An Act To Clarify the Sales Tax Exemption for Vehicles Used in Interstate or Foreign Commerce
Maine Legislature, Session 128, LD 1734
Committee: Taxation
Sponsors: THIBODEAU, GIDEON, DIAMOND, JACKSON, KATZ, VOLK, ESPLING, GILLWAY, GOLDEN, TIMBERLAKE
Amends: 36 MRSA §1760

Legislative Document
No. 1734
S.P. 633
In Senate, December 22, 2017
An Act To Clarify the Sales Tax Exemption for Vehicles Used in 
Interstate or Foreign Commerce
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203.
Received by the Secretary of the Senate on December 19, 2017.  Referred to the Committee 
on Taxation pursuant to Joint Rule 308.2 and ordered printed.
HEATHER J.R. PRIEST
Secretary of the Senate
Presented by President THIBODEAU of Waldo.
Cosponsored by Speaker GIDEON of Freeport and
Senators: DIAMOND of Cumberland, JACKSON of Aroostook, KATZ of Kennebec, VOLK 
of Cumberland, Representatives: ESPLING of New Gloucester, GILLWAY of Searsport, 
GOLDEN of Lewiston, TIMBERLAKE of Turner.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §1760, sub-§41, as amended by PL 2011, c. 501, §1, is 
repealed.
Sec. 2.  36 MRSA §1760, sub-§41-A is enacted to read:
41-A.  Certain instrumentalities of interstate or foreign commerce.  The sale of a 
vehicle, railroad rolling stock, aircraft or watercraft that is placed in use by the purchaser 
as an instrumentality of interstate or foreign commerce within 30 days after that sale and 
that is used by the purchaser for not less than 80% of the days of the next 2 years as an 
instrumentality of interstate or foreign commerce.  The State Tax Assessor may for good 
cause extend for not more than 60 days the time for placing the instrumentality in use in 
interstate or foreign commerce.
For purposes of this subsection:
A.  Property is placed in use as an instrumentality of interstate or foreign commerce 
by its carrying of, or providing the motive power for the carrying of, a bona fide 
payload in interstate or foreign commerce or by being dispatched to a specific 
location at which it will be loaded with, or will be used as motive power for the 
carrying of, a bona fide payload in interstate or foreign commerce.
(1)  Property waiting to be loaded or unloaded or not being used while being 
repaired or maintained is considered placed in use as an instrumentality of 
interstate or foreign commerce as long as its next intended use is interstate or 
foreign commerce.
(2)  The days a trailer is used by another entity must be used to calculate 
eligibility for the exemption under this subsection as long as there is a written 
transportation agreement between the 2 parties.
(3)  Personal property that is a bus with a capacity of at least 47 passengers that is 
engaged in transporting within the State a bona fide payload of travelers on an 
interstate or foreign cruise that originates outside the State and terminates outside 
the State, if the transportation is provided pursuant to a contract between the 
interstate or foreign cruise provider and the person providing the transportation, 
is considered to be placed in use as an instrumentality of interstate or foreign 
commerce;
B.  "Bona fide payload" means a cargo of persons or property transported by a 
contract or common carrier for compensation that exceeds the direct cost of carrying 
that cargo or pursuant to a legal obligation to provide service as a public utility or a 
cargo of property transported in the reasonable conduct of the purchaser's own 
nontransportation business in interstate or foreign commerce; and
C.  "Interstate or foreign commerce" has the same meaning as "interstate commerce" 
as defined in 49 Code of Federal Regulations, Section 390.5T.
The exemption provided by this subsection is not limited to instrumentalities otherwise 
required to be exempt under the United States Constitution.
Sec. 3.  Application to pending investigations and audits.  Notwithstanding 
the Maine Revised Statutes, Title 1, section 302, this Act applies to investigations or 
audits conducted by the Department of Administrative and Financial Services, Bureau of 
Revenue Services that are not final as of the effective date of this Act.
SUMMARY
This bill clarifies the exemption from sales and use tax for instrumentalities of 
interstate or foreign commerce by specifying that property waiting to be loaded or 
unloaded or not being used while being repaired or maintained is considered to be placed 
in use in interstate or foreign commerce as long as the intended next use of that property 
is interstate or foreign commerce.  This bill provides that a trailer being used by an entity 
other than the owner is eligible for the exemption as long as there is a written 
transportation agreement between the owner and the other entity.  This bill provides a 
definition of "interstate or foreign commerce" that is the same as the definition of 
"interstate commerce" in the Federal Motor Carrier Safety Regulations.  This bill also 
specifies that the changes made in the bill apply to any ongoing audit or investigation 
being conducted by the Department of Administrative and Financial Services, Bureau of 
Revenue Services.