An Act To Allow a Local Option Sales Tax
Maine Legislature, Session 123, LD 0158
Committee: Taxation
Sponsors: HOGAN, EBERLE, PERRY, ADAMS, BLANCHARD, BLANCHETTE, BLISS, BRAUTIGAM, BRYANT, FAIRCLOTH, HARLOW, HASKELL, MAZUREK, PINGREE, SCHATZ

Legislative Document 
No. 158 
H.P.140 
House of Representatives, January 12, 2007 
An Act To Allow a Local Option Sales Tax 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative HOGAN of Old Orchard Beach. 
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11?7il~ 
MILLICENT M. MacFARLAND 
Clerk 
Cosponsored by Representative EBERLE of South Portland, Senator PERRY of Penobscot and 
Representatives: ADAMS of Portland, BLANCHARD of Old Town, BLANCHETTE of 
Bangor, BLISS of South Portland, BRAUTIGAM of Falmouth, BRYANT of Windham, 
FAIRCLOTH of Bangor, HARLOW of Portland, HASKELL of Portland, MAZUREK of 
Rockland, PINGREE of North Haven, SCHATZ of Blue Hill. 
Print~ on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRS A §1817 is enacted to read: 
§1817. Local option sales tax 
1. Municipalities authorized to adopt. If the legal voters of a municipality give 
their approval in a referendum vote pursuant to subsection 6, the legislative body of that 
municipality may impose a local option sales tax of up to 4% on the value of rental of 
living quarters in any hotel, rooming house or tourist or trailer camp and the value of 
prepared food. 
2. Notify State Tax Assessor. A municipality that imposes a local option sales tax 
under subsection 1 shall notify the State Tax Assessor at least 90 days before the tax is 
effective. 
3. Administered by State. Retailers in a municipality that has imposed a local 
option sales tax under subsection I shall transfer the revenue from that tax at the time of 
and in the manner provided for the transfer of state sales tax revenue. The tax is subject 
to the same interest, penalties and administrative actions as other taxes assessed under 
this Part. 
4. Transfer of revenue. Each month the State Tax Assessor shall identify the 
amount of revenue attributable to each municipality under this section, subtract the costs 
of administering this section and certify the net amount due each municipality to the 
Treasurer of State. The Treasurer of State shall make monthly payments to municipal 
treasurers of the net amounts certified by the State Tax Assessor under this subsection. 
Revenue collected pursuant to this section is not considered to be receipts from the taxes 
imposed under this Part for purposes of transfers to the Local Government Fund under 
Title 30-A, section 568l. 
5. Use of local option sales tax revenue. The revenue raised by the adoption of a 
local option sales tax under this section must be held by the municipality in a special 
revenue account established for that purpose. 
Revenue from that account may be 
expended only if specifically authorized by an appropriation of the local legislative body 
to reduce the property tax commitment. 
6. Referendum. The question of whether to impose a local option sales tax under 
this section must be submitted to the legal voters of a municipality that seeks to impose 
the local option sales tax. 
The petition process and the voting at elections held in towns and plantations must be 
held and conducted in accordance with Title 30-A, sections 2528, 2529 and 2532 even if 
the municipality has not accepted the provisions of section 2528. The voting at elections 
held in municipalities must be held and conducted in accordance with Title 21-A. The 
municipal clerk shall make a return of the results, certify the results and send them to the 
Secretary of State. The Secretary of State shall forward the results to the State Tax 
Assessor. The municipal clerk shall prepare the required ballots, which must contain 
substantially the following question: 
"Do you favor a local option sales tax of up to 4% ?" 
The voters shall indicate by a cross or check mark placed against the word "Yes" or "No" 
their opinion of the same. 
The local option sales tax may be discontinued in the same manner. 
S 
7. Effective date of tax. The tax authorized by this section takes effect 120 days 
after the municipal referendum vote under subsection 6 if it is accepted by a majority of 
the local voters voting at the election and the total number of votes cast for and against 
the acceptance of the local option sales tax equals or exceeds 20% of the total number of 
votes cast in that municipality in the most recent gubernatorial election. 
SUMMARY 
This bill allows a municipality to adopt a local option sales tax of up to 4% on food 
and lodging for property tax relief.