An Act To Authorize a Local Option Sales Tax on Lodging and Other Goods and Provide Funding for Tax Abatement and Rental Relief
Maine Legislature, Session 130, LD 1342
Committee: Taxation
Sponsors: SYLVESTER
Amends: 30-A MRSA §4722, 36 MRSA §1820

Legislative Document
No. 1342
H.P. 993
House of Representatives, March 30, 2021
An Act To Authorize a Local Option Sales Tax on Lodging and 
Other Goods and Provide Funding for Tax Abatement and Rental 
Relief
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative SYLVESTER of Portland.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  30-A MRSA §4722, sub-§1, ¶FF, as amended by PL 2019, c. 555, §2, is 
further amended to read:
FF.  Provide grants to eligible homeowners who are served by private well water that 
shows evidence of high levels of arsenic contamination.  For purposes of this 
paragraph, "homeowner" includes an individual who occupies a single-family dwelling 
that is located on land that is owned by a member of that individual's immediate family 
and "immediate family" means a spouse, parent, child, sibling, stepchild, stepparent 
and grandparent; and
Sec. 2.  30-A MRSA §4722, sub-§1, ¶GG, as enacted by PL 2019, c. 555, §3, is 
amended by amending the first blocked paragraph to read:
Rules adopted under this paragraph are routine technical rules.; and
Sec. 3.  30-A MRSA §4722, sub-§1, ¶HH is enacted to read:
HH.  Create a program to provide property tax relief and rent relief using revenue from 
the local option sales tax imposed pursuant to Title 36, section 1820 and distributed to 
the Maine State Housing Authority under Title 36, section 1820, subsection 6, 
paragraph B.  The program must be available to a municipality that applies directly to 
the authority and that meets qualifications as established by the authority.  
The authority shall adopt routine technical rules pursuant to Title 5, chapter 375, 
subchapter 2-A to implement the provisions of this paragraph, including the application 
process and qualifications.
Sec. 4.  36 MRSA §1820 is enacted to read:
§1820.  Municipal local option sales tax on lodging; funding for rural development
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.
2.  Authorization to impose local option sales tax.  A municipality by referendum 
conducted pursuant to subsection 8 may impose a local option sales tax of 1% on the value 
of rental of living quarters in any hotel, rooming house or tourist or trailer camp.
3.  Local option sales tax limited to lodging.  A municipality may not impose a local 
option sales tax on 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.  Quarterly, 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.  Ninety percent to the participating municipality; and
B.  Ten percent to the Maine State Housing Authority to fund the property tax and rent 
relief program established pursuant to Title 30-A, section 4722, subsection 1, 
paragraph HH.
For the purposes of this subsection, the unorganized territory must receive reimbursement 
as if it is one 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.  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.
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 referendum question must indicate the rate of 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 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.
9.  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 
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 the municipality in 
the most recent gubernatorial election, except that no local option sales tax may take effect 
before July 1, 2022.
SUMMARY
This bill allows a municipality to impose a local option sales tax of 1% on lodging that 
is currently subject to the sales and use tax if approved by referendum of the voters in that 
municipality. Ninety percent of the revenue from the local option sales tax is distributed to 
the municipality imposing the local option sales tax.  The other 10% is distributed to the 
Maine State Housing Authority, which is required to establish a program of property tax 
relief and rent relief for municipalities using the revenue.
Revenue received by a municipality may not be used to reduce or eliminate funding 
otherwise due the municipality under other provisions of law.  The local option sales tax 
may not take effect before July 1, 2022.