An Act To Provide Local Sales Tax Increment Disbursements
Maine Legislature, Session 127, LD 0503
Committee: Taxation
Sponsors: SCHNECK, COLLINS, BLUME, GOODE, HYMANSON, MAREAN, O'CONNOR, RYKERSON, HILL, VALENTINO
Amends: 30-A MRSA §5686

Legislative Document 
No. 503 
H.P. 342 
House of Representatives, February 24, 2015 
An Act To Provide Local Sales Tax Increment Disbursements 
Reference to the Committee on Taxation suggested and ordered printed. 
ROBERT B. HUNT 
Clerk 
Presented by Representative SCHNECK of Bangor. 
Cosponsored by Senator COLLINS of York and 
Representatives: BLUME of York, GOODE of Bangor, HYMANSON of York, MAREAN of 
Hollis, O'CONNOR of Berwick, RYKERSON of Kittery, Senators: HILL of York, 
VALENTINO of York. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  30-A MRSA §5686 is enacted to read: 
§5686.  Local sales tax increment disbursement 
1.  Local sales tax increment.  Beginning with fiscal year 2016-17, the State Tax 
Assessor shall, based on available taxable retail sales data as derived from state sales tax 
collections, excluding taxable retail sales data for lodging and restaurants, determine the 
amount of sales tax revenue and the amount of the local sales tax increment for each 
fiscal year that is attributable to each municipality and the unorganized territory under 
Title 36, Part 3.  For the purposes of this section, "local sales tax increment" means 5% of 
the increase in revenue attributable to a municipality or the unorganized territory under 
Title 36, Part 3 over the amount attributable to the municipality or the unorganized 
territory in fiscal year 2016-17 and every 4th year thereafter. 
2.  Transfers.  Beginning with fiscal year 2017-18, the State Tax Assessor shall 
certify to the State Controller by September 30th annually the local sales tax increment 
amounts needed to make payments under this section.  The State Controller shall, within 
days after the certification, transfer those amounts to a local sales tax increment 
account, which must be established for this purpose. 
3.  Payments to municipalities and the unorganized territory.  The Treasurer of 
State shall pay by October 1st annually to each municipality and the Unorganized 
Territory Education and Services Fund under Title 36, chapter 115 from the local sales 
tax increment account established pursuant to subsection 2 an amount equal to the local 
sales tax increment.  If the local sales tax increment for a municipality or the unorganized 
territory is $0 or less, a payment may not be made for that fiscal year.  The Treasurer of 
State shall pay the amount due under this section and provide an accounting of the 
amount to the municipality or the fiscal administrator of the unorganized territory no later 
than 6 months after the end of that fiscal year.  The amount received under this section by 
a municipality or the fund may not reduce or be reduced by any other revenue sharing or 
state aid received by the municipality or the fund.  A municipality or the fiscal 
administrator of the unorganized territory shall reduce the property tax levy, as defined in 
section 5721-A, subsection 1, paragraph D, in an amount equal to the payments received 
under this section in the fiscal year that the local sales tax increment revenue is received. 
SUMMARY 
This bill requires payments beginning in fiscal year 2017-18 to municipalities of an 
amount, as determined by the State Tax Assessor, equal to 5% of the difference between 
the sales and use tax revenue attributable to the municipality in a fiscal year and the 
comparable amounts for fiscal year 2016-17, referred to as the "local sales tax 
increment."  If the amount of sales and use tax collected in a fiscal year in a municipality 
is below that collected in fiscal year 2016-17, then the municipality receives no payment.  
The base year for determining the local sales tax increment is reset in fiscal year 2020-21 
and every 4 years thereafter.  The amount received may not reduce any other state aid or 
revenue sharing received by that municipality, and the municipality must use the amount 
received to reduce property taxes by the same amount.  The Unorganized Territory 
Education and Services Fund receives the local sales tax increment payment for the 
unorganized territory and is subject to the same requirement to use the revenue to reduce 
property taxes.