An Act To Allow the Creation of a Local Option Sales Tax by Referendum
Maine Legislature, Session 127, LD 0594
Committee: Taxation
Sponsors: VALENTINO, BROOKS, MASTRACCIO, JORGENSEN, ALFOND, BLUME, CHENETTE, FREY, GOODE, MOONEN, SANBORN, TEPLER
Amends: 36 MRSA §1817

Legislative Document 
No. 594 
S.P. 211 
In Senate, March 3, 2015 
An Act To Allow the Creation of a Local Option Sales Tax by 
Referendum 
Reference to the Committee on Taxation suggested and ordered printed. 
HEATHER J.R. PRIEST 
Secretary of the Senate 
Presented by Senator VALENTINO of York. 
Cosponsored by Representatives: BROOKS of Lewiston, MASTRACCIO of Sanford, 
Representative JORGENSEN of Portland and Senator: ALFOND of Cumberland, 
Representatives: BLUME of York, CHENETTE of Saco, FREY of Bangor, GOODE of 
Bangor, MOONEN of Portland, SANBORN of Gorham, TEPLER of Topsham. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  36 MRSA §1817 is enacted to read: 
§1817.  Municipal local option sales tax 
1.  Definitions.    As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A.  "Participating municipality" means a municipality that has imposed a local option 
sales tax pursuant to this section. 
B.  "Sales tax base" means those items subject to sales taxation under this Part. 
2.  Authorization to impose local option sales tax.  A municipality by referendum 
conducted pursuant to subsection 9 may impose a local option sales tax of no more than 
1% on those items that are part of the sales tax base, except for items that are excluded 
under subsection 3, and may limit the period of time the tax is imposed to specified 
months of the year. A municipality that adopts a local option sales tax pursuant to this 
section may not alter the range of items subject to sales taxation under this Part. 
3.  Excluded items.  A municipality may not impose a local option sales tax on 
aircraft, furniture as defined in section 2551, subsection 4, items used in production, 
machinery and equipment as defined in section 1752, subsection 7-B, motor vehicles, 
watercraft or major household appliances.  For purposes of this section, "major household 
appliance" means a piece of equipment used for a specific function in the home 
purchased for more than $500 excluding tax. 
4.  Notify assessor.  A municipality that imposes a local option sales tax under 
subsection 2 shall notify the assessor at least 90 days before the local option sales tax is 
effective. 
5.  Administration.  Retailers in a participating municipality shall transfer the 
revenue from the local option sales tax at the time and in the manner provided in section 
1951-A for the transfer of state sales tax revenue.  The tax is subject to the same 
enforcement provisions, interest, penalties and administrative actions as other taxes 
assessed under this Part. 
6.  Distribution of revenue.  Each month, the assessor shall identify the amount of 
revenue attributable to each participating municipality under this section, subtract the 
costs of administering this section and certify the net amount due each participating 
municipality to the Treasurer of State.  The Treasurer of State shall make monthly 
payments to municipal treasurers of the net amounts certified by the assessor under this 
subsection. 
For purposes of this subsection, "costs of administering this section" means the lesser of 
the actual cost to the assessor of administering this section and 2% of the total revenue 
generated by municipalities that impose local option sales taxes. 
7.  Use of revenue by participating municipality.  The revenue raised by the 
imposition of a local option sales tax under this section must be held by the municipality 
in a special revenue account established for that purpose.  Revenue from that account 
may be expended only if specifically authorized by an appropriation of the local 
legislative body. 
8.  Effect on revenue sharing and other state aid programs.  Revenue received by 
the State pursuant to subsection 6 may not be considered to be receipts from the taxes 
imposed under this Part for the purpose of transfers to the Local Government Fund under 
Title 30-A, section 5681.  Revenue received pursuant to subsection 6 may not be used to 
reduce or eliminate any funding otherwise due the county or participating municipality 
under any provision of law providing aid to the county or participating municipality, 
including, but not limited to, aid for schools, roads, public assistance or jails. 
9.  Referendum.  The question of whether to impose a local option sales tax must be 
submitted to the legal voters of a municipality that seeks to impose the local option sales 
tax. 
The petition process and voting must be held and conducted in accordance with Title 
30-A, sections 2528, 2529 and 2532 even if the municipality has not accepted the 
provisions of Title 30-A, section 2528. The voting at elections must be held and 
conducted in accordance with Title 21-A. The municipal clerk shall prepare the required 
ballots, which must contain substantially the following question: 
"Do you favor a local option sales tax of up to 1% to be imposed by 
[insert name of municipality] for the months of [insert the names of the 
months] each year?" 
The voters shall indicate by a cross or check mark placed against the word "Yes" or "No" 
their opinion of the same.  The municipal clerk shall make a return of the results, certify 
the results and send them to the Secretary of State. The Secretary of State shall forward 
the results to the assessor. 
The local option sales tax may be discontinued by referendum conducted in the same 
manner as the referendum adopting the local option sales tax under this section. 
10.  Effective date of local option sales tax; acceptance by voters.  The local 
option sales tax authorized by this section takes effect 120 days after the municipal 
referendum vote under subsection 9 if it is accepted by a majority of the legal voters 
voting at the election and the total number of votes cast equals or exceeds 20% of the 
total number of votes cast in that municipality in the most recent gubernatorial election. 
11.  Repeal.  This section is repealed on December 31, 2018. 
SUMMARY 
This bill allows a municipality to impose a local option sales tax, which may be 
seasonal, of no more than 1% by local referendum.  Certain items, such as motor vehicles 
and major household appliances, are excluded from the local option sales tax.