An Act To Authorize a Local Option Sales Tax on Meals and Lodging and Provide Funding To Treat Opioid Use Disorder
Maine Legislature, Session 129, LD 1254
Committee: Taxation
Sponsors: SYLVESTER, CHIPMAN, FARNSWORTH, FOLEY, HARNETT, KESSLER, MOONEN, O'NEIL, SCHNECK
Amends: 36 MRSA §1819

Legislative Document
No. 1254
H.P. 915
House of Representatives, March 14, 2019
An Act To Authorize a Local Option Sales Tax on Meals and 
Lodging and Provide Funding To Treat Opioid Use Disorder
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative SYLVESTER of Portland.
Cosponsored by Senator CHIPMAN of Cumberland and
Representatives: FARNSWORTH of Portland, FOLEY of Biddeford, HARNETT of Gardiner, 
KESSLER of South Portland, MOONEN of Portland, O'NEIL of Saco, SCHNECK of Bangor.
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 on meals and lodging; funding for treatment 
of opioid use disorder
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Local option sales tax" means a sales tax imposed pursuant to subsection 2.
B.  "Participating municipality" means a municipality that has imposed a local option 
sales tax pursuant to this section.
C.  "Prepared food" does not include adult use marijuana or adult use marijuana 
products, as defined in Title 28-B, section 102, subsections 1 and 2, respectively.
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 prepared food and the value of rental of living quarters in any hotel, rooming 
house or tourist or trailer camp and may limit the period of time the tax is imposed to 
specified months of the year.
3.  Local option sales tax limited to taxable meals and lodging.  A municipality 
may not impose a local option sales tax on prepared food or the value of rental of living 
quarters of any hotel, rooming house or tourist or trailer camp not subject to tax pursuant 
to section 1811.
4.  Notify State Tax Assessor.  A participating municipality shall notify the assessor 
at least 90 days before the local option sales tax is effective.
5.  Administration.  A retailer in a participating municipality shall transfer the 
revenue from a 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 for that municipality to the 
Treasurer of State for distribution pursuant to this subsection.  From the net amount 
certified for a municipality under this subsection, the Treasurer of State shall make 
monthly payments as follows:
A.  To the participating municipality, 85% of the net amount; and
B.  To all other municipalities, 15% of the net amount.  Funds distributed pursuant to 
this paragraph must be used by the receiving municipality for the purposes of 
preventing and treating opioid use disorder in that municipality.
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 a local option sales tax.
7.  Use of revenue by participating municipality.  A participating municipality that 
receives funds pursuant to subsection 6, paragraph A shall use those funds for the 
purposes described in the referendum approved under subsection 9.
8.  Effect on revenue sharing and other state aid programs.  Revenue received 
pursuant to subsection 5 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 5 may not be used to reduce 
or eliminate any funding otherwise due a municipality under any provision of law 
providing aid to the 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 referendum question must indicate the rate of the local option sales tax, specify 
the months during which it will be imposed if not year-round and identify the purposes 
for which the revenue will be used.
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 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 tax under this subsection.
10.  Effective date of tax; acceptance by voters.  A 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.
SUMMARY
This bill allows a municipality to impose a local option sales tax, which may be 
seasonal, on prepared food, not including marijuana or marijuana products, and short-
term lodging of no more than 1% if approved by referendum of the voters in that 
municipality.  Revenue from the local option sales tax is distributed 85% to the 
municipality and 15% to all other municipalities.  The 15% distributed to a municipality 
must be used by that municipality for the purposes of preventing and treating opioid use 
disorder in that municipality.  Revenue received by a municipality may not be used to 
reduce or eliminate funding otherwise due the municipality under other provisions of law.