An Act To Allow Regional Service Center Municipalities To Assess an Additional One Percent Sales Tax for Infrastructure Costs
Maine Legislature, Session 129, LD 0156
Committee: Taxation
Sponsors: MIRAMANT
Amends: 36 MRSA §1819

Legislative Document
No. 156
S.P. 43
In Senate, January 17, 2019
An Act To Allow Regional Service Center Municipalities To Assess 
an Additional One Percent Sales Tax for Infrastructure Costs
Reference to the Committee on Taxation suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator MIRAMANT of Knox.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §1819 is enacted to read:
§1819.  Municipal local option sales tax; service center communities
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 that is a service 
center community as defined in Title 30-A, section 4301, subsection 14-A may, by 
referendum conducted pursuant to subsection 8, impose a local option sales tax of no 
more than 1% on those items that are part of the sales tax base.  A participating 
municipality may not alter the range of items subject to sales taxation under this Part.
3.  Notify assessor.  A participating municipality shall notify the assessor at least 90 
days before the local option sales tax is effective.
4.  Administration.  A retailer 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.
5.  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 participating municipalities.
6.  Use of revenue by participating municipality.  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 
for the purpose of funding municipal infrastructure costs.
7.  Effect on revenue sharing and other state aid programs.  Revenue received by 
the State pursuant to subsection 4 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 4 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.
8.  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 purpose of funding local 
infrastructure costs?"
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.
9.  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 8 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.
SUMMARY
This bill allows a municipality that is a service center community to impose a local 
option sales tax of no more than 1% by local referendum for the purpose of funding local 
infrastructure costs.