An Act To Allow Municipalities To Impose a Local Option Lodging or Meals Tax
Maine Legislature, Session 124, LD 1426
Committee: Taxation
Sponsors: FLEMINGS, PERRY, BERRY, BLODGETT, CROCKETT, FLAHERTY, HUNT, DAMON
Amends: 36 MRSA §1817

MAINE STATE LEGISLATURE 
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AUGUSr~~y r~JfWJE 
124th MAINE LEGISLA URE 
FIRST PJ:GULAR SESSIOl'-~-2009 
Legislative Document 
No. 1426 
H.P. 1002 
House of Representatives, April 7, 2009 
An Act To Allow Municipalities To Impose a Local Option Lodging 
or Meals Tax 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative FLEMINGS of Bar Harbor. 
Cosponsored by Senator PERRY of Penobscot and 
11/~ In· m!l£~{ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: BERRY of Bowdoinham, BLODGETT of Allgusta, CLEARY ofHoul!on, 
CROCKETT of Augusta, FLAHERTY of Scarborough, HUNT of Buxton, Senator: DAMON 
of Hancock. 
. 
PruUt:J I'll rt!c~dcJ paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §1817 is enacted to read: 
§1817. Municipal local option lodging or meals tax 
1. Definitions. As used in this section, unless the coritext otherwise indicates, the 
following.!emls have the following meanings. 
A. "Local option tax" means either a local option lodging tax or a local option meals 
tax, or both. 
. 
B. "Lodging" means the rental of living quarters in any hotel, rooming house or 
tourist or trailer camp that is subject to sales taxation under this Part. 
. 
C. "Meals" means prepared food. 
D. "Participating municipality" means a municipality that has imposed a local option 
lodging tax pursuant to this section. 
. 
2. Authorization to impose local option tax. A municipality may impose a local 
option lodging tax of no more than 4% or a local option meals tax of no more than 4%, or 
both, subject toa referendum pursuant to subsection 7. 
3. Notify State Tax Assessor. A municipality that imposes a local option tax under 
subsection 2 shall notify the State Tax Assessor at least 90 days before the local option 
. tax is effective. 
4. Administration. Every person that manages or operates in the regular course of 
business or on· a casual basis a hotel, rooming house or tourist or trailer camp in a 
participating municipality or that collects or receives rents from a hotel, rooming house or 
tourist or trailer camp in a participating municipality shall transfer the revenue from the 
local option lodging tax at the time and in the ,manner provided in section 1951-A for the 
transfer of state sales tax revenue. 
. Every retailer that provides meals in a participating municipality shall impose and collect 
the local option tax approved for that municipality on the meals provided in that 
participating municipality and transfer the revenue from the local option tax at the time 
and in the manner provided in section 1951-A for the transfer of state sales tax revenue. 
The local option tax is subject to the same enforcement provisions, interest, penalties and 
administrative actions as other taxes assessed under this Part. 
5. Distribution of revenue. Each month, the State Tax Assessor shall identify the 
amount of revenue attributable to each participating municipality under this section, 
subtract the costs of administering this section and certify the net amount due each 
. participating municipality to the Treasurer of State. 
Of the net amount certified under this subsection, the Treasurer of State shall make 
monthly payments as follows: 
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A. To the participating municipality, 75% of the net amount; and 
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B. To the county in which that participating municipality is located, 25% of the net 
amount. 
For purposes of this subsection, "costs of administering this section" means the lesser of 
the actual cost to the assessor of administering this section and 2% of the total revenue 
generated by local optiontaxes. 
6. Effect on revenue sharing and other state aid programs. Revenue received 
pursuant to subsection 5 may not be considered to be receipts from the taxes imposed 
under this Part for the purpose of transfers to the Local Government Fund under Title 
30-A, section 5681. Revenue received pursuant to subsection 5 may not be used to 
reduce or eliminate any funding otherwise due the county or participating municipality 
under· any provision of law providing aid to the county or participating municipality, 
including, but not limited to, aid for schools, roads, public assistance or jails. 
7. Referendum. The question of whether to impose a local option tax must be 
submitted to the legal voters of a municipality that seeks to impose the local option tax. 
The petition process and voting 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 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 assessor. 
The local option tax may be discontinued by a referendum conducted in the same manner 
as the referendum adopting the tax under this section. 
. 8. Effective date of tax; acceptance by voters. The local option tax authorized by 
this section takes effect 120 days after the municipal referendum vote under subsection 7 
if it is accepted by a majority of the local voters voting at the election and the total 
number of votes cast 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 impose a local option lodging tax or a local option 
meals tax, or both, of 4% or less by local referendum. Revenue from the local option tax 
is distributed as follows: 75% to the municipality and 25% to the county in which the 
municipality is located.