. 36 MRS A §2557, sub-§33 is enacted to read: 
33. Certain services sold to a business. Sales of the following services to a 
commercial business: 
A. Interstate, international or 800 service; 
B. Directory advertising; or 
C. Ancillary services. ' 
Amend the bill in Part E by striking out all of section 59 and inserting the following: 
'Sec. E-59. Monthly reports. The State Tax Assessor shall provide monthly 
reports to the Joint Standing Committee on Taxation through April I, 2008 regarding the 
State's activities in implementing the provisions of that Part of this Act that broadens the 
sales tax base and increases the sales tax on prepared meals, lodging and rentals of 
automobiles for less than one year. 
The report must include a plan for providing 
information to taxpayers and the public about new sales and use tax obligations under that 
Part, progress reports on implementation of the plan and copies of taxpayer materials and 
HOUSE AMENDMENT 
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HOUSE AMENDMENT 0-to H.P. 1362, L.D. 1925 
infonnational materials that are proposed for issuance by the State Tax Assessor. The 
State Tax Assessor shall infonn the committee about implementation issues and may seek 
the committee's advice on implementation. The committee may submit legislation to the 
this Act that broadens the sales tax base and increases the sales tax on prepared meals, 
lodging and rentals of automobiles for less than one year. 
Sec. E-60. Application date. Those portions of this Part that affect the taxation 
of leases and rentals of tangible personal property apply to leases entered into, extended 
or renewed on or after April 1,2008. 
Sec. E-61. 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 
2007-08 
$0 
$0 
2008-09 
$1,835,868 
$1,835,868 
Sec. E-62. Effective date. This Part takes effect April 1, 2008, except that: 
1. Those sections of this Part that amend the Maine Revised Statutes, Title 5, section 
13090-K, subsection 2; Title 36, section 1752, subsection 3-8; Title 36, section 1752, 
subsection 8-A; Title 36, section 1760, subsection 6, paragraph D; Title 36, section 1760, 
subsection 6, paragraph E; Title 36, section 1760-C; Title 36, section 1811, first 
paragraph; Title 36, section 1812, subsection 2; and Title 36, section 2551, subsection 2; 
that enact TitJe 36, section 1752, subsection 1-J; Title 36, section 1752, subsection 14-G; 
and Title 36, section 1760, subsection 6, paragraph F; 
that repeal and replace Title 36, 
section 1812, subsection 1; and that repeal Title 36, section 1811, 3rd paragraph take 
effect October 1,2007; and 
2. That section of this Part that requires monthly reports by the State Tax Assessor 
takes effect 90 days following adjournment of the First Regular Session of the 123rd 
Legislature. ' 
Amend the bill in Part F by striking out all of section 3 (page 35, lines 18 to 29 in 
L.D.) and inserting the following: 
'Sec. F-3. 36 MRS A §4641-A, sub-§l-A is enacted to read: 
HOUSE AMENDMENT 
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HOUSE AMENDMENT V "to H.P. 1362, L.D. 1925 
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 1I2 on the 
grantee. 
A. Except as provided in paragraph S, the tax rate is I % of the value of the real 
property; or 
B. On residential real property with a value exceeding $1,000,000, the rate is 1.5%. 
Sec. F-4. 36 MRSA §4641, sub-§l-B is enacted to read: 
I-B. Primary residence credit. A credit of $1,000 is allowed to the grantee of 
residential property 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.' 
Amend the bill in Part G by inserting after section 3 the following: 
'Sec. G-4. Effective date. This Part takes effect October 1,2007.' 
Amend the bill by striking out all of Parts H and I. 
Amend the bill by relettering or renumbering any nonconsecutive Part letter or 
section number to read consecutively. 
SUMMARY 
This amendment lowers the flat rate of income tax to 6.25% over 9 years, beginning 
in January 1, 2008 with a flat rate of 6.5% and decreasing it every other year for 8 years 
until it reaches 6.25% beginning in January 1, 2016. 
In order to maintain the 
progressivity of the tax decrease, the State Tax Assessor is required to adjust the 
household credit prior to the next scheduled income tax rate decrease. Indexing of the 
household credit is delayed until 2016, after the income tax rate reaches 6.25%. 
The amendment provides for an additional credit of $150 for each dependent when 
using alternate calculation of the household credit. The amendment also eliminates the 
changes proposed in the bilI to the homestead property tax deduction. 
The amendment eliminates the proposed expansion of the sales tax to personal care 
services and real property services and limits the application of the expansion to other 
specific service items with the primary intention of avoiding a negative impact on 
business vitality. The amendment includes the wholesale sale of certain vending machine 
items under the definition of "prepared food." The amendment eliminates the expansion 
of the sales tax to certain publications, admission fees paid to licensed agricultural fairs 
and certain sales related to funeral services and delays the effective date of the expansion 
of the sales tax to new services until April 1,2008. 
The amendment changes the method of calculating real estate transfer tax to provide 
a flat rate of I % of value, except for residential real property with a value exceeding 
$1,000,000 for which the rate is 1.5% of value. The amendment provides a credit for the 
first $1,000 of tax to the grantee of a deed to residential property that is intended to be 
used as a permanent residence. 
HOUSE AMENDMENT 
HOUSE AMENDMENT;r:.to H.P. 1362, L.D. 1925 
The amendment deletes provisions of the bill setting aside funds for distributions to 
municipalities. 
FISCAL NOTE REQUIRED 
SPONSOREDBY: ________________________ _ 
(Representative WATSON) 
TOWN: Bath 
HOUSE AMENDMENT 
Revised: 06/21/07 
~c=. 
LD 1925 
LR 2657(28) 
An Act To Cut Taxes on Maine Residents by over $140,000,000 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
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Fiscal Note for House Amendment ,,0 " 
Sponsor: Rep. Watson of Bath 
Fiscal Note Required: Yes 
Fiscal Note 
2007-08 
2008-09 
Projections 
2009-10 
Projections 
2010-11 
$64,853 
($1,798,455) 
($12,293,506) 
($12,322,243) 
$0 
($31,641,000) 
($31,641,000) 
($31,641,0 
($64,853) 
($29,842,545) 
($19,347,494) 
($19,318,757) 
$77,496 
($574,661) 
($2,070,594) 
($2,379,961) 
This amendment increases the General Fund cost of the bill by $64,853 in fiscal year 2007-08 and decreases the cost 
ofthe bill by $1,798,455 in fiscal year 2008-09. 
LR2657(28) - Fiscal Note - Page I of I