An Act To Provide Funding for Public Education by Increasing the Sales Tax
Maine Legislature, Session 126, LD 1297
Committee: Taxation
Sponsors: CHENETTE, GOODE, NOON, PLANTE, RYKERSON
Amends: 20-A MRSA §15752-A, 36 MRSA §1811

Legislative Document 
No. 1297 
H.P. 924 
House of Representatives, April 2, 2013 
An Act To Provide Funding for Public Education by Increasing the 
Sales Tax 
Reference to the Committee on Taxation suggested and ordered printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative CHENETTE of Saco. 
Cosponsored by Representatives: GOODE of Bangor, NOON of Sanford, PLANTE of 
Berwick, RYKERSON of Kittery. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  20-A MRSA §15752-A is enacted to read: 
§15752-A.  State funding for mandated legislative appropriations for kindergarten 
to grade 12 education 
By June 30, 2014 and annually thereafter, the State Controller shall credit to the 
department an amount that, as certified by the State Tax Assessor, is equivalent to 2/17 of 
the 5 2/3% tax imposed on the value of tangible personal property and taxable services 
pursuant to Title 36, section 1811.  That amount must be used to supplement and not to 
supplant funding for essential programs and services for kindergarten to grade 12 
education under chapter 606-B. 
Sec. 2.  36 MRSA §1811, first ¶, as amended by PL 2011, c. 209, §4 and affected 
by §5, is further 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, 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, 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% 5 2/3% 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. 
Sec. 3.  Report and recommendations.  No later than January 1, 2016, the  
Department of Administrative and Financial Services, Bureau of Revenue Services and 
the Department of Education shall each evaluate the effect of the increase of the sales tax 
under this Act on the funding for essential programs and services for kindergarten to 
grade 12 education under the Maine Revised Statutes, Title 20-A, chapter 606-B and 
submit a joint report that includes the findings of the evaluations and provides 
recommendations to the joint standing committee of the Legislature having jurisdiction 
over taxation matters and the joint standing committee of the Legislature having 
jurisdiction over education matters.  The report must include justification for any 
recommendations with respect to continuing the increase in the sales tax and any 
recommendations with respect to other alternatives for funding for essential programs and 
services for kindergarten to grade 12 education under Title 20-A, chapter 606-B.  The 
joint standing committee of the Legislature having jurisdiction over taxation matters and 
the joint standing committee of the Legislature having jurisdiction over education matters 
have authority to jointly submit a bill to the Second Regular Session of the 127th 
Legislature. 
Sec. 4.  Effective date.  This Act takes effect October 1, 2013. 
SUMMARY 
This bill raises the sales tax from 5% to 5 2/3% and uses the funds to assist the State 
in providing at least 55% of the cost of the total allocation for kindergarten to grade 12 
education from General Fund revenue sources.  The bill also requires the Department of 
Administrative and Financial Services, Bureau of Revenue Services and the Department 
of Education to evaluate the effect of the increase of the sales tax on the funding for 
essential programs and services for kindergarten to grade 12 education and report their 
findings and recommendations to the joint standing committee of the Legislature having 
jurisdiction over taxation matters and the joint standing committee of the Legislature 
having jurisdiction over education matters.