An Act To Tax Sugar-sweetened Beverages To Fund Programs To Provide Resources for Veterans and Others
Maine Legislature, Session 128, LD 1550
Committee: Taxation
Sponsors: HAMANN, MILLETT, BERRY, GATTINE, GIDEON, JORGENSEN, SYLVESTER, TIPPING, CHENETTE, LIBBY
Amends: 4 MRSA §422, 5 MRSA §20050-A, 10 MRSA §996-A, 22 MRSA §3740-A, 37-B MRSA §516

Legislative Document
No. 1550
H.P. 1068
House of Representatives, April 27, 2017
An Act To Tax Sugar-sweetened Beverages To Fund Programs To 
Provide Resources for Veterans and Others
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative HAMANN of South Portland.
Cosponsored by Senator MILLETT of Cumberland and
Representatives: BERRY of Bowdoinham, GATTINE of Westbrook, Speaker GIDEON of 
Freeport, JORGENSEN of Portland, SYLVESTER of Portland, TIPPING of Orono, Senators: 
CHENETTE of York, LIBBY of Androscoggin.
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  4 MRSA §422, sub-§3 is enacted to read: 
3.  Drug Court Fund.  The Drug Court Fund, referred to in this subsection as "the 
fund," is established as a nonlapsing fund within the Judicial Department.  The fund 
receives a portion of the taxes and penalties collected under Title 36, chapter 723 and 
may be used by the Judicial Department to support programs established under this 
chapter. 
Sec. 2.  5 MRSA §20050-A is enacted to read: 
§20050-A.  Drug Treatment Fund 
The Drug Treatment Fund, referred to in this section as "the fund," is established as a 
nonlapsing fund within the department.  The fund receives a portion of the taxes and 
penalties collected under Title 36, chapter 723.  To the extent funds are available in the 
fund, the department shall disburse funds to approved treatment facilities on behalf of 
eligible patients whose insurance does not cover some or all of the charges for treatment.  
The department shall establish rules governing eligibility for patients and the amounts 
that may be paid from the fund for treatment services.  Rules adopted under this section 
are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. 
By February 15, 2019 and annually thereafter, the commissioner shall submit to the 
joint standing committee of the Legislature having jurisdiction over health and human 
services matters a report describing the distribution of funds under this section.  
Sec. 3.  10 MRSA §996-A is enacted to read: 
§996-A.  Program to promote healthy food access 
The authority shall establish a supplemental financing and technical assistance 
program designed to support the production and distribution of healthy local foods 
produced in this State, referred to in this section as "the program."  The program may 
provide assistance to farms or other producers of healthy foods to support the production 
and distribution of such foods to consumers in this State as well as to government 
facilities, schools, hospitals and other institutions to secure access to healthy local foods 
produced in this State. 
1.  Fund.  The Healthy Food Access Fund, referred to in this section as "the fund," is 
established as a nonlapsing fund within the authority.  The fund receives a portion of the 
taxes and penalties collected under Title 36, chapter 723.  The department shall disburse 
funds in the fund to support the program. 
2.  Report.  By February 15, 2019 and annually thereafter, the authority shall submit 
to the joint standing committee of the Legislature having jurisdiction over agriculture 
matters a report describing the distribution of funds under the program.  
Sec. 4.  22 MRSA §3740-A is enacted to read: 
§3740-A.  Head Start Fund 
The Head Start Fund, referred to in this section as "the fund," is established as a 
nonlapsing fund within the department.  The fund receives a portion of the taxes and 
penalties collected under Title 36, chapter 723.  The commissioner shall make 
distributions from the fund to support programs that promote school readiness of children 
under 5 years of age from low-income families through education, health, social and 
other services, including but not limited to preschool programs under Title 20-A, section 
4271. The department may adopt rules governing disbursals from the fund.  Rules 
adopted under this section are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A. 
By February 15, 2019 and annually thereafter, the commissioner shall submit to the 
joint standing committee of the Legislature having jurisdiction over education and 
cultural affairs a report describing the distribution of funds under this section. 
Sec. 5.  36 MRSA c. 723 is enacted to read: 
CHAPTER 723 
SUGAR-SWEETENED BEVERAGES TAX 
§4921.  Short title 
This chapter may be known and cited as "the Sugar-sweetened Beverages Tax Act." 
§4922.  Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1.  Beverage for medical use.  "Beverage for medical use" means a beverage suitable 
for human consumption and manufactured for use as an oral nutritional therapy for 
persons who cannot absorb or metabolize dietary nutrients from food or beverages or for 
use as an oral rehydration electrolyte solution for infants and children formulated to 
prevent or treat dehydration due to illness.  "Beverage for medical use" includes "medical 
food" as defined in the Orphan Drug Act, 21 United States Code, Section 360ee(b)(3).  
"Beverage for medical use" does not include beverages commonly referred to as sports 
drinks or other beverages not formulated for specific medical conditions.  
2.  Bottle.  "Bottle" means any closed or sealed container regardless of size or shape, 
including those made of glass, metal, paper, plastic or any other material or combination 
of materials. 
3.  Bottled sugar-sweetened beverage.  "Bottled sugar-sweetened beverage" means 
any sugar-sweetened beverage contained in a bottle that is ready for consumption without 
further processing. 
4.  Caloric sweetener.  "Caloric sweetener" means any sweetener suitable for human 
consumption that has a caloric content of 5 or more calories per serving, including but not 
limited to sucrose, fructose, glucose or other sugars or fruit juice concentrate. 
5.  Consumer.  "Consumer" means a person who purchases a substance for that 
person's own use and not for sale to another. 
6.  Distributor.  "Distributor" means any person, including a manufacturer or 
wholesale dealer, that receives, stores, manufactures, bottles or distributes bottled sugar-
sweetened beverages, syrups or powders for sale to retailers doing business in the State, 
whether or not that person also sells such products to consumers. 
7.  Milk.  "Milk" means natural liquid milk regardless of animal or plant source or 
butterfat content; natural milk concentrate, whether or not reconstituted; or dehydrated 
natural milk, whether or not reconstituted. 
8.  Natural fruit juice.  "Natural fruit juice" means the liquid resulting from the 
pressing of fruits or the liquid resulting from the dilution with water of dehydrated natural 
fruit juice. 
9.  Natural vegetable juice.  "Natural vegetable juice" means the liquid resulting 
from the pressing of vegetables or the liquid resulting from the dilution with water of 
dehydrated natural vegetable juice. 
10.  Noncaloric sweetener.  "Noncaloric sweetener" means any sweetener suitable 
for human consumption that has no caloric content, including, but not limited to, 
aspartame, acesulfame potassium, neotame, saccharin, sucralose and stevia.  For purposes 
of this subsection, "no caloric content" means fewer than 5 calories per serving. 
11.  Place of business.  "Place of business" means any place where sugar-sweetened 
beverages, syrups or powders are manufactured or received for sale in the State. 
12.  Powder.  "Powder" means any solid mixture of ingredients used in making, 
mixing or compounding sugar-sweetened beverages by mixing with one or more other 
ingredients, including water, ice, syrup, fruits, vegetables, natural fruit juice, natural 
vegetable juice or carbonating gas or other gas. 
13.  Retailer.  "Retailer" means any person who sells or otherwise dispenses in the 
State a sugar-sweetened beverage to a consumer whether or not that person is also a 
distributor. 
14.  Sale.  "Sale" means the transfer of title or possession for valuable consideration 
regardless of the manner by which the transfer is completed. 
15.  Sugar-sweetened beverage.  "Sugar-sweetened beverage" means any 
nonalcoholic beverage, carbonated or noncarbonated, that is intended for human 
consumption and contains any added caloric sweetener. As used in this subsection, 
"nonalcoholic beverage" means any beverage that contains less than 0.5% alcohol per 
volume.  
16.  Syrup.  "Syrup" means a liquid mixture of ingredients used in making sugar-
sweetened beverages by mixing with one or more other ingredients, including water, ice, 
powder, fruits, vegetables, natural fruit juice, natural vegetable juice or carbonating gas or 
other gas. 
17.  Water.  "Water" means nonflavored water, water flavored with natural fruit juice 
that has no calories or water flavored with natural flavor.   "Water" includes artesian, 
mineral, spring or well water and includes carbonated, distilled or purified water. 
§4923.  Permit required; distributor 
After June 30, 2018, a person may not act as a distributor in this State without a 
permit issued by the State Tax Assessor for each place of business owned and operated 
by the distributor.  A permit issued under this section is in addition to any permit required 
under Title 32, chapter 27. 
1.  Application.  An application for a permit must be filed on a form provided by the 
State Tax Assessor for that purpose.  The application must be subscribed and sworn to by 
a person with legal authority to bind the business.  The application must identify the 
distributor or the owner of the distribution business, the distributor's mailing address, the 
place of business for which the permit is sought, the nature of the distribution business 
that is engaged in at that location and any other information the State Tax Assessor may 
require.  The State Tax Assessor may by rule establish a permit fee designed to cover the 
costs of processing applications. 
2.  Issuance.  Upon receipt of an application and any required permit fee, the State 
Tax Assessor may issue to the applicant, for the place of business designated, a 
nonassignable permit, authorizing the sale of sugar-sweetened beverages, syrups and 
powders in the State.  Permits issued pursuant to this section expire on June 30th of each 
year and may be renewed annually. 
3.  Limitations.  A permit may not be transferred.  A permit must be prominently 
displayed at all times in each of a distributor's places of business. 
4.  Violations; penalties.  The following penalties apply to a violation of this section. 
A.  A distributor doing business in the State without holding a permit issued pursuant 
to this section commits a civil violation for which a fine of not less than $250 and not 
more than $500 must be adjudged. 
B.  A distributor that violates paragraph A after having been previously adjudicated 
as violating paragraph A commits a civil violation for which a fine of not less than 
$500 and not more than $1,000 must be adjudged for each subsequent violation. 
C.  A distributor that sells bottled sugar-sweetened beverages, syrups or powders at 
wholesale or retail without holding a permit issued pursuant to this section commits a 
civil violation for which a fine of not less than $250 and not more than $500 must be 
adjudged. 
D.  A distributor that violates paragraph C after having been previously adjudicated 
as violating paragraph C commits a civil violation for which a fine of not less than 
$500 and not more than $1,000 must be adjudged for each subsequent violation. 
5.  Revocation or suspension.  The State Tax Assessor may revoke or suspend a 
permit of or refuse to issue a permit to any distributor that fails to comply with any 
provision of this chapter.  The State Tax Assessor may revoke or suspend a permit of a 
person that is no longer doing business as a distributor.  A person aggrieved by a 
revocation or suspension may request reconsideration as provided in section 151. 
§4924.  Tax imposed 
1.  Tax.  Beginning July 1, 2018, there is imposed an excise tax on every distributor 
for the privilege of selling the products governed by this chapter in the State, calculated 
as follows: 
A.  An amount of $0.01 per ounce of bottled sugar-sweetened beverage sold to a 
retailer; 
B.  An amount of $0.01 per ounce of sugar-sweetened beverage produced from a 
syrup or powder sold to a retailer, either as syrup or powder or as a sugar-sweetened 
beverage derived from that syrup or powder.  For purposes of calculating the tax, the 
volume of sugar-sweetened beverage produced from syrups or powders is the larger 
of the following: 
(1)  The largest volume resulting from use of the syrups or powders according to 
any manufacturer's instructions; and 
(2)  The volume actually produced by the retailer, as reasonably determined by 
the State Tax Assessor. 
2.  Exemptions.  The following are exempt from the tax imposed under this section: 
A.  Bottled sugar-sweetened beverages, syrups and powders sold to the Federal 
Government or a federally recognized Indian tribe; 
B.  Bottled sugar-sweetened beverages, syrups and powders sold by a distributor to 
another distributor that holds a permit issued pursuant to this chapter.  If the sale is to 
a person that is both a distributor and a retailer, the sale is exempt but the tax is due 
when that person resells the product to another retailer or to a consumer; 
C.  Beverages sweetened solely with noncaloric sweeteners; 
D.  Beverages consisting of 100% natural fruit juice or natural vegetable juice with 
no added caloric sweetener; 
E.  Beverages in which milk is the primary ingredient or the first listed ingredient on 
the label of the beverage; 
F.  Coffee or tea without added caloric sweetener; 
G.  Infant formula; 
H.  Beverages for medical use; and 
I.  Water. 
3.  Retail price.  A distributor, when selling to a retailer bottled sugar-sweetened 
beverages, syrups or powders on which the tax imposed by this section has been paid, 
shall clearly indicate that tax on the sales receipt.  The excise tax imposed under this 
chapter may be added to the retail price of sugar-sweetened beverages, syrups or powders 
sold to consumers. 
4.  Retailer liability.  A retailer that sells to consumers in this State bottled sugar-
sweetened beverages, syrups or powders on which the tax imposed by this section has not 
been paid by a distributor is liable for the tax imposed at the point of sale to a consumer. 
5.  In addition to all other taxes.  The taxes imposed by this section are in addition 
to any other taxes that may apply. 
6.  Deposit of receipt.  The State Tax Assessor shall deposit all taxes and any fines 
collected under this chapter as follows: 
A.  Twenty-five percent in the Veterans Fund established in Title 37-B, section 516; 
B.  Thirty-seven and one-half percent to the Head Start Fund established in Title 22, 
section 3740-A; 
C.  Eighteen and three-quarters percent to the Drug Treatment Fund established in 
Title 5, section 20050-A; 
D.  Seven and one-half percent to the Obesity and Chronic Disease Fund established 
in Title 20-A, section 6631; 
E.  Seven and one-half percent to the Healthy Food Access Fund established in Title 
10, section 996-A; 
F.  One and one-half percent to the After-school Program Fund established in Title 
20-A, section 8901; 
G.  One and one-half percent to the Drug Court Fund established in Title 4, section 
422, subsection3; and 
H.  Three-quarters of a percent to the Maine Drinking Water Fund established in Title 
22, section 2610. 
§4925.  Returns and records 
A distributor or retailer liable for the tax imposed by this chapter shall file, on or 
before the last day of each month, a return on a form prescribed and furnished by the 
State Tax Assessor together with payment of the tax due under this chapter.  The return 
must report the quantity of all sugar-sweetened beverages, syrups and powders subject to 
the excise tax imposed by this chapter sold in the State by the distributor or retailer during 
the preceding calendar month as well as any other information required by the State Tax 
Assessor.  A distributor or retailer liable for the tax imposed under this chapter shall keep 
at its principal place of business for at least 2 years after incurring the liability for 
payment of the tax a complete and accurate record of all sales subject to the tax. 
§4926.  Violation; penalties 
1.  Violations.  A person subject to the provisions of this chapter that fails to pay the 
entire amount of tax imposed by this chapter by the date that payment is due, fails to 
submit a return or maintain records required by this chapter, violates any other provision 
of this chapter other than section 4923 or violates rules adopted by the State Tax Assessor 
under this chapter, other than rules implementing section 4923: 
A.  Commits a Class E crime; and 
B.  With respect to any tax due and not paid, is subject to an additional administrative 
penalty equal to 50% of the tax due and not paid plus interest on all amounts due at a 
rate of 12% per year from the date the tax was due until the tax is paid.  For good 
reason shown, the State Tax Assessor may waive all or part of the additional 
administrative penalty but may not waive interest charges. 
All taxes, penalties and interest imposed on any person under the provisions of this 
chapter that are due and unpaid constitute a debt to the State and may be collected from 
the person by suit or other appropriate legal action. 
§4927.  Rules 
The State Tax Assessor may adopt rules to implement this chapter.  Rules adopted 
pursuant to this chapter are routine technical rules under Title 5, chapter 375, subchapter 
2-A. 
Sec. 6.  37-B MRSA §516 is enacted to read: 
§516.  Veterans Fund 
The Veterans Fund, referred to in this section as "the fund," is established as a 
nonlapsing fund within the bureau.  The fund receives a portion of the taxes and penalties 
collected under Title 36, chapter 723.  The director shall coordinate distributions from 
this fund with distributions made under section 514. 
1.  Distributions.  The director shall make distributions from the fund to support 
programs offered by state agencies or by nonprofit entities for veterans that provide: 
A.  Employment assistance to veterans transitioning from military to civilian life; 
B.  Suicide prevention services; 
C.  Behavioral health services for veterans with post-traumatic stress disorder or 
substance use disorder; 
D.  Outreach services to inform veterans of the availability of programs supported by 
the fund; 
E.  Counseling and peer assistance for veterans charged with crimes; 
F.  Cash assistance and emergency services for veterans in need; 
G.  Transportation services to and from essential medical services; and 
H.  Support for veterans seeking services from the United States Department of 
Veterans Affairs. 
3.  Report.  By February 15, 2019 and annually thereafter, the director shall submit 
to the joint standing committee of the Legislature having jurisdiction over veterans affairs 
a report describing the distribution of funds under this section, including information 
about the specific uses of the funds by state agencies or nonprofit entities that receive the 
funds. 
SUMMARY 
This bill establishes an excise tax on sugar-sweetened beverages, including syrups 
and powders used to make sugar-sweetened beverages.  Funds from the excise tax will be 
used to support the Drug Court Fund, the Veterans Fund, the Head Start Fund, the Drug 
Treatment Fund, the Obesity and Chronic Disease Fund, Healthy Food Access Fund, the 
After-school Program Fund and the Maine Drinking Water Fund.