An Act To Impose a Temporary One Percent Sales Tax for Education and Revenue Sharing
Maine Legislature, Session 126, LD 1477
Committee: Taxation
Sponsors: GIDEON, HAMANN, RYKERSON, TIPPING-SPITZ
Amends: 36 MRSA §1811-C, 36 MRSA §1812, 36 MRSA §1861

Legislative Document 
No. 1477 
H.P. 1058 
House of Representatives, April 30, 2013 
An Act To Impose a Temporary One Percent Sales Tax for 
Education and Revenue Sharing 
Reference to the Committee on Taxation suggested and ordered printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative GIDEON of Freeport. 
Cosponsored by Representatives: HAMANN of South Portland, RYKERSON of Kittery, 
TIPPING-SPITZ of Orono. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  36 MRSA §1811-C is enacted to read: 
§1811-C.  Additional sales and use tax; use of revenue; contingent decrease 
1.  Additional sales and use tax.  In addition to the tax imposed pursuant to section 
1811, a tax is imposed on the value of all tangible personal property and taxable services 
sold at retail in this State that are taxed at the rate of 5% pursuant to section 1811.  The 
rate of tax is 1% unless adjusted pursuant to subsection 3.  The tax imposed by this 
subsection must be collected and remitted in the same manner as the 5% tax imposed 
pursuant to section 1811 and is subject to all the requirements of this Part. 
2.  Application of revenues.  Notwithstanding Title 30-A, section 5681, subsection 5 
or any other law to the contrary, revenue from the tax imposed and collected pursuant to 
subsection 1 must be credited to a General Fund suspense account.  Beginning  
November 10, 2013 and no later than the 10th of every month thereafter, the State 
Controller shall transfer 70% of the revenues received by the State Tax Assessor during 
the preceding month pursuant to the tax imposed by subsection 1 to general purpose aid 
for local schools within the Department of Education and 30% to the Local Government 
Fund as provided by Title 30-A, section 5681, subsection 5 except that, if the revenue 
received during a fiscal year exceeds $280,000,000, the amount of revenue in excess of 
$280,000,000 must be transferred to the Local Government Fund as provided by Title 
30-A, section 5681, subsection 5.  Revenue generated pursuant to this section may be 
used only for the purposes specified in this subsection. 
3.  Contingent decrease in rate.  The tax imposed pursuant to subsection 1 is subject 
to a decrease in rate pursuant to this subsection. 
A.  Beginning in 2015 and every year thereafter, on or before May 15th of each year, 
the State Budget Officer shall present a final estimate of General Fund revenues for 
the current fiscal year, taking into consideration an estimate of the Revenue 
Forecasting Committee under Title 5, section 1710-E, to the joint standing committee 
of the Legislature having jurisdiction over taxation matters. 
B.  If General Fund revenues for any fiscal year, as determined by the State 
Controller at the close of the fiscal year, exceed those of the previous fiscal year by 
8% or more, on a base-to-base comparison excluding one-time revenue gains and 
losses, the tax on the sale of personal property and taxable services imposed pursuant 
to subsection 1 must decrease to 0.5%, unless the tax rate is 0.5%, in which case the 
tax is eliminated, on the subsequent October 1st, unless the Legislature takes action to 
prevent the reduction. 
4.  Sales tax exemption commission.  Following a decrease pursuant to subsection 3 
in the rate of tax on the sale of personal property and taxable services imposed pursuant 
to subsection 1, the joint standing committee of the Legislature having jurisdiction over 
taxation matters, with assistance from the State Tax Assessor and the State Budget 
Officer, shall review statutory exemptions from the sales and use tax imposed pursuant to 
this Part and determine whether those statutory exemptions serve a purpose beneficial to 
the State that outweighs the cost of the exemptions.  The joint standing committee may 
report out legislation regarding the review to a first or second regular session of the 
Legislature. 
Sec. 2.  36 MRSA §1812, sub-§1, ¶A-3 is enacted to read: 
A-3.  If the tax rate is 6%: 
Sec. 3.  36 MRSA §1861, as amended by PL 1995, c. 640, §6, is further amended 
to read: 
§1861.  Imposition 
A tax is imposed, at the respective rate provided in section 1811 and section 1811-C, 
on the storage, use or other consumption in this State of tangible personal property or a 
service, the sale of which would be subject to tax under section 1764 or, 1811 or 1811-C.  
Every person so storing, using or otherwise consuming is liable for the tax until the 
person has paid the tax or has taken a receipt from the seller, as duly authorized by the 
assessor, showing that the seller has collected the sales or use tax, in which case the seller 
is liable for it.  Retailers registered under section 1754-B or 1756 shall collect the tax and 
make remittance to the assessor.  The amount of the tax payable by the purchaser is that 
provided in the case of sales taxes by section 1812.  When tangible personal property 
purchased for resale is withdrawn from inventory by the retailer for the retailer's own use, 
use tax liability accrues at the date of withdrawal. 
Sec. 4.  Effective date.  This Act takes effect October 1, 2013. 
SUMMARY 
This bill imposes an additional 1% sales and use tax on items of personal property 
and taxable services currently subject to the 5% sales and use tax.  The additional tax is 
collected and remitted and is subject to the same requirements as the 5% sales and use 
tax.  Of the revenue generated by the 1% sales and use tax, 70% is transferred to general 
purpose aid for local schools and 30% is transferred to the Local Government Fund to be 
used for revenue sharing.  If the amount of revenue generated in a fiscal year exceeds 
$280,000,000, the excess amount is transferred for revenue sharing. 
The additional 1% sales and use tax may be decreased to 0.5% and then eliminated if 
General Fund revenues for any fiscal year, as determined by the State Controller at the 
Amount of Sale Price  
Amount of Tax 
$0.01 to $0.09, inclusive 
0¢ 
.10 to .16, inclusive  
1¢ 
.17 to .33, inclusive 
2¢ 
.34 to .50, inclusive 
3¢ 
.51 to .66, inclusive  
4¢ 
.67 to .83, inclusive 
5¢ 
.84 to 1.00, inclusive 
6¢ 
close of the fiscal year, exceed those of the previous fiscal year by 8% or more for that 
fiscal year. 
This bill requires the joint standing committee of the Legislature having jurisdiction 
over taxation matters, each time the additional sales and use tax is decreased, to examine 
the sales tax exemptions and determine whether those sales tax exemptions serve a 
purpose beneficial to the State that outweighs the cost of those sales tax exemptions.