An Act To Require Remote Sellers To Collect and Remit Sales and Use Tax on Sales into Maine and To Provide Retailers a Collection Allowance
Maine Legislature, Session 128, LD 1405
Committee: Taxation
Sponsors: COLLINS, PARRY, BREEN, CYRWAY, DESCHAMBAULT, DIAMOND, HAMPER, JACKSON, BRYANT, SCHNECK
Amends: 36 MRSA §1754-B, 36 MRSA §1951-B

Legislative Document
No. 1405
S.P. 483
In Senate, April 11, 2017
An Act To Require Remote Sellers To Collect and Remit Sales and 
Use Tax on Sales into Maine and To Provide Retailers a Collection 
Allowance
Reference to the Committee on Taxation suggested and ordered printed.
HEATHER J.R. PRIEST
Secretary of the Senate
Presented by Senator COLLINS of York.
Cosponsored by Representative PARRY of Arundel and
Senators: BREEN of Cumberland, CYRWAY of Kennebec, DESCHAMBAULT of York, 
DIAMOND of Cumberland, HAMPER of Oxford, JACKSON of Aroostook, Representatives: 
BRYANT of Windham, SCHNECK of Bangor.
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  36 MRSA §1754-B, sub-§4 is enacted to read: 
4.  Collection allowance.  A seller that is required to register pursuant to this section 
and that collects and remits sales and use tax in accordance with the provisions of this 
Part may deduct and retain 2% of that tax as a collection allowance.  The collection 
allowance does not apply to taxes collected by a state, county or municipal agency. 
Sec. 2.  36 MRSA §1951-B is enacted to read: 
§1951-B.  Collection of tax by remote sellers 
1.  Legislative findings.  The Legislature finds that: 
A.  The inability to effectively collect the sales or use tax from remote sellers that 
deliver tangible personal property, a product transferred electronically or a service 
directly to the citizens of this State is seriously eroding the sales tax base of this State, 
causing revenue losses and imminent harm to this State through the loss of critical 
funding for state and local services; 
B.  Despite the fact that a use tax is owed on tangible personal property, a product 
transferred electronically or a service delivered for use in this State, many remote 
sellers actively market sales as "tax free" or "no sales tax" transactions; 
C.  The structural advantages of remote sellers, including the absence of point-of-sale 
tax collection, along with the general growth of online retail, could further erode this 
State's sales tax base in the near future; 
D.  Remote sellers that make a substantial number of deliveries into or have large 
gross revenues from Maine benefit extensively from this State's market, including the 
economy generally and state infrastructure; 
E.  In contrast with increasing harm caused to the State from the exemption from 
sales and use tax collection duties for remote sellers, the costs of that collection have 
fallen. Given modern computing and software options, it is neither unusually difficult 
nor burdensome for remote sellers to collect and remit sales and use taxes associated 
with sales into Maine; and 
F.  The Legislature recognizes that the imposition of this requirement places remote 
sellers in a complicated position, precisely because existing constitutional doctrine 
calls the imposition of this requirement into question. Accordingly, the Legislature 
intends to clarify that the obligations created by the imposition of this requirement 
would be appropriately stayed by the courts until the constitutionality of this law has 
been clearly established by a binding judgment, including, for example, a decision 
from the Supreme Court of the United States abrogating its existing doctrine or a 
final judgment applicable to a particular taxpayer. 
2.  Legislative intent.  It is the intent of the Legislature to apply the sales and use tax 
obligations imposed under the laws of this State to the limit of federal and state 
constitutional doctrines and to thereby clarify that the laws of this State permit the State 
to immediately argue in any litigation that such constitutional doctrine should be changed 
to permit the tax collection obligations of this section. 
3.  Collection of tax by remote seller.  Notwithstanding any provision of law to the 
contrary, a person selling tangible personal property, products transferred electronically 
or services for delivery into this State is subject to the provisions of this Part and shall 
collect and remit the sales tax imposed pursuant to section 1811 in the same manner as a 
retailer that has a physical presence in this State if: 
A.  The person's gross revenue from delivery of tangible personal property, products 
transferred electronically or services that are taxable by this State into this State in the 
previous calendar year or current calendar year exceeds $100,000; or 
B.  The person sold tangible personal property, products transferred electronically or 
services that are taxable by this State for delivery into this State in at least 200 
separate transactions in the previous calendar year or the current calendar year. 
4.  Declaratory judgment action.  Notwithstanding any other provision of law, and 
regardless of whether the State initiates an audit or other tax collection procedure, the 
State may bring a declaratory judgment action pursuant to Title 14, chapter 707 against 
any person the State believes meets the criteria of subsection 3 to establish that the tax 
collection obligation is applicable and valid under state and federal law. The court shall 
act on this declaratory judgment action as expeditiously as possible, and the court shall 
proceed with priority over any other action presenting the same question in any other 
venue. 
5.  Effect of court action on collection of tax; injunction.  During a pending action 
pursuant to subsection 4, and upon determining that a question is presented regarding the 
constitutionality of this law, the court, on the State's motion or the court's own initiative, 
shall enjoin the State from enforcing the obligation in subsection 3 against any person 
subject to subsection 3 that does not affirmatively consent or otherwise collect the sales 
or use tax on a voluntary basis. The injunction does not apply if there is a previous 
judgment from a court establishing the validity of the obligation in subsection 3 with 
respect to the particular taxpayer. 
6.  Appeal.  Any appeal from a decision with respect to the cause of action 
established by this section may only be made to the Supreme Judicial Court sitting as the 
Law Court. The Law Court shall hear and decide the appeal as expeditiously as possible. 
7.  No retroactive application of tax.  The obligation to collect and remit the sales 
and use tax required by this section may not be applied retroactively. 
8.  Prospective application of tax following injunction.  If an injunction imposed 
pursuant to subsection 5 is lifted, the State shall assess and apply the sales or use tax 
collection obligation only from that date forward with respect to any person covered by 
the injunction. 
Sec. 3.  Effective date.  This Act takes effect October 1, 2017. 
SUMMARY 
This bill permits persons that are required to register under Maine's sales and use tax 
laws to deduct and retain an amount equal to up to 2% of the sales and use taxes they 
collect. 
This bill also requires persons that sell for delivery into this State tangible personal 
property, a product delivered electronically or a service that is taxable by this State to 
collect and remit to the State the sales or use tax imposed by the State on that property, 
product or service.  This requirement applies to a person whose gross revenue from 
delivery of taxable tangible personal property, a product transferred electronically or a 
service into Maine in the previous calendar year or current calendar year exceeds 
$100,000 or to a person that sold taxable tangible personal property, a product transferred 
electronically or a service into this State in at least 200 separate transactions in the 
previous calendar year or the current calendar year. 
If a lawsuit is brought challenging, on constitutional grounds, the requirement of a 
person to collect and remit sales or use tax for items delivered into Maine, the court is 
required to enjoin the State from enforcing the requirement to collect and remit the tax 
against any person unless that person voluntarily agrees to collect and remit the tax or 
against any person that has previously been adjudicated to be required to collect and remit 
the tax.  After the injunction against the State is lifted, the requirement to collect and 
remit the sales or use tax may be applied only to prospective sales.