An Act Relating to Sales Tax on Certain Rental Vehicles
Maine Legislature, Session 125, LD 0611
Committee: Taxation
Sponsors: TRAHAN, RECTOR
Amends: 36 MRSA §1752, 36 MRSA §1760, 36 MRSA §1811

Legislative Document 
No. 611 
S.P. 191 
In Senate, February 17, 2011 
An Act Relating to Sales Tax on Certain Rental Vehicles 
Reference to the Committee on Taxation suggested and ordered printed. 
JOSEPH G. CARLETON, JR. 
Secretary of the Senate 
Presented by Senator TRAHAN of Lincoln. 
Cosponsored by Senator: RECTOR of Knox. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  36 MRSA §1752, sub-§11, ¶B, as repealed and replaced by PL 2009, c. 
434, §22, is amended to read: 
B.  "Retail sale" does not include: 
(1)   Any casual sale; 
(2)  Any sale by a personal representative in the settlement of an estate unless the 
sale is made through a retailer or the sale is made in the continuation or operation 
of a business; 
(3)  The sale, to a person engaged in the business of renting automobiles, of 
automobiles, integral parts of automobiles or accessories to automobiles, for 
rental or for use in an automobile rented on a short-term basis.  For the purposes 
of this subparagraph, "automobile" includes a pickup truck or van with a gross 
vehicle weight of less than 26,000 pounds when the sale is made to a person 
primarily engaged in the business of renting automobiles as defined in subsection 
1-B; 
(4)  The sale, to a person engaged in the business of renting video media and 
video equipment, of video media or video equipment for rental; 
(5)  The sale, to a person engaged in the business of renting or leasing 
automobiles, of automobiles for rental or lease for one year or more; 
(6)  The sale, to a person engaged in the business of providing cable or satellite 
television services, of associated equipment for rental or lease to subscribers in 
conjunction with a sale of extended cable or extended satellite television services; 
(7)  The sale, to a person engaged in the business of renting furniture or audio 
media and audio equipment, of furniture, audio media or audio equipment for 
rental pursuant to a rental-purchase agreement as defined in Title 9-A, section 
11-105; 
(8)  The sale of loaner vehicles to a new vehicle dealer licensed as such pursuant 
to Title 29-A, section 953; 
(9)  The sale of automobile repair parts used in the performance of repair services 
on an automobile pursuant to an extended service contract sold on or after 
September 20, 2007 that entitles the purchaser to specific benefits in the service 
of the automobile for a specific duration; 
(10)  The sale, to a retailer that has been issued a resale certificate pursuant to 
section 1754-B, subsection 2-B or 2-C, of tangible personal property for resale in 
the form of tangible personal property, except resale as a casual sale; 
(11)  The sale, to a retailer that has been issued a resale certificate pursuant to 
section 1754-B, subsection 2-B or 2-C, of a taxable service for resale, except 
resale as a casual sale; 
(12)  The sale, to a retailer that is not required to register under section 1754-B, 
of tangible personal property for resale outside the State in the form of tangible 
personal property, except resale as a casual sale; 
(13)  The sale, to a retailer that is not required to register under section 1754-B, 
of a taxable service for resale outside the State, except resale as a casual sale; or 
(14)  The sale of repair parts used in the performance of repair services on 
telecommunications equipment as defined in section 2551, subsection 19 
pursuant to an extended service contract that entitles the purchaser to specific 
benefits in the service of the telecommunications equipment for a specific 
duration. 
Sec. 2.  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 
hotel, rooming house, or tourist or trailer camp; the transmission and distribution of 
electricity; the rental or lease of an automobile; the rental or lease of a pickup truck or 
van with a gross vehicle weight of less than 26,000 pounds from a person primarily 
engaged in the business of renting automobiles; 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; and the sale of prepaid calling service. 
Sec. 3.  36 MRSA §1760, sub-§21-A, as amended by PL 2007, c. 627, §47, is 
further amended to read: 
21-A.  Certain loaner vehicles.  The use of a loaner vehicle provided by a new 
vehicle dealer, as defined in Title 29-A, section 851, subsection 9, to a service customer 
pursuant to a manufacturer’s or dealer’s warranty, whether the loaner vehicle is provided 
directly to the service customer or by arranging for a 3rd-party provider of rental vehicles 
to provide the vehicle to the service customer under a short-term rental agreement 
between the 3rd party and the service customer with the fee paid by the new vehicle 
dealer.   
Sec. 4.  36 MRSA §1811, as amended by PL 2007, c. 627, §51 and affected by 
§96, is further amended to read: 
§1811.  Sales tax 
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, chapter 43; 7% 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 of a pickup truck or van with a gross vehicle weight of less than 
26,000 pounds rented from a person primarily engaged in the business of renting 
automobiles or of a loaner vehicle that is provided other than to a motor vehicle 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 or of a pickup truck or van with 
a gross vehicle weight of less than 26,000 pounds rented from a person primarily engaged 
in the business of renting automobiles is the total rental 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. 
The tax imposed upon the sale and distribution of gas, water or electricity 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.  
Rental or lease of an automobile, or of a pickup truck or van with a gross vehicle 
weight of less than 26,000 pounds rented from a person primarily engaged in the business 
of renting automobiles, for one year or more must be taxed at the time of the lease or 
rental transaction at 5% of the following:  the total monthly lease payment multiplied by 
the number of payments in the lease or rental, the amount of equity involved in any trade-
in and the value of any cash down payment.  Collection and remittance of the tax is the 
responsibility of the person that negotiates the lease transaction with the lessee. 
SUMMARY 
This bill requires a person that is primarily engaged in the business of renting 
automobiles to collect 10% sales tax on the short-term rental of a pickup truck or van 
with a gross vehicle weight of less than 26,000 pounds and allows such a person to 
purchase those vehicles tax-free, as is the case under current law with lighter-weight 
vehicles purchased for rental. 
This bill also provides that the tax exemption in current law for the use of a loaner 
vehicle provided pursuant to a warranty applies regardless of whether the new motor 
vehicle dealer provides the vehicle directly to the service customer or instead arranges for 
a 3rd-party rental company to provide the vehicle to the customer.