An Act To Provide Property Tax and Income Tax Relief
Maine Legislature, Session 123, LD 1833
Committee: Taxation
Sponsors: HOTHAM, NASS, CHASE, PIOTTI, STRIMLING
Amends: 36 MRSA §683, 36 MRSA §6201, 36 MRSA §5219-S, 36 MRSA §5126, 36 MRSA §5219-N, 36 MRSA §5122, 36 MRSA §5124-A, 36 MRSA §5125, 36 MRSA §5203-C, 36 MRSA §5216-C, 36 MRSA §5275, 28-A MRSA §1652, 36 MRSA §5200, 36 MRSA §1811, 30-A MRSA §5681, 36 MRSA §1752, 36 MRSA §1760, 36 MRSA §2551, 36 MRSA §2552, 36 MRSA §2557, 36 MRSA §2559

Legislative Document 
No. 1833 
H.P.1280 
House of Representatives, April 5, 2007 
An Act To Provide Property Tax and Income Tax Relief 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative HOTHAM of Dixfield. 
Cosponsored by Senator NASS of York and 
77l~/J?~ 
Mll..LICENT M. MacFARLAND 
Clerk 
Representatives: CHASE of Wells, PIOTTI of Unity, Senator: STRIMLING of Cumberland. 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 36 MRSA §683, sub-§l, as repealed and replaced by PL 2005, c. 2, Pt.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 $50,000 of the homestead ofa permanent resident of this State who has owned a 
homestead in this State for the preceding 12 months is exempt from taxation. 
In 
determining 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. If the title to 
the homestead is held by the applicant jointly or in common with others, the exemption 
may not exceed $13,000 $50,000 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. A-2. Application. This Part applies to property taxes based on the status of 
property on or after April 1, 2008. 
PARTB 
Sec. B-1. 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 ~ 
$2,400 for single-
member households and $4,00(:) $3,400 for households with 2 or more members. 
Sec. B-2. 36 MRS A §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 ~ 
6% of income plus 100% of that portion of the benefit base that exceeds 
~ 
6% of income to a maximum payment of ~ 
$2,500. 
Sec. B-3. Application. This Part applies to applications for benefits made on or 
after August 1, 2008. 
PART C 
Sec. C-l. 36 MRSA §5219-S, as amended by PL 2003, c. 20, Pt. GG, § 1, IS 
further amended to read: 
§5219-S. Earned income credit 
A taxpayer is allowed a refundable credit against the taxes otherwise due under this 
Part equal to ~ 
25% of the federal earned income credit for the same taxable year, 
except that for tax years beginning in 2003, 2004 and 2005, the applicable percentage is 
4.92% instead of 5%. The credit may not reduce the state income tax to less than ~ero. 
Sec. C-2. Application. This Part applies to tax years beginning on or after 
January I, 2008. 
PARTD 
Sec. D-l. 36 MRSA §5126, first ~, as amended by PL 2001, c. 583, §16, is 
further amended to read: 
1 
For income tax years beginning on or after January I, 1998 but before January I, 
1999, a resident individual is allowed $2,400 for each exemption that the indiyidual 
properly claims for the taxable year for federal income tax purposes, unless the taxpayer 
is claimed as a dependent on another return. For income tax years beginning on or after 
January 1, 1999 but before JanuaF)' 1, 2000, a resident individtlal is allowed $2,750 for 
each exemption that the individual properly claims fur the taxable year for federal iBcome 
tax purposes, unless the taxpayer is claimed as a dependent on another return. 
For 
income tax years beginning on or after January 1, 2000 but before January 1, 2007, a 
resident individual is allowed $2,850 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, 2007. a 
resident individual is allowed the same amount allowed under Section 151 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. 
Sec. D-2. Application. This Part applies to tax years beginning on or after 
January 1, 2008. 
PART E 
Sec. E-l. 36 MRSA §5219-N, sub-§l, as amended by PL 2003, c. 390, §48, is 
further amended to read: 
1. 
Generally. Except as provided in subsection 2, an individual whose Maine 
taxable income determined as if the individual were a resident individual for the entire 
year is $2,000 $10,000 or less 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. 
Sec. E-2. Application. This Part applies to tax years beginning on or after January 
1,2008. 
PARTF 
Sec. F-l. 36 MRSA §Sl11, sub-§l-B, as enacted by PL 1999, c. 731, Pt. T, §3, 
is amended to read: 
I-B. Single individuals and married persons filing separate returns; tax years 
beginning 2002 to 2007. For tax years beginning OR or after JaRuary 1, in 2002 to 2007, 
for single individuals and married persons filing separate returns: 
If Maine Ta>Hlble taxable income is: 
Less than $4,200 
At least $4,200 but less than $8,350 
At least $8,350 but less than $16,700 
$16,700 or more 
The tax is: 
2% of the Maine taxable income 
$84 plus 4.5% of the excess over $4,200 
$271 plus 7% of the excess over $8,350 
$856 plus 8.5% of the excess over 
$16,700 
Sec. F-2. 36 MRSA §Sl11, sub-§l-C is enacted to read: 
I-C. Single individuals and married persons filing separate returns; tax years 
beginning after 2007. For tax years beginning on or after January 1, 2008, for single 
individuals and married persons filing separate returns: 
If Maine taxable income is: 
The tax is: 
Less than $5,000 
% of the Maine taxable income 
At least $5,000 but less than $10,000 
$50 plus 2% of the excess over $5,000 
At least $10,000 but less than $22,500 
$150 plus 5% of the excess over $10,000 
$22,500 or more 
$775 plus 6.99% of the excess over 
$22,500 
Sec. F-3. 36 MRS A §Sl11, sub-§2-B, as enacted by PL 1999, c. 731, Pt. T, §5, 
is amended to read: 
2-B. Heads of households; tax years beginning 2002 to 2007. For tax years 
beginning OR or after JaRl:laf)' 1, in 2002 to 2007, for unmarried individuals or legally 
separated individuals who qualify as heads of households: 
If Maine Taxable taxable income is: 
Less than $6,300 
At least $6,300 but less than $12,500 
At least $12,500 but less than $25,050 
$25,050 or more 
The tax is: 
2% of the Maine taxable income 
$126 plus 4.5% ofthe excess over $6,300 
$405 plus 7% of the excess over $12,500 
$1,284 plus 8.5% of the excess over 
$25,050 
Sec. F-4. 36 MRSA §S111, sub-§2-C is enacted to read: 
I 
2-C. 
Heads of households; tax years beginning after 2007. 
For tax years 
beginning on or after January 1, 2008, for unmarried individuals or legally separated 
individuals who qualify as heads of households: 
If Maine taxable income is: 
Less than $7,500 
At least $7,500 but less than $15,000 
At least $15,000 but less than $37,500 
$37,500 or more 
The tax is: 
I % of the Maine taxable income 
$75 plus 2% of the excess over $7,500 
$225 plus 5% of the excess over $15,000 
$1,350 plus 6.99% of the excess over 
$37,500 
Sec. F-S. 36 MRSA §SlU, sub-§3-B, as enacted by PL 1999, c. 731, Pt. T, §7, 
II 
is amended to read: 
3-B. Individuals filing married joint return or surviving spouses; tax years 
beginning 2002 to 2007. For tax years beginning OR or after JaRl:laI)' I, in 2002 to 2007, 
for individuals filing married joint returns or surviving spouses permitted to file a joint 
return: 
If Maine Tal(able taxable income is: 
Less than $8,400 
At least $8,400 but less than $16,700 
At least $16,700 but less than $33,400 
$33,400 or more 
The tax is: 
2% of the Maine taxable income 
$168 plus 4.5% of the excess over $8,400 
$542 plus 7% of the excess over $16,700 
$1,711 plus 8.5% of the excess over 
$33,400 
Sec. F-6. 36 MRS A §Slll, sub-§3-C is enacted to read: 
3-C. Individuals filing married joint return or surviving spouses; tax years 
beginning after 2007. 
For tax years beginning on or after January 1, 2008, for 
individuals filing married joint returns or surviving spouses: 
If Maine taxable income is: 
The tax is: 
Less than $10,000 
1% of the Maine taxable income 
At least $10,000 but less than $20,000 
$100 plus 2% of the excess over $10,000 
At least $20,000 but less than $45,000 
$300 plus 5% of the excess over $20,000 
$45,000 or more 
$1,550 plus 6.99% of the excess over 
$45,000 
Sec. F-7. 36 MRSA §S403, 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 ~ 
2008, 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 specified in section 5 Ill, subsections -l-B I-C, ~ 
2-C and J-B. 3-C. If the 
dollar amounts of each rate bracket, 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 dollar bracket amounts of the tax rate 
0 
tables. 
The assessor shall incorporate such changes into the income tax forms, 
instructions and withholding tables for the taxable year. 
Sec. F -8. Application. The section in this Part that amends the Maine Revised 
Statutes, Title 36, section 5403 applies to tax years beginning on or after January 1, 2008. 
PART G 
IS 
Sec. G-l. 36 MRSA §5122, sub-§2,~, as amended by PL 2003, c. 70S, §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 amount 
subtracted is reduced by the long-term care premiums claimed as an itemized 
deduction pursuant to former section 5125. F or income tax years beginning on or 
after January 1, 2004, an amount equal to the total premiums spent for qualified 10ng-
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 former section 
5125; 
Sec. G-2. 36 MRS A §5122, sub-§2,~, 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 5075-A as long as the amount subtracted 
is reduced by the long-term care premiums claimed as an itemized deduction 
pursuant to former section 5125. 
For income tax years beginning on or after January 1, 2004, 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 former section 5125; 
I 
I I 
Sec. G-3. 36 MRSA §5124-A, as amended by PL 2005, c. 12, Pt. P, §5, IS 
repealed. 
Sec. G-4. 36 MRSA §5125, as amended by PL 2005, c. 12, Pt. P, §6 and affected 
by § I 0, is repealed. 
Sec. G-5. 36 MRSA §5203-C, sub-§l, ~G, as enacted by PL 2003, c. 673, Pt. 
JJ, §3 and affected by §6, is amended to read: 
G. 
"Tentative alternative minimum taxable income" means federal alternative 
minimum taxable income: 
(I) 
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 federal 
adjusted gross income in the case of individuals or federal taxable income in the 
case of corporations, estates and trusts under section 5 122, section 5125, 
s\:lbseotion 3 or section 5 164, 5 I 76 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 case of individuals or federal taxable income in the 
case of corporations, estates and trusts under section 5122, section 5125, 
s\:leseotion 3 or section 5 164, 5176 or 5200-A or as otherwise indicated by law to 
the extent not included in federal alternative minimum taxable income. 
Sec. G-6. 36 MRSA §5216-C, sub-§l, 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; or 
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 taxp~'er who clailBs Ii 
oresit \:Inser this section may not clailB an itelBized oharitable ded\:lction \:lnser section 
5125 for the afAO\:lnt of the contribution tftat EJ\:Ialified for tHe credit. 
Sec. G-7. 36 MRSA §5275, sub-§2, as amended by PL 1979, c. 378, §44, is 
repealed. 
Sec. G-S. Application. This Part applies to tax years beginning on or after 
January 1, 2008. 
PARTH 
Sec. H-1. 28-A MRS A §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 ~ 
50¢ per gallon on all malt liquor sold in 
the State. 
Sec. H-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 J.()¢. 45¢ per gallon on all wine other than 
sparkling wine manufactured in or imported into the State, $1 per gallon on all sparkling 
wine manufactured in or imported into the State and 25¢ per gallon on all hard cider 
manufactured in or imported into the State. 
Sec. H-3. Effective date. This Part takes effect July 1,2008. 
PART I 
Sec. 1-1. 36 MRSA §5200, sub-§l, as amended by PL 2005, c. 618, §6 and 
affected by §22, is further amended to read: 
1. Imposition and rate of tax. A tax at the rate of 8.93% of income is imposed for 
each taxable year at the following rates on each taxable corporation and on each group of 
corporations that derives income from a unitary business carried on by 2 or more 
members of an affiliated grouJr.~ 
If the insome is: 
Not over $25,000 
$25,000 but not over $75,000 
$75,000 but not over $250,000 
$250,000 or more 
The tax is: 
3.5% ofthe insome 
$875 plus 7.93% of the eKsess over 
$25,000 
$4,840 plus 8.33% of the e}(sess 
oyer $75,000 
$19,418 plus 8.93% of the eKsess 
oYer $250,000 
In the ease of an affiliated group of eorporations engaged in a unitary business with 
astivity taKable onl)' by Maine, the rates provided in this subseetion are applied only to 
the first $250,000 of the Maine net ineome of the entire group and must be apportioned 
equall)' among the taKable eorporations unless those taKable eorporations jointly eiest a 
I 
different apportionment. The balanee ofthe Maine net ineoffle of the entire group is taxed 
at 8.93%. 
In the ease of an affiliated group of eorporations engaged in a unitary business vlith 
aetivity taxable both 'Nithin and without this State, the rates provided in this sueseetion 
are applied only to the first $250,000 of the net ineome of the entire group and must be 
apportioned equally among the taKable eorporations unless those taxaele eorporations 
jointl)' eleet a different apportionment. The balanee of the net ineome of the entire group 
is taxed at 8.93%. 
Sec. 1-2. Application. This Part applies to tax years beginning on or after January 
1,2008. 
II 
PART J 
Sec. J-l. 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 f.% 9% 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; f.% 9% on the value of rental of living quarters in any hotel, rooming 
house or tourist or trailer camp; 10% on the value of rental for a period of less than one 
year of an automobile; f.% 9% 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. J-2. Effective date. This Part takes effect July 1,2008. 
PARTK 
Sec. K-l. 30-A MRSA §5681, sub-§5, as amended by PL 2005, c. 12, Pt. E, §I, 
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 L to P, 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 Government Fund on the last day of each month is: 
A. 
For months beginning before July 1,2007,5.1 %; and 
B. 
For months beginning on or after July 1,2007,5.2%. 
Sec. K-2. 36 MRSA §1752, sub-§3-B, as amended by PL 1999, c. 698, §I and 
affected by §3, is further amended to read: 
I 
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 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; candy and 
confections; snack food; and prepared food. 
Sec. K-3. 36 MRS A §1752, sub-§ll, ,A, as amended by PL 2005, c. 218, §14, 
is further amended to read: 
A. 
"Retail sale" includes: 
(1) Conditional sales, installment lease sales and any other 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;-aOO~ 
(2) Sale of produets for internal human eonsulftption to a person for resale 
through 'lending maehines when sold to a person more than 5Q% of 'Nhose gross 
reeeipts from the retail sale of tangible personal property are deri'red Horn sales 
through vending maehines. The tffi< must be paid by the retailer to the State. 
Sec. K-4. 36 MRS A §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 
generaIly considered a major component of a well-balanced meal. "Snack food" includes, 
but is not limited to, com 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. K-5. 36 MRSA §1760, sub-§14 is repealed. 
Sec. K-6. 36 MRSA §1760, sub-§16, ~, as enacted by PL 2005, c. 622, §6, is 
repealed. 
Sec. K-7. 36 MRSA §1760, sub-§16, ~, as enacted by PL 2005, c. 622, §6, is 
repealed. 
Sec. K-8. 36 MRS A §1760, sub-§16, ~, as enacted by PL 2005, c. 622, §6, is 
amended to read: 
K. 
Schools that are not operated by a governmental body; and 
Sec. K-9. 36 MRSA §1760, sub-§16, ~, as enacted by PL 2005, c. 622, §6, is 
amended to read: 
L. 
Incorporated nonprofit organizations or their affiliates whose purpose is to 
provide literacy assistance or free clinical assistance to children with dyslexia~~ 
Sec. K-IO. 36 MRS A §1760, sub-§16,~, as enacted by PL 2005, c. 622, §6, is 
repealed. 
Sec. K-ll. 36 MRSA §1760, sub-§17 is repealed. 
Sec. K-12. 36 MRS A §1760, sub-§24 is repealed. 
Sec. K-13. 36 MRSA §1760, sub-§34, as amended by PL 2005, c. 218, §23, is 
repealed. 
Sec. K-14. 36 MRSA §1760, sub-§43, as amended by PL 1983, c. 828, §6, is 
repealed. 
Sec. K-15. 36 MRSA §1760, sub-§49, as amended by PL 2005, c. 622, §7, is 
repealed. 
Sec. K-16. 36 MRSA §1760, sub-§64, as amended by PL 2003, c. 588, §10, is 
repealed. 
Sec. K-17. 36 MRSA §1760, sub-§65, as amended by PL 1993, c. 670, §6, is 
repealed. 
Sec. K-18. 36 MRSA §1760, sub-§71, as enacted by PL 1989, c. 533, §8, is 
repealed. 
Sec. K-19. 36 MRSA §1760, sub-§75, as enacted by PL 1989, c. 871, §15, is 
repealed. 
Sec. K-20. 36 MRSA §1760, sub-§76, as amended by PL 2003, c. 588, § 11, is 
repealed. 
Sec. K-21. 36 MRSA §2551, sub-§l-C is enacted to read: 
I-C. Amusement and recreation services. "Amusement and recreation services" 
means theater and opera performances, movies, pari-mutuel racing net receipts, spectator 
sporting events, commercial participant amusements and all other recreation services. 
Sec. K-22. 36 MRSA §2551, sub-§l-D is enacted to read: 
I-D. 
Business and legal services. 
"Business and legal services" includes tax 
preparation services; legal services; business support services; business ihvestigation and 
security services; warehousing and storage services; business-related dry cleaning and 
laundry services and other personal business services; and repair and maintenance of 
electronic equipment and commercial machinery. 
Sec. K-23. 36 MRSA §2551, sub-§7-C is enacted to read: 
7-C. 
Personal appearance services. 
"Personal appearance services" includes 
services provided by barber shops, beauty parlors and health clubs; personal care 
services; and cleaning, storage and repair of clothing and shoes. 
Sec. K-24. 36 MRSA §2551, sub-§12-A is enacted to read: 
12-A. Real and personal property services. "Real and personal property services" 
includes domestic services to buildings and dwellings; warehouse and storage services; 
insurance services; real estate services; home investigation and security services; 
specialized design services; household and electrical repairs and maintenance; repair and 
maintenance of household appliances and other goods; motor vehicle washing and repair; 
and other services to buildings and dwellings and related personal property. 
Sec. K-25. 36 MRSA §2551, sub-§18-A is enacted to read: 
IS-A. 
Social and organization services. 
"Social and organization services" 
includes consumer purchases of professional association memberships, club and fraternal 
organization memberships, domestic services, other household operations services and 
religious and welfare activities, including donations to such organizations. 
Sec. K-26. 36 MRSA §2551, sub-§20-A is enacted to read: 
20-A. Transportation services. "Transportation services" includes airplane, bus, 
railroad, truck, watercraft, taxi, limousine, toll road, pipeline, postal, courier and 
messenger services provided by a nongovernmental entity. 
Sec. K-27. 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 services; 
B. 
Fabrication services; 
C. 
Rental of video media and video equipment; 
D. 
Rental of furniture, audio media and audio equipment pursuant to a rental-
purchase agreement as defined in Title 9-A, section 11-105; 
E. 
Telecommunications services; 
F. 
The installation, maintenance or repair of telecommunications equipment; 
G. 
Private nonmedical institution services; 
H. 
Community support services; 
I. 
Day habilitation services; 
J. 
Personal support services; aM 
K. 
Residential training services~~ 
L. Personal appearance services; 
M. Real and personal property services; 
N. Business and legal services purchased by a person other than a business; 
O. Amusement and recreation services; 
P. Social and organization services purchased by a person other than a business; and 
Q. Transportation services. 
Sec. K-28. 36 MRSA §2557, sub-§3,~, as enacted by PL 2005, c. 622, §IO, is 
repealed. 
Sec. K-29. 36 MRSA §2557, sub-§3,~, as enacted by PL 2005, c. 622, §IO, is 
II 
repealed. 
Sec. K-30. 36 MRSA §2557, sub-§3,~, as enacted by PL 2005, c. 622, §IO, is 
amended to read: 
K. 
Schools that are not operated by a governmental body; and 
IS 
Sec. K-31. 36 MRSA §2557, sub-§3, ~, as enacted by PL 2005, c. 622, § 10, is 
amended to read: 
L. 
Incorporated nonprofit organizations or their affiliates whose purpose is to 
provide literacy assistance or free clinical assistance to children with dyslexiat-aOO~ 
Sec. K-32. 36 MRSA §2557, sub-§3, ~, as enacted by PL 2005, c. 622, § 1 0, is 
repealed. 
Sec. K-33. 36 MRSA §2557, sub-§9, as enacted by PL 2003, c. 673, Pt. Y, §25 
and affected by §29, is repealed. 
Sec. K-34. 36 MRSA §2557, sub-§13, as amended by PL 2005, c. 622, §11, is 
repealed. 
Sec. K-35. 36 MRSA §2557, sub-§26, as enacted by PL 2003, c. 673, Pt. Y, §25 
and affected by §29, is repealed. 
Sec. K-36. 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 I, paragraphs A 
to F and L to P to the Local Government Fund as provided by Title 30-A, section 5681, 
I 
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 I, 
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 
Substmce Abuse - Medicaid Seed program within the Department of Health and Human 
Services. 
Sec. K-37. Effective date. This Part takes effect July 1,2008. 
SUMMARY 
This bill provides a framework for property tax relief and Income tax relief 
discussions in the following ways. 
Part A increases the homestead property tax exemption from $13,000 to $50,000. 
Part B increases benefits by reducing the threshold for 100% reimbursement of 
property taxes from 8% of income to 6% of income. It also changes the maximum 
property taxes that may be considered in the formula from $3,000 to $2,400 for single-
member households and from $4,000 to $3,400 for households with 2 or more members, 
having the effect of reducing the income eligibility threshold to $60,000 for single-
member households and $85,000 for households with 2 or more members. 
Part C increases the earned income tax credit from 5% of the federal credit to 25% 
and makes it refundable. 
Part D provides that the personal exemption under the income tax will be the same as 
the federal personal exemption, increasing the amount from $2,850 to $3,400 for tax 
years beginning in 2007. 
Part E increases the low-income tax credit threshold from $2,000 of taxable income 
to $10,000 of taxable income. 
Part F reduces personal income tax rates and adjusts brackets. 
Part G eliminates the income tax incorporation of the standard deduction or itemized 
deductions claimed on a federal income tax return. 
Part H increases the excise tax on beer from 25¢ per gallon to 50¢ per gallon and on 
wine from 30¢ per gallon to 45¢ per gallon. 
Part I changes the rate of tax on all taxable income for corporations to 8.93%. 
Part J increases the sales tax on meals and lodging from 7% to 9%. 
Part K repeals various sales tax exemptions and broadens the sales tax and service 
provider tax to cover certain services not currently taxed. It also reinstitutes the sales tax 
on nonstaple foods.