An Act To Improve Priority of Tax Liens and the Collection of Sales Taxes
Maine Legislature, Session 127, LD 1672
Committee: Taxation
Sponsors: McCORMICK, GOODE
Amends: 36 MRSA §175-A, 36 MRSA §177, 36 MRSA §191, 36 MRSA §5122, 36 MRSA §5124-B, 36 MRSA §5125, 36 MRSA §5242, 36 MRSA §5403

Legislative Document 
No. 1672 
S.P. 684 
In Senate, March 23, 2016 
An Act To Improve Priority of Tax Liens and the Collection of Sales 
Taxes 
Reference to the Committee on Taxation suggested and ordered printed. 
HEATHER J.R. PRIEST 
Secretary of the Senate 
Presented by Senator McCORMICK of Kennebec.  (GOVERNOR'S BILL) 
Cosponsored by Representative: GOODE of Bangor. 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-1.  36 MRSA §175-A, sub-§1, as amended by PL 1999, c. 699, Pt. D, §26 
and affected by §30, is further amended to read: 
1.  Filing.  If Before August 1, 2016, if any tax imposed by this Title or imposed by 
any other provision of law and authorized to be collected by the bureau is not paid when 
due and no further administrative or judicial review of the assessment is available 
pursuant to law, the assessor may file in the registry of deeds of any county, with respect 
to real property, or in the office of the Secretary of State, with respect to property of a 
type a security interest in which may be perfected by a filing in such office under Title 
11, Article 9-A, a notice of lien specifying the amount of the tax, interest, penalty and 
costs due, the name and last known address of the person liable for the amount and, in the 
case of a tax imposed by this Title, the fact that the assessor has complied with all the 
provisions of this Title in the assessment of the tax.  The lien arises at the time the 
assessment becomes final and constitutes a lien upon all property, whether real or 
personal, then owned or thereafter acquired by that person in the period before the 
expiration of the lien.  The lien imposed by this section is not valid against any 
mortgagee, pledgee, purchaser, judgment creditor or holder of a properly recorded 
security interest until notice of the lien has been filed by the assessor, with respect to real 
property, in the registry of deeds of the county where such property is located and, with 
respect to personal property, in the office in which a financing statement for such 
personal property is normally filed.  Notwithstanding this subsection, a tax lien upon 
personal property does not extend to those types of personal property not subject to 
perfection of a security interest by means of the filing in the office of the Secretary of 
State.  The lien is prior to any mortgage or security interest recorded, filed or otherwise 
perfected after the notice, other than a purchase money security interest perfected in 
accordance with Title 11, Article 9-A.  In the case of any mortgage or security interest 
properly recorded or filed prior to the notice of lien that secures future advances by the 
mortgagee or secured party, the lien is junior to all advances made within 45 days after 
filing of the notice of lien, or made without knowledge of the lien or pursuant to a 
commitment entered into without knowledge of the lien.  Subject to the limitations in this 
section, the lien provided in this section subsection has the same force, effect and priority 
as a judgment lien and continues for 10 years from the date of recording unless sooner 
released or otherwise discharged.  The lien may, within the 10-year period, or within 10 
years from the date of the last extension of the lien in the manner provided in this 
subsection, be extended by filing for record in the appropriate office a copy of the notice 
and, from the time of filing, that lien must be extended for 10 years unless sooner 
released or otherwise discharged. 
This subsection applies to assessments made before August 1, 2016. 
Sec. A-2.  36 MRSA §175-A, sub-§1-A is enacted to read: 
1-A.  Filing of tax lien.  Beginning August 1, 2016, if any tax imposed by this Title 
or any tax imposed by any other provision of law and authorized to be collected by the 
bureau is not paid when due and no further administrative or judicial review of the 
assessment is available pursuant to law, the amount of the assessment, including the tax, 
interest, penalties and costs, is a lien in favor of the assessor.  The lien arises at the time 
the assessment is made and constitutes a lien upon all property, whether real or personal, 
owned by the person liable for the assessment at the time the lien arises or acquired by 
that person in the period after the lien arises until the expiration of the lien.  The assessor 
may file in the registry of deeds of any county, with respect to real property, or in the 
office of the Secretary of State, with respect to property of a type for which a security 
interest may be perfected by a filing in such office under Title 11, Article 9-A, a notice of 
lien specifying the amount of the tax, interest, penalties and costs due, the name and last 
known address of the person liable for the amount and, in the case of a tax imposed by 
this Title, the fact that the assessor has complied with all the provisions of this Title in the 
assessment of the tax.  Filing of the lien by the assessor constitutes notice of lien for, and 
secures payment of, both the original assessment and all subsequent assessments of tax 
against the same person, until such time as the lien is released or otherwise discharged as 
provided for in this section.  The lien imposed by this section is not valid against any 
mortgagee, pledgee, purchaser, judgment creditor or holder of a properly recorded 
security interest until notice of the lien has been filed by the assessor, with respect to real 
property, in the registry of deeds of the county where such property is located and, with 
respect to personal property, in the office in which a financing statement for such 
personal property is normally filed.  Notwithstanding this subsection, a tax lien upon 
personal property does not extend to those types of personal property not subject to 
perfection of a security interest by means of the filing in the office of the Secretary of 
State.  The lien is prior to any mortgage or security interest recorded, filed or otherwise 
perfected after the notice, other than a purchase-money security interest perfected in 
accordance with Title 11, Article 9-A.  In the case of any mortgage or security interest 
properly recorded or filed prior to the notice of lien that secures future advances by the 
mortgagee or secured party, the lien is junior to all advances made within 45 days after 
filing of the notice of lien, or made without knowledge of the lien or pursuant to a 
commitment entered into without knowledge of the lien.  Subject to the limitations in this 
section, the lien provided in this subsection has the same force, effect and priority as a 
judgment lien and continues for 10 years from the date of recording unless sooner 
released or otherwise discharged.  The lien may, within the 10-year period, or within 10 
years from the date of the last extension of the lien in the manner provided in this 
subsection, be extended by filing for record in the appropriate office a copy of the notice 
and, from the time of filing, that lien must be extended for 10 years unless sooner 
released or otherwise discharged.  If the lien is extended within the 10-year period, or 
within 10 years from the date of the last extension of the lien as provided for in this 
subsection, the extended lien relates back to the date the lien was first filed. 
This subsection applies to assessments made on or after August 1, 2016. 
Sec. A-3.  36 MRSA §175-A, sub-§3, as amended by PL 1997, c. 526, §10, is 
further amended to read: 
3.  Enforcement.  The lien provided for by subsection 1 or subsection 1-A may be 
enforced at any time after the tax liability with respect to which the lien arose becomes 
collectible under section 173, subsection 1 by a civil action brought by the Attorney 
General in the name of the State in the Superior Court of the county in which the property 
is located to subject any property, of whatever nature, in which the taxpayer has any right, 
title or interest, to the payment of such tax or liability.  The court shall, after the parties 
have been duly notified of the action, proceed to adjudicate all matters involved in the 
action and finally determine the merits of all claims to and liens upon the property and, in 
all cases where a claim or interest of the State therein is established, may decree a sale of 
the property by the proper officer of the court and a distribution of the proceeds of such 
sale according to the findings of the court.  If the property is sold to satisfy a lien held by 
the State, the State may bid at the sale such sum, not exceeding the amount of that lien 
plus expenses of sale, as the assessor directs. 
Sec. A-4.  36 MRSA §175-A, sub-§4, as corrected by RR 1997, c. 1, §28, is 
amended to read: 
4.  Recording fees part of tax liability.  Fees paid by the assessor to registrars of 
deeds for recording notices of lien pursuant to subsection 1 or subsection 1-A and notices 
of release of a lien pursuant to subsection 2 may be added to the tax liability that gave rise 
to the lien and, in the case of a tax imposed by this Title, may be collected by all the 
methods provided for in chapter 7.  In the case of other obligations owed to the State and 
authorized to be collected by the bureau, the fees may be collected by any collection 
method authorized by this section or section 176-A. 
Sec. A-5.  36 MRSA §177, sub-§1, as amended by PL 1999, c. 708, §9, is further 
amended to read: 
1.  Generally.  All sales and use taxes collected by a person pursuant to Part 3, all 
taxes collected by a person under color of Part 3 that have not been properly returned or 
credited to the persons from whom they were collected, all taxes collected by or imposed 
on a person pursuant to chapter 451 or 459, all fees collected pursuant to chapter 719 and 
all taxes collected by a person pursuant to chapter 827 constitute a special fund in trust 
for the State Tax Assessor.  The liability for the taxes or fees and the interest or penalty 
on taxes or fees is enforceable by assessment and collection, in the manner prescribed in 
this Part, against the person and against any officer, director, member, agent or employee 
of that person who, in that capacity, is responsible for the control or management of the 
funds or finances of that person or is responsible for the payment of that person's taxes.  
An assessment against a responsible individual pursuant to this section must be made 
within 6 years from the date on which the return on which the taxes were required to be 
reported was filed.  An assessment pursuant to this section may be made at any time with 
respect to a time period for which a return has become due but has not been filed. 
Sec. A-6.  36 MRSA §177, sub-§1-A is enacted to read: 
1-A.  Responsible individual liability for uncollected tax.  The liability for all sales 
and use taxes required to be collected pursuant to Part 3 but not collected or paid and all 
taxes imposed pursuant to chapter 451 or 459 but not collected or paid, along with the 
interest or penalty on the taxes, is enforceable by assessment and collection against a 
responsible individual in accordance with subsection 1. 
Sec. A-7.  36 MRSA §191, sub-§2, ¶Y, as amended by PL 2003, c. 390, §2, is 
further amended to read: 
Y.  The disclosure by the State Tax Assessor, upon request in writing of any 
individual against whom an assessment has been made pursuant to section 177, 
subsection 1 or subsection 1-A, of the following information: 
(1)  Information regarding the underlying tax liability to the extent necessary to 
apprise the individual of the basis of the assessment; 
(2)  The name of any other individual against whom an assessment has been 
made for the same underlying tax debt; and 
(3)  The general nature of any steps taken by the assessor to collect the 
underlying tax debt from any other individuals and the amount collected; 
PART B 
Sec. B-1.  36 MRSA §5122, sub-§1, ¶JJ, as amended by PL 2015, c. 388, Pt. A, 
§4, is repealed. 
Sec. B-2.  36 MRSA §5124-B, first ¶, as enacted by PL 2015, c. 267, Pt. DD, 
§14, is amended to read: 
For tax years beginning on or after January 1, 2016, the standard deduction of a 
resident individual is equal to the sum of the basic standard deduction and any additional 
standard deduction, subject to the phase-out under subsection 3. 
Sec. B-3.  36 MRSA §5124-B, sub-§3 is enacted to read: 
3.  Phase-out.  The total standard deduction of the taxpayer determined in accordance 
with subsections 1 and 2 must be reduced by an amount equal to the total standard 
deduction multiplied by the following fraction: 
A.  For single individuals and married persons filing separate returns, the numerator 
is the taxpayer's Maine adjusted gross income less $70,000, except that the numerator 
may not be less than zero, and the denominator is $75,000. In no case may the 
fraction contained in this paragraph produce a result that is more than one. The 
$70,000 amount used to calculate the numerator in this paragraph must be adjusted 
for inflation in accordance with section 5403, subsection 4; 
B.  For individuals filing as heads of households, the numerator is the taxpayer's 
Maine adjusted gross income less $105,000, except that the numerator may not be 
less than zero, and the denominator is $112,500. In no case may the fraction 
contained in this paragraph produce a result that is more than one. The $105,000 
amount used to calculate the numerator in this paragraph must be adjusted for 
inflation in accordance with section 5403, subsection 4; or 
C.  For individuals filing married joint returns or surviving spouses, the numerator is 
the taxpayer's Maine adjusted gross income less $140,000, except that the numerator 
may not be less than zero, and the denominator is $150,000. In no case may the 
fraction contained in this paragraph produce a result that is more than one. The 
$140,000 amount used to calculate the numerator in this paragraph must be adjusted 
for inflation in accordance with section 5403, subsection 4. 
Sec. B-4.  36 MRSA §5125, sub-§6 is enacted to read: 
6.  Phase-out.  For tax years beginning on or after January 1, 2016, the total itemized 
deductions of the taxpayer determined in accordance with subsections 1 to 4 must be 
reduced by an amount equal to the total itemized deductions multiplied by the following 
fraction: 
A.  For single individuals and married persons filing separate returns, the numerator 
is the taxpayer's Maine adjusted gross income less $70,000, except that the numerator 
may not be less than zero, and the denominator is $75,000. In no case may the 
fraction contained in this paragraph produce a result that is more than one. The 
$70,000 amount used to calculate the numerator in this paragraph must be adjusted 
for inflation in accordance with section 5403, subsection 4; 
B.  For individuals filing as heads of households, the numerator is the taxpayer's 
Maine adjusted gross income less $105,000, except that the numerator may not be 
less than zero, and the denominator is $112,500. In no case may the fraction 
contained in this paragraph produce a result that is more than one. The $105,000 
amount used to calculate the numerator in this paragraph must be adjusted for 
inflation in accordance with section 5403, subsection 4; or 
C.  For individuals filing married joint returns or surviving spouses, the numerator is 
the taxpayer's Maine adjusted gross income less $140,000, except that the numerator 
may not be less than zero, and the denominator is $150,000. In no case may the 
fraction contained in this paragraph produce a result that is more than one. The 
$140,000 amount used to calculate the numerator in this paragraph must be adjusted 
for inflation in accordance with section 5403, subsection 4. 
Sec. B-5.  36 MRSA §5242, as amended by PL 1995, c. 639, §23, is further 
amended to read: 
§5242.  Information returns 
The State Tax Assessor may require returns of information to be made and filed on or 
before February 28th January 31st of each year by a person making payment or crediting 
in a calendar year the amounts of $600 or more ($10 or more in the case of interest or 
dividends) to a person who may be subject to the tax imposed under this Part.   The 
returns may be required of a person, including lessees or mortgagors of real or personal 
property, fiduciaries, employers and all officers and employees of this State, or of a 
municipal corporation or political subdivision of this State, having the control, receipt, 
custody, disposal or payment of dividends, interest, rents, salaries, wages, premiums, 
annuities, compensations, remunerations, emoluments or other fixed or determinable 
gains, profits or income, except interest coupons payable to bearer. A duplicate of the 
statement as to tax withheld on wages, required to be furnished by an employer to an 
employee, constitutes the return of information required to be made under this section 
with respect to those wages. 
Sec. B-6.  36 MRSA §5403, sub-§4, as enacted by PL 2015, c. 267, Pt. DD, §33, 
is amended to read: 
4.  Individual income tax standard deduction and itemized deduction phase-out.  
Beginning in 2017 and each year thereafter, by the dollar amount contained in the 
numerator of the fraction specified in section 5122, subsection 1, paragraph JJ, 
subparagraphs (1), (2) and (3) 5124-B, subsection 3, paragraphs A, B and C and section 
5125, subsection 6, paragraphs A, B and C, except that for the purposes of this 
subsection, notwithstanding section 5402, subsection 1-B, the "cost-of-living adjustment" 
is the Chained Consumer Price Index for the 12-month period ending June 30th of the 
preceding calendar year divided by the Chained Consumer Price Index for the 12-month 
period ending June 30, 2016; 
Sec. B-7.  Application.  That section of this Part that amends the Maine Revised 
Statutes, Title 36, section 5242 applies to returns of information made for calendar years 
beginning on or after January 1, 2016.  That section of this Part that repeals Title 36, 
section 5122, subsection 1, paragraph JJ applies to tax years beginning on or after January 
1, 2016. 
SUMMARY 
The intent of Part A of this bill is to improve the State’s ability to collect sales and 
use taxes owed to the State by, beginning August 1, 2016: 
1.  Strengthening the existing tax lien provisions to increase the State’s ability to be 
first in line in priority ahead of other creditors for payment on a tax debt; 
2.  Broadening the existing responsible individual liability provision for sales and use 
taxes to include sales and use taxes required to be collected by a business, whether or not 
actually collected; and 
3.  Including within the new responsible individual provision the existing responsible 
person liability for uncollected fuel taxes. 
Part B of this bill makes technical changes to the income tax laws, including: 
1.  Changing the date an information return, such as a Form W-2, must be filed with 
Maine Revenue Services from February 28th to January 31st following the calendar year 
to which the information return relates.  The change in the due date applies to information 
returns made for calendar years beginning on or after January 1, 2016.  The change is 
consistent with recently enacted federal law; and 
2.  Replacing the current individual income tax addition modification equal to the 
phase-out amount of a taxpayer's Maine standard deduction or itemized deductions with a 
phase-out amount used to calculate the taxpayer's allowable Maine standard deduction or 
itemized deductions.  The calculation of the phase-out amount is unchanged and, as under 
current law, applies to tax years beginning on or after January 1, 2016.