An Act To Require Review of Certain Changes to Sales Tax Policy Application or Practice prior to Implementation
Maine Legislature, Session 125, LD 0590
Committee Amendment CA_A_H434 (House)

COMMITTEE AMENDMENT ,.fj" to H.P. 448, L.D. 590, Bill, "An Act To 
Require Review of Certain Changes to Sales Tax Policy Application or Practice prior to 
Implementation" 
Amend the bill by striking out the title and substituting the following: 
'An Act To Require Certain Changes to Sales and Use Tax Policy Application or 
Practice' 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. 1. 36 MRS A §141, sub-§4 is enacted to read: 
4. Audit assessment limitation. Notwithstanding any other provisions of this Title, 
after an audit of a taxpayer, the assessor may assess additional sales and use taxes against 
the taxpayer only if the assessor determines that a nonpayment or undemayment of taxes 
was the result of: 
A. The taxpayer's intentional disregard of the sales and use tax law or fraud with the 
intent to evade tax liability; 
B. A mathematical error in the calculation of sales and use taxes paid or owed by the 
taxpayer; 
C. An undemayment or nonpayment of sales and use taxes when at least of 80% of 
taxpayers currently pay taxes on the same types of sales or uses. Maine Revenue 
Services has the burden of proving that this 80% threshold has been met; or 
D. An undemayment or nonpayment of the sales and use tax when the taxpayer has 
previously demonstrated awareness of the obligation to pay the tax. 
For the purpose of this subsection, "additional sales and use taxes" means taxes assessed 
on sales or uses that have not been previously assessed against the taxpayer for the same 
types of sales or uses. 
COMMITTEE AMENDMENT 
~ofS 
COMMITTEE AMENDMENT"~" to H.P. 448, L.D. 590 
If the assessor detennines that a tax has not been paid or has been underpaid and the 
assessor is unable to assess additional sales and use taxes, interest or penalties because of 
restrictions described in paragraphs A to D, the assessor may submit recommended 
legislation to the joint standing committee of the Legislature having jurisdiction over 
taxation matters or propose major substantive rules pursuant to Title 5, chapter 375, 
subchapter 2-A to clarify the situations in which tax is due. The assessor shall notify all 
potentially affected taxpayers of the submission of recommended legislation or the 
proposal of major substantive rules and the date of any public hearings on the legislation 
or proposed rules.' 
SUMMARY 
This amendment, which is the majority report, replaces the bill and provides that the 
State Tax Assessor may assess additional sales and use taxes as a result of nonpayment or 
underpayment only if there has been fraud with the intent to evade taxes, a mathematical 
error in the calculation of taxes owed has occurred, the taxpayer has previously 
demonstrated awareness of the obligation to pay the tax or the obligation to pay the tax 
has been recognized by at least 80% of taxpayers in similar situations. 
The amendment also authorizes the assessor to recommend legislation or to propose 
major substantive rules to clarify tax obligations if the conditions for assessing additional 
sales and use taxes are not met and requires the assessor to notify potentially affected 
taxpayers of any public hearings on the legislation or proposed rules. 
FISCAL XOTE REQU1RED 
(~ee attached) 
COMMITTEE AMENDMENT 
Approved: 05/19/11 
ha~ 
LD590 
LR 1599(02) 
An Act To Require Review of Certain Changes to Sales Tax Policy Application or Practice prior to 
Implementation 
Net Cost (Savings) 
General Fund 
Revenue 
General Fund 
Fiscal Note for Bill as Amended by Committee Amendment l~" 
Committee: Taxation 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2011-12 
$9,975,000 
FY 2012-13 
Projections 
FY 2013-14 
$13,871,900 
$14,288,057 
Projections 
FY 2014-15 
$14,745,275 
($9,975,000) 
($13,871,900) 
($14,288,057) 
($14,745,275) 
Other Special Revenue Funds 
($525,000) 
($730,100) 
($752,003) 
($776,067) 
Fiscal Detail and Notes 
Providing that the State Tax Assessor may assess additional taxes as a result of nonpayment or underpayment only if 
there has been fraud with intent to evade taxes, a mathematical calculation error, demonstrated previous awareness by 
the taxpayer that the tax is due or when at least 80% of the taxpayers in similar situations have recognized the 
obligation to pay tax will reduce General Fund revenue and revenue sharing starting in fiscal year 2011-12. 
LR 1599(02) - Fiscal Note - Page 1 of 1