An Act To Reform and Lower Maine Taxes (~/
Maine Legislature, Session 124, LD 1314
Committee: Taxation
Sponsors: CROCKETT, ALFOND, BRYANT, FLEMINGS, PINGREE, PIOTTI, VALENTINO, WATSON, PERRY
Amends: 36 MRSA §6221, 36 MRSA §5111, 36 MRSA §5126, 36 MRSA §5219-S, 36 MRSA §5219-D, 36 MRSA §6, 36 MRSA §652, 36 MRSA §652-A, 36 MRSA §709-C, 5 MRSA §13090-K, 36 MRSA §1752, 36 MRSA §17, 36 MRSA §1760, 36 MRSA §1811

FIRST P..EGULAR SESSION-2009 
Legislative Document 
No. 1314 
H.P.917 
House of Representatives, March 31, 2009 
An Act To Reform and Lower Maine Taxes 
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Reference to the Committee on Taxation suggested and ordered plinted. 
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Presented by Representative CROCKETT of Augusta. 
Cosponsored by Senator ALFOND of Cumberland and 
'I7l;u~ /J1.11ltlC~{ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives:' BERRY of Bowdoinham, BRYANT of Windham, FLEMINGS of Bar 
Harbor, Speaker PINGREE of North Haven, PIOTTI of Unity, VALENTINO of Sa co, 
WATSON of Bath, Senator: PERRY of Penobscot. 
Printed on rt:cydcJ pnpt:r 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 36 MRS A §5219-DD is enacted to read: 
§5219-DD.Maine Residents Property Tax Pl'ogram credit 
A refundable credit is allowed against the taxes imposed by this Part in the amount of 
benefits allowed under chapter 907. This credit is not available if the taxpayer has filed a 
, separate application for benefits under chapter 907. 
Sec. A-2. 36 MRSA §6221 is enacted to read: 
§6221. Income tax credit option 
Aperson eligible for benefits under this chapte'r may elect to receive those benefits as 
a credit against income tax as provided iil section 5219-88 if the credit is claimed on the 
claimant's annual income tax return. 
Sec. A-3. 
Application. 
This Pali applies to tax years beginning on or after 
January 1,2009. 
PART B 
Sec. B-1. 36 MRS A §5111, 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 but before 2009. For tax years beginning on or after January 1, 2002 
but before January 1, 2009, for single individuals and married persons filing separate 
returns: 
If Maine 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. B-2. 36 MRSA §5111, sub-§l-C is enacted to read: 
I-C. Single individuals and married persons filing separate returns; tax years 
beginning 2009. For tax years beginning on or after January 1, 2009, for single 
individuals and married persons filing separate returns: 
. 31 
If Maine Taxable income is: 
The tax is: 
Less than $5,050 
2% of the Maine taxable income 
At least $5,050 but less than $10,050 
$101 plus 4.5% of the excess over $5,050 
At least $10,050 but less than $20,150 
$326 plus 7% of the excess over $10,050 
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$20,150 or more' 
$l,033 plus 75% of the excess over 
$20,150 
Sec. B-3. 36 MRSA§5111, 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 but before 2009. For tax 
years beginning on or after January 1, 2002 but before January I, 2009, for unmarried' 
individuals or legally separated individuals who qualify as heads of households: 
If Maine 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% of the 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. R .. 4. 36 MRSA §5111, sub-§2-C is enacted to read: 
2-C. Heads of households; tax years beginning 2009. For tax years beginning on 
or after January l, 2009, for unmarried individuals or legally separated individuals who 
qualify as heads of households: 
If Maine Taxable income is: 
Less than $7,600 
At least $7,600 but less than $15,100 
At least $15,100 but less than $30,250 
$30,250 or more 
The tax is: 
2% of the Maine taxable income ' 
$152 plus 4.5% of the excess over $7,600 
$490 plus 7% of the excess over $15,100 
$1,551 plus 7.5% of the excess over 
$30,250 
Sec. B-5. 36 MRSA §5111, sub-§3-B, as enacted by PL 1999, c. 731, Pt. T, §7, 
is amended to read: 
3-B. Individuals, filing married joint return or survlvmg spouses; tax years 
beginning 2002 but before 2009. For tax years beginning on or !).fter January 1, 2002 
but before Januaty 1, 2009, for individuals filing married joint returns or surviving 
spouses permitted to file ajoint return: 
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If Maine 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% ofthe~xcess over 
$33,400 
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Sec. B-6. 36 MRSA §5111, sub-§3-C is enacted to read: 
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3-c' Individuals filing married joint return or SUrvIVID!! spouses; tax years 
beginning 2009. For tax years beginning on or after January 'I, 2009, for individuals 
filing married joint returns or surviving spouses permitted to file a joint return: 
If Maine Taxable income is: 
The tax is: 
Less than $10,150 
2% of the Maine taxable income 
At least $10,150 but less than $20,150 
$203 plus 4.5% of the excess over $10,150 
At least $20,150 but less than $40,350 
$653 plus 7% of the excess over $20,150. 
$40,350 or more 
$2,067 plus 7.5% of the excess over 
$40,350 ' 
Sec. B-7. 36 MRSA §5126, first ~, as amended by PL 2001, c. 583, § 16, is 
further amended to read: 
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For income tax years beginning on or after January 1, 1998 but before January 1, 
1999, a resident individual isaHowed $2,400 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 income tax years beginning on or after 
January 1, 1999 but befpre January 1, 2000, a resident individual is allowed $2,750 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 
income tax years beginning on or after January 1, 2000 but before January 1, 2009, 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, 2009, 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. B-8. 36 MRSA §5219-S, as repealed and replaced by PL 2007, c. 693, §31, 
is repealed. 
Sec. B-9. 36 MRSA §5219-DD is enacted to read: 
§S219-DD. Earned income credit 
,A taxpayer is allowed a refundable credit against the taxes otherwise due under this 
Part equal to: 
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1. Tax years before 2009. For tax years beginning before January 1, 2009, 5% of 
the federal earned income credit for the same taxable year; 
2. Tax year beginning in 2009. For the tax year beginning January 1, 2009 arid 
ending December 31, 2009, 8% of the federal earned income credit for the same taxable 
year; 
3., Tax year beginning in 2010. For the tax year beginning January 1, 2010 and 
ending December j 1, 2010, 11 % of the federal earned income credit for the same taxable 
year; 
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4. Tax year beginning in 2011. For the tax year beginning January I, 2011 and 
ending December 31, 2011, 14% of the federal earned income credit for the same taxable 
year; 
5. Tax year beginning in 2012. For the tax year beginning January I, 2012 and 
ending December 31, 2012,17% of the federal earned income credit for the same taxable 
6. 
year; and 
.. Tax years beginning on or after 2013. For tax years beginning on or after 
Jamiary I, 2013, 20% 'ofthe federal earned income credit for the sametaxable year. 
Sec. B-IO. Application. This Part applies to tax years beginning on or after 
January 1,2009. 
PARTC 
Sec. C-l. 36 MRSA §6S2, sub-§2 is en~cted to read: 
2. Service charges. Notwithstanding the exemption from property taxes pursuant to 
subsection 1, service charges may be levied on certain real and personal property 
pursuant to this subsection. 
A. The owners of certain institutional and organizational real and personal propelty 
that is otherwise exempt from state or municipal taxation under subsection 1, except 
for those institutions or organizations exempt from taxation pursuant to the United 
States Constitution, the Constitution of Maine or federal law, are subjeCt to service 
. charges that are calculated according to the actual cost of providing municipal 
services to that real property and to the persons who use that property as provided in 
paragraphs E and H. Service charges may also be applied to any improved property 
owned by the State that is exempt from taxation under section 651. These services 
include, without'limitation: 
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(1) Fire protection; 
(2) Police protection; 
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Road maintenance and construction,· traffic control and snow and ice 
removill; 
(4) Water and sewer service, the. costs for wh ich are not otherwise recovered 
through user fees or other charges; 
(5) Sanitation services, the costs for which are not otherwise recovered through 
lIser fees or other charges; and 
(6) Any services other than education and welfare, the costs for which are not 
otherwise recovered through ltser fees or other charges. 
B. With respect to the determination of service charges, appeals must be made in 
accordance with an appeals process to be provided for by municipal ordinance. 
Appeals concerning the assessed value of any property agairist which a service charge 
is levied must be undertaken in accordance with subchapter 8. 
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c. The collection of unpaid service charges must be carried out in the same manner 
as provided in Title 38, section 1208. 
D. Municipalities shall use the revenues accrued from service charges to reduce the 
municipality's tax commitment as provided in section 709-C. 
E. The total service charges levied by a municipality on a tax-exempt entity under 
this section may not exceed the lesser of 1.5% of the tax-exempt entity's -annual 
'receipts and 50% of the amount that would have been assessed as· taxes on the 
property concerned if it were not exempt from taxation. 
To qualify for this 
limitation, the tax-exempt entity must file with the municipality a report of the annual 
receipts of the entity for the year immediately prior to the year for which the service 
charge is levied. The municipal officers shall abate the service charge amount that is 
in excess of the applicable limitation. For the purposes of this paragraph, "annual 
receipts" means any streams of income received in the most recent fiscal year by the 
tax-exempt entity from any source, including receipts of goods and services provided 
at the exempt property. "Annual receipts" does not include amounts received by a 
tax-exempt entity in the form of governmental or corporate grants, private charitable 
donations or trust or endowment earnings to the extent all receipts in those categories 
are actually spent to provide tangible and direct services to those people benefiting 
from the services provided by the organization. 
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F. A municipality may establish a payment schedule that is annual, semiannual.or 
quarterly. 
G. Municipalities shall adopt any necessary ordinances to carry out the provisions of 
this subsection regarding service charges. 
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H. 
Any servicechatges calculated under this subsection must be phased in as 
follows: 
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(1) For the tax year commencing April 1, 2010, the municipality may charge 
35% of the total service charge calculated; 
(2) For the tax year commencing April 1, 2011, the municipality may charge· 
70% of the total service charge collected; and 
(3) For the tax year commencing April 1, 2012, and·for each tax year after that 
date, the municipality may charge 100% of the total service charge calculated. 
Service charges levied pursuant to this subsection may be applied only to improved tax-
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exempt property, which is any parcel of land containing a building or other principal-use 
structure that is exempt from taxation pursuant to.this section. 
Sec~ C-2. 36 MRSA §652, last " 
as amended by PL 2007, c. 627, §20, IS 
repealed. 
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Sec. C-3. 36 MRSA §652-A is enacted to read: 
§6S2-A. Application schedules 
An organization. or institution that desires to secure exemption under section 652 
must make written application and file written proof of entitlement for each parcel to be 
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considered on or before April 1 st in the year in which the exemption is first requested 
with the assessors of the municipality in which the property would otherwise be taxable 
and· every 3 yeal:s thereafter. If granted,· the exemption continues in effect unless the 
assessors determine that the organization or institution is no longer qualified. Proof of 
entitlement must indicate the specific basis upon which exemption is claimed. 
Any organization or institution that is established as exempt pursuant to section 652 
on or before January 1, 2010 must·reapply for continuing exemption according to the 
following schedule .. 
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1. Exempt for 5 years or less. If on January 1,2010 the organization or institution 
has been exempt under section 652 for 5 years or less, the organization or institution must 
reapply for continuing exemption on or before April 1, 201 o and every 3 years thereafter. 
2. Exempt fol' mOl'e than 5 and less than 10 yeal's. If on January 1, 2010 the 
organization or institution has been exempt under section 652 for a period of more than 5 
years but less than 10 years, the organization or institution must reapply for continuing 
exemption on or before April 1,2011 and every 3 years thereafter. 
3. 
Exempt fol' 10 yeal's ·01' more. 
If on January 1,2010 the organization or 
institution has been exempt under section 652 for a period of 10 years or more, the 
organization or institution must reapply for continuing exemption on or before April 1, 
2012 and evelY 3 years thereafter. 
20. 
Sec. C-4. 36 MRSA §709-C is enacted to read: 
§709-C. Service charges 
The assessors shall deduct from the total amount re~uired to be assessed an amount' 
equal to the amount of service charges to be levied under section 652 for the mll11icipal 
fiscal year. 
Sec. C-S. Commission established. The Commission on Municipal Services and 
Tax-exempt Property, referred to in this section as "the cOlllmission," is established. 
1. Commission membership. The commission· consists of the following 13 
members: 
A. Five members, appointed by the Governor: 
(1) A state official experienced in property tax assessment; 
(2) A state official experienced in tax policy; 
(3) A county official; 
(4) 
A state official responsible for the disposition and acguisitionof state 
propel1y; and 
35(5) A representative of the private sector with experience in organizational 
restructuring; 
B. Four members, appointed by the President of the Senate: 
(I) A municipal officer; 
(2) A municipal manager; 
(3) .A representative of a nonprofit entity; and 
(4) A representative of an organization representing municipal officials; and 
C. Four members, appointed by the Speaker of the House of Representatives: 
(I) A municipal financial official; 
(2) A representative of an organization representing the' education community; 
and 
(3) Two representatives of the general public without ties to any entity that is 
exempt from propelty tax assessments. 
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2. Appointments. All appointments must be made no later than 30 days following 
the effective date of this Part. The President of the Senate and the Speaker of the House 
of Representatives jointly shall determine the chair and cochair of the commission. The 
appointing authorities shall notify the Executive Director of the Legislative Council upon 
making their appointments. The cochairs shall convene the first meeting of the 
commission no later than 15 days after the appointment of all members is complete. 
3. Duties. The commission shal1 develop a formula or process for municipalities to 
use to determine a municipal cost component. The commission shal1 analyze the extent 
of entities exempt from property tax and the impact of those tax~exempt entities on the 
costs of Tnunicipal services.· The commission may consider any other options it 
determines necessary to fulfil1 its responsibilities. 
4. Staff assistance. The Executive Department, State Planning Office shall provide 
necessary staffing services to the commission. 
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5. Compensation. Compensation may not·be paid to members of the commission. 
Members of the commission who are not otherwise compensated by their employers or 
other entities that they represent are· entitled to r-eceive reimbursement of necessary 
expenses incurred for their attendance at authorized meetings of the commission. 
286. Report. The commission shall submit its repOlt, together with any recommended 
implementing legislation, to the First Regular Session of the 125th Legislature no later 
than December 6,20 10. If the commission requires an extension of time to make its 
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report, it may apply to the Legislative Council, which may grant the extension. 
Sec. C-6. Application. Those sections of this Palt that repeal the Maine Revised 
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Statutes, Title 36, section 652, last paragraph and enact Title 36, section 652, subsection 
2,and Title 36, sections 652-A and 709-C apply to propelty tax years beginning on or 
after April I, 2010. 
PARTD 
Sec. D-l. 5 MRSA §13090-K, sub~§2, as enacted by PL 2001, c. 439, Pt. 
UUUU, § I, is amended to read: 
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2. Source of fund. Beginning July 1,;wID 2010 and every July 1st 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 .:t% tax imposed on 
tangible personal property and tm(able services the value of liquor sold in licensed 
establishments, rental of living quarters in a hotel, rooming house or tourist or trailer 
camp and prepared food 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, sectiOll 5681, subsection 5. Beginning on October 1,;wID 2010 
and every October 1st thereafter, the State Controller shall transfer to the Tourism 
Marketing Promotion Fund an amourit, as certified by the State Tax Assessor, that is 
equivalent to 5% of the ~ 
tax imposed on tangible personal property and tmtable 
services the value of liquor sold in licensed establishments, rental of living quarters in a 
hotel, rooming house or tourist or trailer camp and prepared food pursuant to Title 36, 
section 181 1, 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. D-2. 36 MRS A §1752, sub-§l-I is enacted to read: 
1-1. Amusement and recreational services. "Amusement and recreational services" 
means all services provided in this State to the general public or through private clubs 
that involve exchanging a right to access to any amusement, recj'eational, exhibitive, 
cultural or athletic activity for any user fee, price of admission, gate fee or equivalent 
form bf remuneration; 
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Sec. D-3. 36 MRSA §1752, sub-§l-J is enacted to read: 
I-J. Construction services. "Construction services" means services provided in this 
State to the general public by a person engaged in the activity of building. The activity of 
building pertains to any building, highway,' road, railroad, excavation, manufactured 
building or other structure and involves any act of construction, alteration, repair, 
substantial maintenance, addition, subtraction, improvement, movement or demolition or 
the construction of scaffolding or other· structures or work related to the activity of 
building. "Construction services" includes, but is not limited to, the services typically 
provided by building contractors, road and driveway contractors, concrete contractors, 
excavators, carpenters, masons, electricians, plumbers, roofers, siding applicators and 
house painters. 
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Sec. D-4. 36 MRSA §1752, sub-§l-K is enacted to read: 
l-K. Consumer purchases of memberships in social organizations. "Consumer 
purchases of memberships in social organizations" includes, but is not limited to, 
consumer purchases of professional associatiOli, club and fraternal organization 
memberships and employment agency fees. 
"Consumer purchases of memberships in 
social organizations" does not include donations made to charitable organizations or labor 
union dues. 
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Sec. D-S. 36 MRSA §17S2, sub-§7-F is enacted to read: 
7-F. Personal services. "Personal services" means services provided in this State to 
the general public by a person of specialized skill, talent or experience. A provider of 
"personal services" characteristically provides attendant care to the recipient of the 
service or care or maintenance or repair services to the recipient's real or personal 
property .. "Personal services'" includes, but is not limited to, stich services as: 
A. Personal attendant services, including, but not limited to, barbering, beautician, 
manicure, tattooing, body piercing, massage, reflexology, tanning and exercise or 
fitness services; 
B .. Laundering and dry cleaning services; 
C. Painting, papering and interior decoration services; 
D. Jewehy, camera, watch and gun cleaning and repair services; 
E. Pet grooming and kennel services; 
F. Musical instrument tuning and repair services; 
O. Swimming pool installation, repair, cleaning and maintenance services; 
H. Radio, television and sound system repair s.ervices; 
I. Furniture, rug and upholstery cleaning and repair services; 
J. Locksmith services; 
K. 
Personal property and' self-storage services, including storage and mooring 
services for noncommercial watercraft; 
L. 
Services related to the washing, cleaning, polishing, lubrication, painting or 
detailing of motor vehicles; 
M. Disinfection and pest extermination or control services; 
N. Landscaping, lawn. care, grounds maintenance and tree removal services; 
O. Photographyand photographic studio services; 
P. Printing, imprinting, painting or lettering tangible personal propeliy f~r persons 
who furnish tangible personal propeliy for that service; 
Q. Any fabrication, printing or production of tangible personal property by special 
order when tangible personal property is not intended for resale; 
R. Repair services for nOilcommercial watercraft; 
S. Dance instruction and dance studio services; 
T. Dating, escOli and personal introduction services; 
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Flower or balloon delivery services and services similarly provided as a 
demonstration of personal appreciation; 
V. Taxidermy services; 
W. Flight instruction services; 
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x. Antique or art auctioning or dealership services; 
Y. 
Domestic services, such as meal preparation, housecleaning or household 
operation services; 
z. Moving and storage services; and 
. AA. Veterinarian services. ° 
"Personal services" does not include construction services; 
Sec. D-6. 36 MRS A §1752, sub-§l1, ~A, as amended by PL 2007, c. 437, §10, 
is further amended to read: 
A. "Retail saie" includes: 
(I) 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; 
(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; 
(3) A sale in the ordinary course of business by a retailer to a purchaser who is 
not engaged in selling that kind of tangible personal property or taxable service in 
the otd inary course of nipeated and successive transactions of like character; aOO-
(4) The sale or liquidation of a business or the sale ofosubstantially all of the 
assets of a business, to the extent that the seller purchased the ° assets of the 
business for resale, lease or rental in the ordinary' course of business, except 
when: 
(a) The sale is to an affiliated entity and the transferee, or ultimate transfere,e 
in a series of transactions among affiliated entities, purchases the assets for 
'resale, lease or rental in ,the ordinary course of business; or 
(b) The sale is to a person that purchases the assets for resale, lease or rental 
in the ordinary course of business or that purchases the assets for transfer to 
an° affiliate, directly or through a series of transactions among affiliated 
entities, for resale, lease or rental by the affiliate in the ordinary course of 
business. 
For purpose:; of this subparagraph, "affiliate" or "affiliated" includes both direct 
and indirect affiliates~; and 
(5) Any taxable service to the extent the taxable service is provided in this State 
and only if the relationship between the provider and the recipient of the taxable 
service is not an employment relationship with res·pect to the provision of the 
service. 
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Sec. D-7. 36 MRS A §1752, sub-§14, as amended by PL 2007, c. 627, §43, is 
further amended to read: 
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14. Sale price. "Sale price" means the total amount of a retail sale valued in money, 
whether received in money or otherwise. 
A. 
"Sale price" includes: 
(1) Any consideration for services that are a part of a retail sale; and 
(2) All receipts, cash, credits and property of any kind or natl!re and any amount 
for which credit is allowed' by the seller to the purchaser, without any deduction 
on account of the cost of the property sold, the cost of the materials used, labor or 
service cost, interest paid, losses or any other expenses. 
When a taxable service is provided for a fee that is contingent on an ultimate award, 
settlement or similar financial result and the fee is a certain percentage of that 
ultimate award or settlement, the fee is deemed to include both the sale price aild the 
applicable tax. 
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; 
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(4) The price received for labor or services used in installing or applying or 
repairing the property sold, if separately charged or stated; 
(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, 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, provid'ed that as~long as 
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; 
, (10) The lead-acid battery deposit imposed by Title 38, section 1604, subsection 
2-B; 
(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; 9f 
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(12) The premium on motor vehicle oil changes imposed by Title 10, section 
1020, subsection 6~~ 
(13) 
With respect to any fee for a taxable service, any portion of that fee 
representing direct reimbursement charged to the recipient ofthe taxable service 
for commodities or services previously paid by the person providing the service, 
as long as any tax on those commodities or services, if any tax applies, has been 
previously paid. 
Sec. D-S. 36 MRSA §1752, sub-§17-B, as amended by PL 2007, c. 410, §2 and 
affected by §6, is further amended to read: 
17-B. Taxable service. "Taxable service" means the rental of living quarters in a 
hotei, rooming house, or tourist or trailer camp; the transmission and distribution of 
electricity; the rentaJ or lease of an automobile; the sale of an extended service contract 
on an automobile that entitles the purchaser to specific benefits in the service of the 
automobile for a specific duration; amusement and recreational services except those 
offered or operated by a' nonprofit organization for the benefit of that nonprofit 
organization; consumer purchases of memberships in social organizations; personal 
services; transportation services purchased by consumers; and the sale of prepaid calling 
~rvice. 
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Sec. D-9. 36 MRSA §1752, sub-§20-B is enacted to read: 
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20-B. Trarisportation services purchased by consumers. "Transportation services 
purchased by consumers" includes, but is not limited to, consumer purchases of services 
such as airline, passenger railroad, taxicab, limousine, ferry and toll-road services. 
Sec. D-IO. 36 MRSA §1760, as amended by PL 2007, c. 529, §§ 1 to 3 and c. 627, 
§§47 to 49 and c. 675, §1 and affected by §2 and amended by c. 691, §1 and affected by 
§2 and amended by c. 693, § 15 and affected by §37 and amended by c. 695, Pt. A, §44, is 
repealed. 
. 
Sec. D-ll. 36 MRS A §1760-C, as amended by PL 2007, c.437, § 11, is repealed. 
. Sec. D-12. 36 MRS A §1760-D is enacted to read: 
§1760-D. Exemption 
A taxon sales, storage or use may not be collected upon or in connection with: 
1. Exemptions by constitutional provisions. Sales that this State is prohibited from 
taxing under the United States Constitution, the laws of the United States or the 
Constitution of Maine; or 
2. Certain governmental entities. Sales to the State or any political subdivision of 
the State,' or to the Federal. Government, or to any unincorporated agency or 
instrumentality of the State or the Federal Government or to any incorporated agency or 
instrumentality of the State or the Federal Government wholly owned by the State or 
Federal Government. This exemption does not apply to corporations organized under 
Title IV, PartE of the Farm Credit Act of 1971, 12 United StatesCode'-Sections 2211 to 
2214a. 
' 
Sec. lD-13. 36 MRSA §1811,first €[, as repealed and replaced by PL 2007, c. 
627, §51 and affected by §96, is 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 7% 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,chapterA3; q.% 10% 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, including a loaner vehicle that is provided other than to a motor 
ve~icle dealer's service customers pursuant to a manufacturer's or dealer's warranty; 7% 
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. 
The value of rental for a period of less than one year of an automobile is the total rental 
'15 
charged to the lessee and includes, but is not limited to, maintenance and service 
contracts, drop-off or pick-up fees, airport surcharges, mileage fees and any separately 
itemized charges on the rental agreement to recover the owner's estimated costs of the 
charges imposed by government authority for title fees, inspection fees, local excise tax 
and agent fees on all vehicles in its rental fleet registered in the State. All fees must be 
disclosed when an estimated quote is provided to the lessee. 
Sec. lD-14. 36 MRSA §'1811, 2nd err, as amended by PL 2007, c. 438, §48, is 
further amended to read: 
The tax imposed upon the sale and distribution of gas, water or electricity~ 
telecommunications services, by any public utility, the rates for which sale and 
distribution are established by the Public Utilities Commission, must be added to the rates 
, so established. 
Sec. lD-lS. Revisor's review; cross-references. The Revisor of Statutes shall 
review the Maine Revised Statutes and include in the errors and inconsistencies bill 
submitted to the Second Regular Session of the 124th Legislature pursuant to Title 1, 
section 94 any sections necessary to correct and update any cross-references in the 
statutes to provisions of law repealed in this Act. 
Sec. D-16. Effective date. This Part takes effectJanuary 1,2010. 
SUMMARY 
This bill implements tax reform in the following areas. 
PART A 
This Part allows persons eligible for benefits under the Maine Residents Property Tax 
Program, also known as the Circuitbreaker Program, to file for a r~fundable credit using 
the individual income tax form. 
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PARTB 
This Part affects individual income taxes by decreasing the top rate from 8.5% to 
7.5%, conforming the personal exemption to the federal personal exemption and 
increasing the earned income tax credit from 5% to 20% over a 5-year period and 
allowing the credit to exceed the amount of income taxes actually paid. 
. 
PARTe 
This Part affects the ability of a municipality to impose service charges on tax-
exempt properties located in that municipality in the following ways: 
I. It expands the existing service charges statilte in the following ways: service 
charges are applied to all improved exempt property except churches, federal property 
and municipal and quasi-municipal propeliy; service charges are phased in over a 3-year 
period; and the service charge may not exceed the lesser of 1.5% of the organization's 
annual receipts and 50% of the amount that would have been assessed as taxes if the 
organization were not exempt; 
2. It provides a schedule for all existing propeI1ies currently exempt under the law to 
reapply for eligibility under the new standards of eligibility in a phased-in manner over 
the next 3-year period; 
3. It specifies that revenues derived from service charges must be used to reduce the 
municipal assessment in the same fashion as funds received under the municipal revenue 
sharing program; and 
4. It establishes the Commission. on Municipal Services and Tax-exempt Propeliy, a 
commission consisting of appointees of the Governor, President of the Senate and 
Speaker of the House. The commission is required to develop a formula or process for 
municipalities to use to determine a municipal cost component. The commission shall 
analyze the extent of entities exempt from property tax and the impact of those tax-
exempt entities on the costs· of municipal services and consider any other options the 
commission determines are necessary to fulfill its responsibilities .. 
PARTD 
This PaI1 affects the imposition of sales tax in the following ways: 
1. It expands the definition of "taxable service" for· purposes of the imposition of 
sales tax to include amusement, recreational and personal services and consumer 
purchases of transportation services and prof~ssional, club 01' fraternal memberships. It 
subjects those services to the 5% sales tax. The term "construction services" is also 
defined for the purpose of distinguishing nontaxable·construction services from taxable 
personal services; 
2. It eliminates all the current statutory sales tax exemptions except those that are . 
required by the Constitution of the United States, federal law or the Constitution of Maine 
and sales to the State or the Federal Government and any political subdivisions of the 
State or the United States; and 
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3. It increases the so-called "lodging tax" from 7% to lO%. 
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