An Act To Clarify the Exemption from Income Tax and Withholding Tax Liability for Certain Out-of-state Suppliers of Spirits Purchased by the Bureau of Alcoholic Beverages and Lottery Operations
Maine Legislature, Session 130, LD 1937
Committee: Taxation
Sponsors: LUCHINI, TERRY, JACKSON, SANBORN, BICKFORD, CLOUTIER, FECTEAU
Amends: 36 MRSA §5202-D

Legislative Document
No. 1937
S.P. 671
In Senate, January 26, 2022
An Act To Clarify the Exemption from Income Tax and 
Withholding Tax Liability for Certain Out-of-state Suppliers of 
Spirits Purchased by the Bureau of Alcoholic Beverages and Lottery 
Operations
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203.
Reference to the Committee on Taxation suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator LUCHINI of Hancock.
Cosponsored by Representative TERRY of Gorham and
Senators: President JACKSON of Aroostook, SANBORN of Cumberland, Representatives: 
BICKFORD of Auburn, CLOUTIER of Lewiston, Speaker FECTEAU of Biddeford.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §5202-D is enacted to read:
§5202-D.  Exemption for certain out-of-state suppliers of spirits sold to the Bureau of 
Alcoholic Beverages and Lottery Operations
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Bureau" means the Bureau of Alcoholic Beverages and Lottery Operations within 
the Department of Administrative and Financial Services and includes a contractor or 
agent of the bureau.
B.  "Spirits" has the same meaning as in Title 28-A, section 2, subsection 31.
2.  No tax liability or nexus for sale, shipment or storage of spirits.  For tax years 
beginning on or after January 1, 2021, a person domiciled in another state that approves an 
order or request from outside this State for spirits placed by the bureau is not liable under 
this Part and may not be considered to have a sufficient nexus to impose liability for any 
tax imposed pursuant to this Part or to require a pass-through entity to withhold tax for any 
tax imposed pursuant to this Part based solely on the following in-state activities:  
A.  The sale of spirits to the bureau, regardless of whether the amount of the sales 
exceeds the thresholds for nexus specified in section 5200-B, subsection 1; 
B.  The shipment of spirits from outside this State to any warehouse operated or used 
by the bureau or to another facility as directed by the bureau;
C.   The storage of spirits at any warehouse operated by or used by the bureau or at 
another facility as directed by the bureau, regardless of whether the value of those 
spirits exceeds the thresholds for nexus specified in section 5200-B, subsection 1; or 
D.  Any other activity required by the bureau in order to facilitate the fulfillment of 
orders of spirits placed by the bureau.
Spirits manufactured or produced outside this State and brought into this State based on an 
order or request of the bureau when such order or request is approved from outside this 
State are not subject to tax liability under this Part notwithstanding any delay in transfer of 
title for those spirits or storage of those spirits at a warehouse operated or used by the 
bureau pending the transfer of title to the bureau. 
3.  Effect on protection or exemption from taxation due to other laws.  This section 
may not be construed to reduce any protection or exemption from taxation that arises under 
United States Code, Sections 381 to 384 or any other provision of law.  
4.  Rules.  The assessor shall adopt rules to implement this section.  Rules adopted 
pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A.
SUMMARY
This bill provides an exemption from income taxation or tax withholding for certain 
manufacturers of spirits or suppliers of spirits located outside the State that sell or ship 
spirits pursuant to an order or request placed by the Department of Administrative and 
Financial Services, Bureau of Alcoholic Beverages and Lottery Operations or an agent or 
contractor of the bureau.  The bill also clarifies that spirits manufactured or produced 
outside the State and brought into the State pursuant to an order or request of the bureau 
are exempt from taxation, regardless of whether those spirits are stored at a warehouse 
operated or used by the bureau or at another facility as directed by the bureau, and 
regardless of whether the amount of the sales or the value of those spirits exceeds the 
thresholds for the determination of nexus as specified in the Maine Revised Statutes, Title 
36, section 5200-B, subsection 1.