An Act To Reform the Maine Estate Tax
Maine Legislature, Session 125, LD 0898
Committee: Taxation
Sponsors: HASTINGS, KNIGHT, HILL, HOBBINS, ROSEN, WOODBURY
Amends: 36 MRSA §135, 36 MRSA §144, 36 MRSA §4061

Legislative Document 
No. 898 
S.P. 286 
In Senate, March 8, 2011 
An Act To Reform the Maine Estate Tax 
Reference to the Committee on Taxation suggested and ordered printed. 
JOSEPH G. CARLETON, JR. 
Secretary of the Senate 
Presented by Senator HASTINGS of Oxford. 
Cosponsored by Representative KNIGHT of Livermore Falls and 
Senators: HILL of York, HOBBINS of York, ROSEN of Hancock, WOODBURY of 
Cumberland. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  36 MRSA §135, sub-§1, as amended by PL 2007, c. 438, §7, is further 
amended to read: 
1.  Taxpayers.  Persons subject to tax under this Title shall maintain such records as 
the State Tax Assessor determines necessary for the reasonable administration of this 
Title.  Records pertaining to taxes imposed by chapters 371 and, 575 and 577 and by Part 
must be retained as long as is required by applicable federal law and regulation.  
Records pertaining to the special fuel tax user returns filed pursuant to section 3209, 
subsection 2 and the International Fuel Tax Agreement pursuant to section 3209, 
subsection 1-B must be retained for 4 years.  Records pertaining to all other taxes 
imposed by this Title must be retained for a period of at least 6 years.  The records must 
be kept in such a manner as to ensure their security and accessibility for inspection by the 
assessor or any designated agent engaged in the administration of this Title.  
Sec. 2.  36 MRSA §144, sub-§2, ¶A, as enacted by PL 1997, c. 668, §10, is 
amended to read: 
A.  Subsection 1 does not apply in the case of sales and use taxes imposed by Part 3, 
estate taxes imposed by chapter 575 or 577, income taxes imposed by Part 8 and any 
other tax imposed by this Title for which a specific statutory refund provision exists. 
Sec. 3.  36 MRSA §4061, as enacted by PL 1981, c. 451, §7, is amended to read: 
§4061.  Applicability of provisions 
This chapter applies to the estates of persons who die after June 30, 1986 and before 
January 1, 2011. 
Sec. 4.  36 MRSA c. 577 is enacted to read: 
CHAPTER 577 
NEW MAINE ESTATE TAX 
§4101.  Applicability of provisions 
This chapter applies to the estates of persons who die after December 31, 2010. 
§4102.  Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1.  Federal gross estate.  "Federal gross estate" means the gross estate of a decedent 
as determined by the assessor in accordance with the Code. 
2.  Federal taxable estate.  "Federal taxable estate" means the taxable estate of a 
decedent as determined using the applicable provisions of the Code as of the decedent's 
date of death, except that the state death tax deduction contained in the Code, Section 
2058 must be disregarded. 
3.  Maine elective property.  "Maine elective property" means all property in which 
the decedent at the time of death had a qualified income interest for life and with respect 
to which the estate of a predeceased spouse of the decedent filed an election to treat such 
property as Maine qualified terminable interest property pursuant to this chapter or, if 
applicable, chapter 575.  The value of Maine elective property is the value determined by 
the assessor in accordance with the Code as if such property were includable in the 
decedent's federal gross estate pursuant to the Code, Section 2044 and, in the case of 
estates that do not incur a federal estate tax, as if the estate had incurred a federal estate 
tax. 
4.  Maine exemption amount.  "Maine exemption amount" means the sum of 
$1,000,000.  The estate of a resident having a Maine taxable estate valued at $1,000,000 
or less does not incur a Maine estate tax. 
5.  Maine qualified terminable interest property.  "Maine qualified terminable 
interest property" means property: 
A.  That is eligible to be treated as qualified terminable interest property under the 
Code, Section 2056(b)(7); 
B.  For which no election allowable under the Code, Section 2056(b)(7) is made with 
respect to the federal estate tax; and 
C.  With respect to which an election is made, on a return timely filed with the 
assessor, to treat the property as Maine qualified terminable interest property for 
purposes of the tax imposed by this chapter.  The amount of property with respect to 
which the election is made may not be greater than the amount, if any, by which the 
applicable exclusion amount determined as of the date of the decedent's death using 
Code, Section 2010(c) in effect on that date exceeds the Maine exemption amount. 
6.  Maine taxable estate.  "Maine taxable estate" means the federal taxable estate of 
a decedent: 
A.  Decreased by an amount equal to the value of the Maine qualified terminable 
interest property in the estate of the decedent; 
B.  Decreased by the value of all real and tangible personal property owned by the 
decedent that is situated outside this State; 
C.  Increased by an amount equal to the value of Maine elective property in respect of 
the decedent; and 
D.  Increased by the value of all taxable gifts as defined in the Code, Section 2053 
made by the decedent during the one-year period ending on the date of the decedent's 
death. 
7.  Nonresident.  "Nonresident" means a natural person domiciled in a jurisdiction 
other than this State at the time of death. 
8.  Personal representative.  "Personal representative" means the personal 
representative as defined under Title 18-A, section 1-201, subsection (30) of the decedent 
or, if there is no personal representative appointed, qualified and acting within this State, 
any person who is in the actual or constructive possession of any property included in the 
federal gross estate of the decedent. 
9.  Resident.  "Resident" means a natural person domiciled in this State at the time of 
death. 
10.  Transfer.  "Transfer" includes the passing of property or any interest therein, in 
possession or enjoyment, present or future, by inheritance, descent, devise, succession, 
bequest, grant, deed, bargain sale, gift or appointment in the manner described in this 
chapter. 
11.  Value.  "Value" means, when determining value for purposes of this chapter,  
with respect to an estate or to property included in an estate, including Maine qualified 
terminable interest property, the value as determined by the assessor in accordance with 
the Code. 
§4103.  Tax on estate of resident 
1.  Imposition of tax.  A tax is imposed upon the transfer of the estate of every 
person who dies after December 31, 2010 and who, at the time of death, was a resident 
and whose Maine taxable estate exceeds the Maine exemption amount. 
2.  Computation of tax.  The tax under this section is assessed as follows: 
A.  If the amount of the Maine taxable estate that exceeds the Maine exemption 
amount does not exceed $500,000, the tax is 1% of the amount that exceeds the 
Maine exemption amount; 
B.  If the amount of the Maine taxable estate that exceeds the Maine exemption 
amount exceeds $500,000 but does not exceed $1,000,000, the tax is 2% of the 
amount that exceeds the Maine exemption amount; 
C.  If the amount of the Maine taxable estate that exceeds the Maine exemption 
amount exceeds $1,000,000 but does not exceed $1,500,000, the tax is 3% of the 
amount that exceeds the Maine exemption amount; 
D.  If the amount of the Maine taxable estate that exceeds the Maine exemption 
amount exceeds $1,500,000 but does not exceed $2,000,000, the tax is 4% of the 
amount that exceeds the Maine exemption amount; 
E.  If the amount of the Maine taxable estate that exceeds the Maine exemption 
amount exceeds $2,000,000 but does not exceed $2,500,000, the tax is 5% of the 
amount that exceeds the Maine exemption amount; 
F.  If the amount of the Maine taxable estate that exceeds the Maine exemption 
amount exceeds $2,500,000 but does not exceed $3,000,000, the tax is 6% of the 
amount that exceeds the Maine exemption amount; 
G.  If the amount of the Maine taxable estate that exceeds the Maine exemption 
amount exceeds $3,000,000 but does not exceed $3,500,000, the tax is 7% of the 
amount that exceeds the Maine exemption amount; 
H.  If the amount of the Maine taxable estate that exceeds the Maine exemption 
amount exceeds $3,500,000 but does not exceed $4,000,000, the tax is 8% of the 
amount that exceeds the Maine exemption amount; 
I.  If the amount of the Maine taxable estate that exceeds the Maine exemption 
amount exceeds $4,000,000 but does not exceed $4,500,000, the tax is 9% of the 
amount that exceeds the Maine exemption amount; 
J.  If the amount of the Maine taxable estate that exceeds the Maine exemption 
amount exceeds $4,500,000 but does not exceed $5,000,000, the tax is 10% of the 
amount that exceeds the Maine exemption amount; 
K.  If the amount of the Maine taxable estate that exceeds the Maine exemption 
amount exceeds $5,000,000 but does not exceed $5,500,000, the tax is 11% of the 
amount that exceeds the Maine exemption amount; and 
L.  If the amount of the Maine taxable estate that exceeds the Maine exemption 
amount exceeds $5,500,000, the tax is 12% of the amount that exceeds the Maine 
exemption amount. 
3.  Other jurisdiction death tax credit.  A credit against the tax imposed by this 
section is allowed for all constitutionally valid estate, inheritance, legacy and succession 
taxes actually paid to another jurisdiction upon the value of real or tangible personal 
property owned by the decedent or subject to those taxes as a part of or in connection 
with the estate and located in that jurisdiction if the value of that property is also included 
in the value of the decedent’s intangible personal property subject to taxation under this 
section. The credit provided by this subsection may not exceed the amount of tax 
otherwise due multiplied by a fraction, the numerator of which is the value of the 
property located in the other taxing jurisdiction subject to this credit on which tax was 
actually paid and the denominator of which is the value of the decedent's federal gross 
estate. 
§4104.  Tax on estate of nonresident 
1.  Imposition of tax.  A tax is imposed on the transfer of all real and tangible 
personal property situated in this State and owned by a nonresident who dies after 
December 31, 2010. When real or tangible personal property has been transferred into a 
trust or a limited liability company or other pass-through entity, the tax imposed by this 
section applies as if the pass-through entity did not exist and the property was owned 
personally by the decedent. 
2.  Calculation of tax.  The amount of the tax under this section is determined by 
computing the tax that would have been due had the decedent been a resident whose total 
estate wherever situated was subject to the Maine estate tax and multiplying that amount 
by a fraction, the numerator of which is the value on the date of death of the decedent's 
real and tangible personal property situated in this State and the denominator of which is 
the sum of the decedent's federal gross estate plus the 2 adjustments described in section 
4102, subsection 6, paragraphs C and D.  This calculation of tax is not affected by 
whether the specific real or tangible personal property situated in this State is marital 
deduction property. 
3.  Proceeds from sale of property.  Proceeds from the sale of property are taxable 
under this section if those proceeds are included in the modified federal gross estate 
described in subsection 2 and the sale was made in contemplation of death.  A sale of 
property made within 6 months prior to the death of the grantor is deemed to be in 
contemplation of death within the meaning of this section. 
§4105.  Personal representative's liability for tax 
1.  Payment of tax.  The tax imposed by this chapter must be paid by the personal 
representative to the extent of assets subject to the personal representative's control.  The 
assessor may accept payment of estate taxes in works of art in accordance with Title 27, 
chapter 2, subchapter 2. 
2.  Certification of payment.  A final account of a personal representative of an 
estate may not be allowed by the Probate Court unless the personal representative has 
filed in the Probate Court a certificate of the assessor showing either that the amount of 
tax has been paid, that payment has been secured as provided in section 4108 or that no 
tax is due. 
§4106.  Discharge of personal representative's personal liability 
If the personal representative makes a written application, accompanied by a copy of 
the final determination of the federal estate tax liability, if any, and other supporting 
documentation that the assessor may require, to the assessor for determination of the 
amount of the tax and discharge of personal liability for that tax, the assessor, as soon as 
possible and in any event within one year after the making of the application or, if the 
application is made before the return is filed, within one year after the return is filed, shall 
notify the personal representative of the amount of the tax and of any interest on that 
amount.  The personal representative, on payment of that amount, is discharged from 
personal liability for any deficiency in tax subsequently found to be due and is entitled to 
a certificate of discharge.  
§4107.  Tax due date; filing of return and payment of tax 
1.  Date due.  Except as otherwise provided by this chapter, a return required by this 
section is due 9 months after the date of the decedent's death and any tax due under this 
chapter is due at the same time. Interest accrues on any amount of tax not paid by the due 
date. 
2.  Return required.  The personal representative shall file a Maine estate tax return 
whenever: 
A.  The Code requires that a federal estate tax return be filed; or 
B.  The federal gross estate, increased by the amount of adjusted taxable gifts made 
by the decedent after December 31, 1976 and by the aggregate amount of any specific 
gift tax exemption under former Code, Section 2521 used by the decedent after 
September 8, 1976 exceed the Maine exemption amount. 
The return must be in the form prescribed by the assessor, and it must be accompanied by 
a copy of the federal estate tax return, if any, and by other supporting documentation that 
the assessor may require. 
3.  No tax liability.  In all cases where a Maine estate tax return is not required to be 
filed: 
A.  If the personal representative makes no election pursuant to section 4102, 
subsection 5, paragraph C, the personal representative, surviving joint tenant of real 
estate or any other person whose real estate might be subject to a lien for taxes 
pursuant to this chapter may at any time file with the assessor in the form prescribed 
by the assessor a statement of the value of the federal gross estate; and 
B.  If the personal representative makes an election pursuant to section 4102, 
subsection 5, paragraph C, the personal representative shall make the election on a 
timely filed return.  The return must be in the form prescribed by the assessor, and it 
must be accompanied by a copy of the federal estate tax return, if any, and other 
supporting documentation that the assessor may require, including documentation 
related to an election made pursuant to section 4102, subsection 5, paragraph C.  
§4108.  Extension of due date for payment of tax 
The assessor may extend the time for payment of the tax or any part of the tax for a 
reasonable period of time not to exceed one year from the date fixed for payment and 
may grant successive extensions. The aggregate of extensions with respect to any estate 
may not exceed 10 years, unless a longer period is called for by a payment arrangement 
elected pursuant to section 4109. If an extension is granted, the assessor may require the 
taxpayer to: 
1.  Bond.  Give a bond to the Treasurer of State in an amount the assessor determines 
necessary; or 
2.  Other security.  Deposit with the Treasurer of State bonds or other negotiable 
obligations of governmental entities with an aggregate value sufficient to adequately 
secure payment of the tax. 
§4109.  Extension of time for payment of estate tax when estate consists largely of 
interest in closely held business 
1.  Deferred payment arrangement.  If the United States Internal Revenue Service 
has approved a federal estate tax deferral and installment payment arrangement under the 
Code, Section 6166, the personal representative may elect a similar deferred payment 
arrangement under this section for payment of the tax imposed by this chapter, subject to 
acceptance by the assessor. The assessor may approve a deferral and installment 
arrangement under similar circumstances and on similar terms with respect to an estate of 
a decedent dying after December 31, 2010 that does not incur a federal estate tax. 
2.  Time and manner of election; rejection by assessor.  An election under this 
section may be made by attaching a payment deferral election in a form prescribed by the 
assessor to a timely filed Maine estate tax return, in addition to any documentation 
required by section 4107 and copies of all documentation required by the United States 
Internal Revenue Service and submitted in support of a federal payment deferral.  
Documentation submitted to the assessor must clearly indicate the amount of Maine 
estate tax and interest to be paid in installments; the number of separate installments; and 
the due date of each installment payment.  The assessor may reject the election. An 
election not rejected in writing by the assessor within 60 days after the election is made is 
considered accepted. 
3.  Interest and penalties.  The amount of Maine estate tax deferred under this 
section is subject to interest pursuant to section 186. Interest payable on the unpaid tax 
attributable to a 5-year deferral period pursuant to the Code, Section 6166 must be paid 
annually.  Interest payable on any unpaid tax attributable to any period after the 5-year 
deferral period must be paid annually at the same time as, and as part of, each installment 
payment of the tax.  If any payment of principal or interest under this section is not made 
on or before the due date, the penalties provided by section 187-B apply. 
§4110.  Extension of time for filing return 
1.  General.  The assessor may grant a reasonable extension of time for filing a return 
required by this chapter on terms and conditions as the assessor may require as long as 
payment reasonably estimating the tax due has been made on or before the original 
payment due date.  Except as provided in subsection 2, an extension for filing any return 
may not exceed 8 months. 
2.  Federal extension.  When an extension of time is granted within which to file a 
federal estate tax return, the due date for filing the Maine estate tax return is 
automatically extended for an equivalent period, as long as payment reasonably 
estimating the tax due has been made on or before the original payment due date. 
§4111.  Effect of federal determination 
1.  Final federal determination.  Except as provided in subsection 2, a final federal 
determination as to any of the following issues also determines the same issue for 
purposes of the tax under this chapter: 
A.  The inclusion in the federal gross estate of any item of property or interest in 
property; and 
B.  The allowance of any item claimed as a deduction from the federal gross estate. 
2.  State determination of certain estates.  The assessor is not bound by a final 
federal determination under subsection 1 if the assessor determines the issue for purposes 
of the tax under this chapter within one year of the date the return was filed or the date 
the return is due, whichever is later. 
3.  Items entering computation of tax.  If there has been a final federal 
determination with respect to a decedent's federal estate tax, any item, but not its value, 
entering into the computation of the tax is deemed to have been the subject of the final 
federal determination, whether or not specifically adjusted thereby. 
4.  Definition.  For purposes of this section, "final federal determination" means: 
A.  A decision by the United States Tax Court or a judgment, decree or other order by 
any court of competent jurisdiction that has become final; 
B.  A final disposition by the United States Secretary of the Treasury or the 
secretary's delegate of a claim for a refund.  The disposition is deemed to have 
occurred: 
(1) As to items of the claim that are allowed, upon allowance of a refund or upon 
disallowance of the claim by reason of offsetting items; and 
(2) As to items of the claim that are disallowed or as to items applied by the 
United States Secretary of the Treasury or the secretary's delegate as an offset 
against the claim, upon expiration of the time for instituting suit for refund with 
respect to those items, unless suit is instituted before the expiration of that time, 
or upon filing with the assessor a written statement that suit will not be instituted; 
C.  A closing agreement made under the Code, Section 7121; 
D.  An assessment pursuant to a waiver of restrictions on assessment or a notification 
in writing issued by the United States Secretary of the Treasury or the secretary's 
delegate that the federal estate tax return has been accepted as filed, unless the 
personal representative notifies the assessor that a claim for refund of federal estate 
taxes has been or will be filed; or 
E.  An assessment pursuant to a compromise entered into by the personal 
representative and the United States Secretary of the Treasury or the secretary's 
delegate. 
§4112.  Lien for taxes 
All property subject to taxes under this chapter, in whatever form of investment it 
may happen to be, is charged with a lien for all taxes, interest and penalties that are or 
may become due on that property.  The lien does not attach to any real or personal 
property after the property has been sold or disposed of for value by the personal 
representative, trustee or surviving joint tenant.  Upon payment of those taxes, interest 
and penalties due under this chapter or upon determination that no tax is due, the assessor 
shall upon request execute a discharge of the tax lien for recording in the appropriate 
registry or registries of deeds. 
§4113.  Authority of State Tax Assessor 
The assessor shall collect all taxes, interest and penalties provided by chapter 7 and 
by this chapter and may institute proceedings of any nature necessary or desirable for that 
purpose, including proceedings for the removal of personal representatives and trustees 
who have failed to pay the taxes due from estates in their hands. 
The assessor may enforce the collection of any taxes secured by bond in a civil action 
brought on the bond regardless of the fact that some other official may be named as 
obligee in the bond. 
§4114.  Amount of tax determined 
The assessor shall determine the amount of tax due and payable under this chapter 
upon any estate or part of that estate.  If, after determination and certification of the full 
amount of the tax upon an estate or any interest in or part of an estate, the estate receives 
or becomes entitled to property in addition to that shown in the estate tax return filed with 
the assessor or the United States Internal Revenue Service changes any item increasing 
the estate's liability shown in the Maine estate tax return filed with the assessor, the 
personal representative shall within 180 days of any receipt, entitlement or change file an 
amended Maine estate tax return.  The assessor shall determine the amount of additional 
tax and shall certify the amount due, including interest and penalties, to the person by 
whom the tax is payable. 
§4115.  Authority to make refunds 
1.  Refund.  A personal representative or responsible party otherwise liable for the 
tax imposed by this chapter may request a refund of any tax imposed by this chapter 
within 3 years from the date the Maine estate tax return was filed or 3 years from the date 
the tax was paid, whichever period expires later.  A claim for refund must be submitted to 
the assessor in writing and must state the specific grounds upon which the claim is 
founded.  The claimant may in writing request an informal conference regarding the 
claim for refund pursuant to section 151. 
2.  Limitation on payment of interest. Interest may not be paid by the assessor on 
an overpayment of the tax imposed by this chapter that is refunded within 60 days after 
the date prescribed or permitted by extension of time for filing the Maine estate tax return 
or within 60 days after the return is filed or within 60 days after a return requesting a 
refund of the overpayment is filed, whichever is later. 
§4116.  Appointment of personal representative on probate delay 
If, upon the death of a person leaving an estate that may be liable to pay tax under 
this chapter, a will is not offered for probate or an application for administration is not 
made within 6 months after the date of death or if the personal representative does not 
qualify within that period, the Probate Court, upon application by the assessor, may 
appoint a personal representative.  Nothing may prevent the assessor from petitioning for 
appointment within 6 months after the date of death, if in the opinion of the assessor that 
action is necessary. 
§4117.  Persons liable 
Personal representatives, trustees, grantees or donees under nonexempt conveyances 
or nonexempt gifts made during the life of the grantor or donor and persons to whom 
beneficial interests accrue by survivorship are liable for the taxes imposed by this chapter 
with interest, as provided, until the taxes are paid.  For purposes of this section, 
"nonexempt conveyances" and "nonexempt gifts" mean any transfer to a person that is 
includable in the federal gross estate of the decedent and with respect to which no 
deduction is allowed in computing the federal estate tax liability. 
If the tax or any part of the tax is paid or collected out of that part of the estate 
passing to or in possession of any person other than the personal representative in that 
capacity, that person is entitled to a reimbursement out of any part of the estate still 
undistributed or by a just and equitable contribution by the person whose interest in the 
estate of the decedent would have been reduced if the tax had been paid before the 
distribution of the estate or whose interest in the estate is subject to an equal or prior 
liability for the payment of tax, debts or other charges against the estate. 
§4118.  Civil action by state; bond 
Personal representatives are liable to the State on their administration bonds for all 
taxes assessable under this chapter and interest on those taxes.  If no administration bond 
is otherwise required and except as otherwise provided in this section, the judge of 
probate, notwithstanding any provision of Title 18-A, shall require a bond payable to the 
judge or the judge's successor sufficient to secure the payment of all estate taxes and 
interest conditioned in substance to pay all estate taxes due to the State from the estate of 
the deceased with interest thereon. A bond to secure the payment of estate taxes is not 
required when the judge of probate finds that any estate tax due and to become due the 
State is reasonably secured by the lien upon real estate as provided in this chapter or by 
any other adequate security. An action for the recovery of estate taxes and interest lies on 
either of the bonds. 
SUMMARY 
This bill provides a different method of calculation of the Maine estate tax.  Instead 
of calculating the estate tax based on prior federal law, the bill establishes a progressive 
rate structure for estates that exceed an exemption amount of $1,000,000 for persons who 
die after December 31, 2010.