An Act To Amend the State Tax Laws
Maine Legislature, Session 130, LD 1216
Committee: Taxation
Sponsors: TERRY
Amends: 20-A MRSA §12545, 22 MRSA §2430, 36 MRSA §2519, 36 MRSA §5195, 36 MRSA §5196, 36 MRSA §5219-X, 36 MRSA §5242, 36 MRSA §1752, 36 MRSA §1754-B, 36 MRSA §1819, 36 MRSA §383, 36 MRSA §655, 36 MRSA §656, 36 MRSA §661, 36 MRSA §689, 36 MRSA §697, 36 MRSA §1760, 36 MRSA §5102, 36 MRSA §5200-B, 36 MRSA §5211, 30-A MRSA §5681, 36 MRSA §2551, 36 MRSA §2552, 36 MRSA §2556-A, 36 MRSA §2559

Legislative Document
No. 1216
H.P. 891
House of Representatives, March 24, 2021
An Act To Amend the State Tax Laws
(EMERGENCY)
Submitted by the Department of Administrative and Financial Services pursuant to Joint 
Rule 204.
Received by the Clerk of the House on March 22, 2021.  Referred to the Committee on 
Taxation pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 401.
ROBERT B. HUNT
Clerk
Presented by Representative TERRY of Gorham.
Emergency preamble.  Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, the spread of the novel coronavirus disease referred to as COVID-19 has 
created a public health emergency; and
Whereas, COVID-19 is a highly contagious and sometimes fatal disease; and
Whereas, in response to this widespread disease, the World Health Organization has 
declared a pandemic, the President of the United States has declared a national emergency 
and the Governor of Maine has declared a state of civil emergency; and
Whereas, state tax law needs to be updated to respond to certain COVID-19 impacts 
before the 90-day period expires to avoid delay in the processing of income tax returns for 
2020 and sales tax returns; and
Whereas, legislative action is immediately necessary to ensure continued and 
efficient administration of the state income and sales taxes and certain other state taxes; 
and
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore,
Be it enacted by the People of the State of Maine as follows:
PART A
Sec. A-1.  20-A MRSA §12545, as amended by PL 2015, c. 328, §1, is further 
amended to read:
§12545.  Report
By February 1, 2021 2022, each accredited Maine community college, college and 
university, as defined in section 12541, subsection 1, shall report to the department on 
efforts to promote the program and to train admissions and financial aid staff about the 
program.  By March February 1, 2021 2022, the department shall report findings and 
recommendations regarding the program to the joint standing committee of the Legislature 
having jurisdiction over education and cultural affairs and the joint standing committee of 
the Legislature having jurisdiction over taxation matters.  By March February 1, 2021 2022, 
the Department of Administrative and Financial Services, Bureau of Revenue Services, 
Office of Tax Policy shall report on implementation of the educational opportunity tax 
credit, including statistics on credits claimed, to the joint standing committee of the 
Legislature having jurisdiction over education and cultural affairs and the joint standing 
committee of the Legislature having jurisdiction over taxation matters.  The Office of Tax 
Policy, in conjunction with the State Economist and the Department of Labor, shall include 
in its report an analysis of the costs of the credits claimed and the impact of the program 
on the State's labor force.  After receipt and review of the information required under this 
section, the joint standing committee of the Legislature having jurisdiction over education 
and cultural affairs or the joint standing committee of the Legislature having jurisdiction 
over taxation matters may report out to the Legislature a bill regarding the program.
Sec. A-2.  22 MRSA §2430, sub-§3, as amended by PL 2017, c. 452, §21, is further 
amended to read:
3.  Uses of the fund.  The fund may be used for expenses of the department to 
administer this chapter or for research in accordance with subsection 5, as allocated by the 
Legislature.  To the extent that funds remain in the fund after the expenses of the 
department to administer this chapter and for research in accordance with subsection 5, any 
remaining funds must be used to fund:
A.  The cost of the tax deductions provided pursuant to Title 36, section 5122, 
subsection 2, paragraph PP and Title 36, section 5200‑A, subsection 2, paragraph BB. 
By June 1st annually, the State Tax Assessor shall determine the cost of those 
deductions during the prior calendar year and report that amount to the State Controller, 
who shall transfer that amount from the remaining funds in the fund to the General 
Fund; and
B.  The cost of the position in the Department of Administrative and Financial Services, 
Bureau of Revenue Services to administer the tax deductions provided pursuant to Title 
36, section 5122, subsection 2, paragraph PP and Title 36, section 5200‑A, subsection 
2, paragraph BB. By June 1st annually, the Commissioner of Administrative and 
Financial Services shall determine the cost of the position in the bureau to administer 
those deductions during the prior calendar year and report that amount to the State 
Controller, who shall transfer that amount from the remaining funds in the fund to the 
General Fund.
Sec. A-3.  36 MRSA §2519, as amended by PL 2011, c. 548, §18, is further amended 
to read:
§2519.  Ratio of tax on foreign insurance companies
An insurance company incorporated by in the District of Columbia, a state or 
possession of the United States or province of Canada whose laws impose upon insurance 
companies chartered by this State a greater tax than is provided in this chapter shall pay the 
same tax upon business done by it in this State, in place of the tax provided in any other 
section of this chapter.  If the insurance company fails to pay the tax as provided in section 
2521-A, the assessor shall certify that failure to the Superintendent of Insurance, who shall 
suspend the insurance company's right to do business in this State.  For purposes of this 
section, an insurance company incorporated by another country is deemed to be 
incorporated by the state, district or possession of the United States where it has elected to 
make its deposit and establish its principal agency in the United States.  For nonadmitted 
insurance premiums subject to section 2531, the rate applied pursuant to this section must 
be the highest rate that the state, district, possession or province applies to nonadmitted 
insurance premiums taxed in that state, district or possession or province.
Sec. A-4.  36 MRSA §5195, sub-§7, as enacted by PL 2019, c. 380, §2, is amended 
to read:
7.  Federal adjustment.  "Federal adjustment" means an adjustment to an item or 
amount determined under the Code that affects the computation of a taxpayer's Maine tax 
liability resulting from a partnership-level audit or other action by the IRS or an amended 
federal return, refund claim or administrative adjustment request filed by a taxpayer.  A 
federal adjustment is positive to the extent that it increases taxable income and is negative 
to the extent that it decreases taxable income, as determined under this Part.
Sec. A-5.  36 MRSA §5196, sub-§1, as enacted by PL 2019, c. 380, §2, is amended 
to read:
1.  General rule.  Except in the case of final federal adjustments required to be reported 
for federal purposes under the Code, Section 6225(a)(2) under federal law or regulations 
to be taken into account by the partnership in the partnership return for the adjustment year 
or other year, a partner shall, in accordance with section 5227‑A, report and pay any amount 
due with respect to adjustments arising from a partnership-level audit or other action by the 
IRS that is reported by the taxpayer on a timely filed amended federal income tax return, 
including a return or other similar report filed pursuant to the Code, Section 6225(c)(2), or 
a federal claim for refund by filing a federal adjustments report with the assessor for the 
reviewed year and, if applicable, paying the additional tax, penalties and interest due no 
later than 180 days after the final determination date.
In the case of a partnership with partners required to file a federal adjustments report 
pursuant to this subsection and included in a composite return or subject to withholding 
under section 5250‑B in the reviewed year, the partnership shall file an amended composite 
return and amended withholding return as required by the assessor and pay any additional 
tax, penalties and interest due no later than 180 days after the final determination date.
Sec. A-6.  36 MRSA §5196, sub-§3, as enacted by PL 2019, c. 380, §2, is amended 
to read:
3.  Partnership reporting and payment.  An audited partnership or a partnership that 
has filed an administrative adjustment request is subject to tax with respect to final federal 
adjustments without regard to the election under the Code, Section 6226(a).  The amount 
of tax is determined as provided in this subsection.
A.  An audited partnership or a partnership that has filed an administrative adjustment 
request shall file a completed federal adjustments report, including the distributive 
share of the adjustment paid by partners under subsection 1 and other information 
required by the assessor, and, if subject to tax under this subsection, pay the tax due no 
later than 180 days after the final determination date.
B.  The tax due or a refund allowed pursuant to this subsection is determined as follows:
(1)  Exclude from final federal adjustments the distributive share of adjustments 
properly allocable to partners pursuant to subsection 1 and adjustments required 
under federal law or regulations to be taken into account by the partnership in the 
partnership return for the adjustment year or other year;
(2)  Exclude from final federal adjustments the distributive share of adjustments 
reported to direct exempt partners not subject to tax on unrelated business taxable 
income;
(3)  For the total distributive shares of the remaining final federal adjustments, 
remove the portion of such adjustments this State is prohibited from taxing under 
the Constitution of Maine or the United States Constitution, net of any expenses 
incurred in production of that income, that are not otherwise excluded pursuant to 
this paragraph;
(4)  For the total distributive shares of the remaining final federal adjustments 
reported to direct corporate partners subject to tax under chapter 817, and to direct 
exempt partners subject to tax on unrelated business taxable income, apportion and 
allocate such adjustments as provided under chapter 821 and multiply the resulting 
amount by the highest tax rate under section 5200;
(5)  For the total distributive shares of the remaining final federal adjustments 
reported to direct partners that are nonresident partners subject to tax under section 
5111 or 5160, determine the amount of such adjustments that is Maine-source 
income under sections 5142 and 5192 and multiply the resulting amount by the 
highest tax rate under section 5111 for the applicable tax year;
(6)  For the total distributive shares of the remaining final federal adjustments 
reported to tiered partners:
(a)  Determine the amount of such adjustments that is of a type that would be 
subject to sourcing under section 5142, excluding section 5142, subsection 3, 
and calculate the portion of this amount sourced to this State;
(b)  Determine the amount of such positive adjustments that is income of a type 
that would not be subject to sourcing by a nonresident partner under section 
5142, subsection 3; and
(c)  Determine the portion of the amount positive adjustments determined in 
division (b) that can be established to the satisfaction of the assessor to be 
properly allocable to indirect partners that are nonresident partners or other 
partners not subject to tax on the adjustments;
(d)  Determine the amount of such negative adjustments that is of a type that 
would not be subject to sourcing by a nonresident partner under section 5142; 
and
(e)  Determine the portion of negative adjustments determined in division (d) 
that can be established to the satisfaction of the assessor to be properly 
allocable to indirect partners that are resident partners or other partners subject 
to tax on the adjustments;
(7)  Multiply the total of the amounts determined in subparagraph (6), divisions (a) 
and (b), reduced by the amount determined in subparagraph (6), division divisions 
(c) and (e), by the highest tax rate under section 5111;
(8)  For the total distributive shares of the remaining final federal adjustments 
reported to resident direct partners subject to tax under section 5111 or 5160, 
multiply that amount by the highest tax rate under section 5111 for the applicable 
tax year; and
(9)  Add the amounts determined in subparagraphs (4), (5), (7) and (8), along with 
interest and penalties as provided in sections 186 and 187‑B, respectively.;
(10)  If the result in subparagraph (9) is a positive amount, compute interest and 
penalties pursuant to sections 186 and 187-B, respectively, and add these amounts 
to the amount computed in subparagraph (9); and
(11)  A negative amount computed pursuant to subparagraph (9) must be treated 
as an overpayment of tax by the partnership for which a claim for refund may be 
made by the partnership.
C.  Notwithstanding section 5219‑H, a partnership may not claim any of the credits in 
chapter 822 against the tax imposed by this subsection.  However, a partnership may 
claim a credit for income taxes imposed on and paid by the partnership to another state 
of the United States, a political subdivision of any such state, the District of Columbia 
or any political subdivision of a foreign country that is analogous to a state of the 
United States with respect to the distributive shares of the final federal adjustments 
reported to resident direct partners included in the calculation pursuant to paragraph B, 
subparagraph (8) and paid by the partnership to this State.  The credit under this 
paragraph is calculated in the same manner as the credit allowed by section 5217‑A.
Sec. A-7.  36 MRSA §5196, sub-§4, as enacted by PL 2019, c. 380, §2, is amended 
to read:
4.  Tiered partners.  The direct partners and indirect partners of an audited partnership 
or of a partnership that has filed an administrative adjustment request that are tiered 
partners, and all the partners of those tiered partners that are subject to tax under section 
5111, 5160 or 5200, are subject to the reporting and payment requirements of this section.
Sec. A-8.  36 MRSA §5196, sub-§5, as enacted by PL 2019, c. 380, §2, is amended 
to read:
5.  Effect of partnership reporting and payment of amounts due.  Except for 
adjustments required to be reported and the tax paid under subsection 1 and adjustments 
required under federal law or regulations to be taken into account by the partnership in the 
partnership return for the adjustment year or other year, the proper reporting of final federal 
adjustments and payment of amounts due by a partnership under subsections 3 and 4 
relieves the partners of the partnership of any tax liability resulting from their distributive 
shares of the adjustments so reported.  The direct partners or indirect partners may not take 
any deduction or credit for this amount or claim a refund of the amount in this State.  The 
direct partners or indirect partners may not take a deduction, credit or refund with respect 
to any negative adjustment accounted for in subsection 3, paragraph B, subparagraphs (2) 
to (11).
Sec. A-9.  36 MRSA §5196, sub-§6, as enacted by PL 2019, c. 380, §2, is amended 
to read:
6.  Failure of audited partnership, partnership that has filed an administrative 
adjustment request or tiered partner to report or pay.  Nothing in this This section 
prevents does not prevent the assessor from assessing direct partners or indirect partners 
for taxes they owe, using the best information available, in the event that a partnership or 
tiered partner fails to timely make any report or payment required by this subchapter for 
any reason.
Sec. A-10.  36 MRSA §5219-X, sub-§6 is enacted to read:
6.  Reporting.  A taxpayer allowed a credit under subsection 2 shall report to the 
Department of Economic and Community Development, for each tax credit awarded, the 
dollar amount of the tax credit, the number of direct manufacturing jobs created and the 
dollar amount of capital investment in manufacturing.
Sec. A-11.  36 MRSA §5219-XX, as enacted by PL 2019, c. 628, §3, is amended to 
read:
§5219-XX.  Renewable chemicals tax credit
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Biobased content" means the total mass of organic carbon derived from renewable 
biomass, expressed as a percentage, determined by testing representative samples using 
the ASTM International D6866 standard test methods.
B.  "Renewable biomass" has the same meaning as in 7 United States Code, Section 
8101(13).
C.  "Renewable chemical" means a substance, compound or mixture that:
(1)  Is the product of, or reliant upon, biological conversion, thermal conversion or 
a combination of biological and thermal conversion of renewable biomass;
(2)  Is sold or used:
(a)  For the production of chemical products, polymers, plastics or formulated 
products; or
(b)  As a chemical, polymer, plastic or formulated product;
(3)  Is not less than 95% biobased content; and
(4)  Is not sold or used for production of, or sold as, any food, feed or fuel, including 
any biofuel as defined under section 5219-X, subsection 1, except that "renewable 
chemical" may include:
(a)  Cellulosic sugars used to produce aquaculture feed; and
(b)  A food additive, supplement, vitamin, nutraceutical or pharmaceutical that 
does not provide caloric value and is not considered food or feed.
2.  Credit allowed.  A taxpayer engaged in the production of renewable chemicals in 
the State who has complied with subsection 5 and the rules adopted under that subsection 
is allowed a credit against the tax imposed by this Part on income derived during the taxable 
year from the production of renewable chemicals in the amount of 8¢ per pound of 
renewable chemical produced in the State as long as the taxpayer demonstrates to the 
Department of Economic and Community Development that at least 75% of the employees 
of the contractors hired or retained to harvest renewable biomass used in the production of 
the renewable chemicals meet the eligibility conditions specified in the Employment 
Security Law.
If the taxpayer does not contract directly with those hired or retained to harvest the 
renewable biomass, the taxpayer may obtain the necessary documentation under this 
subsection from the landowner or other entity that contracts directly.
3.  Reporting.  A taxpayer allowed a credit under subsection 2 shall report to the 
Department of Economic and Community Development, for each tax credit awarded, the 
dollar amount of the tax credit, the number of direct manufacturing jobs created, the number 
of related indirect jobs created and the dollar amount of capital investment in 
manufacturing.  Indirect jobs include but are not limited to jobs in logging and support 
services.
4.  Limitation.  A person entitled to a tax credit under this section for any taxable year 
may carry over and apply the portion of any unused credits to the tax liability on income 
derived from the production of renewable chemicals for any one or more of the next 
succeeding 10 taxable years. The credit allowed, including carryovers, may not reduce the 
tax otherwise due under this Part to less than zero.
5.  Information reporting and 3rd-party testing; rules.  A taxpayer engaged in the 
production of renewable chemicals that is claiming a credit under subsection 2 shall provide 
information to the assessor regarding the renewable chemicals being produced, including 
the weight of renewable chemicals produced during the tax year, the type of renewable 
biomass utilized and any other information required by the assessor to determine 
compliance with this section.  The assessor shall adopt rules requiring 3rd-party testing of 
the renewable chemicals to ensure the accuracy of the reported information.  Rules adopted 
pursuant to his subsection are routine technical rules as provided in Title 5, chapter 375, 
subchapter 2-A.
This section applies to tax years beginning on or after January 1, 2021.
Sec. A-12.  36 MRSA §5242, as amended by PL 2017, c. 211, Pt. D, §12, is further 
amended by adding at the end a new paragraph to read:
A person who is required by the assessor to furnish a return of information in 
accordance with this section on or after January 31, 2022 and who fails to do so, or who 
willfully furnishes a false or fraudulent return of information, is subject to a penalty of $50 
for each such failure.
Sec. A-13.  PL 2019, c. 628, §4 is amended to read: 
Sec. 4. Report.  By February 1, 2024, the Department of Economic and Community 
Development shall submit a report relating to the usage of the renewable chemicals tax 
credit under the Maine Revised Statutes, Title 36, section 5219-XX and the biofuel 
commercial production and commercial use tax credit under Title 36, section 5219-X to 
the joint standing committees of the Legislature having jurisdiction over taxation and 
innovation, development, economic advancement and business matters. Notwithstanding 
Title 36, section 191, the State Tax Assessor may disclose to an authorized representative 
of the Department of Economic and Community Development information required to 
prepare this report. The report must include:
1.  For each tax credit awarded:
A.  The dollar amount of the tax credit;
B.  The number of direct manufacturing jobs created and the number of related indirect 
jobs created; and
C.  The dollar amount of capital investment in manufacturing; and
2.  The amount in pounds of renewable chemical and gallons of biofuel produced for 
which the a credit was claimed.
Sec. A-14.  Effective date.  This Part takes effect 90 days following adjournment of 
the First Regular Session of the 130th Legislature.
PART B
Sec. B-1.  36 MRSA §1752, sub-§5 is amended to read:
5.  In this State or in the State.  "In this State" or "in the State" means within the 
exterior limits of the State of Maine and includes all territory within these limits owned by 
or ceded to the United States of America and includes sales of tangible personal property 
and taxable services sourced in this State pursuant to section 1819.
Sec. B-2.  36 MRSA §1754-B, sub-§1-A, as amended by PL 2019, c. 401, Pt. B, 
§10 and c. 441, §3, is repealed.
Sec. B-3.  36 MRSA §1754-B, sub-§1-B, as enacted by PL 2019, c. 401, Pt. B, §11 
and by PL 2019, c. 441, §4, is repealed and the following enacted in its place:
1-B.  Persons required to register.  Except as otherwise provided in this section and 
section 1951-C, the following persons, other than casual sellers, shall register with the 
assessor and collect and remit taxes in accordance with the provisions of this Part:
A.  Every person that has a substantial physical presence in this State and that makes 
sales of tangible personal property or taxable services in this State, including, but not 
limited to:
(1)  Every person that makes sales of tangible personal property or taxable services, 
whether or not at retail, that maintains in this State any office, manufacturing 
facility, distribution facility, warehouse or storage facility, sales or sample room or 
other place of business;
(2)  Every person that makes sales of tangible personal property or taxable services 
that does not maintain a place of business in this State but makes retail sales in this 
State or solicits orders, by means of one or more salespeople within this State, for 
retail sales within this State; and
(3)  Every lessor engaged in the leasing of tangible personal property located in 
this State that does not maintain a place of business in this State but makes retail 
sales to purchasers from this State;
B.  Every person that makes sales of tangible personal property or taxable services in 
this State if the person's gross sales from delivery of tangible personal property or 
taxable services into this State in the previous calendar year or current calendar year 
exceeds $100,000;
C.  Every person that has a substantial physical presence in this State and that makes 
retail sales in this State of tangible personal property or taxable services on behalf of a 
principal that is outside of this State if the principal is not the holder of a valid 
registration certificate;
D.  Every agent, representative, salesperson, solicitor or distributor that has a 
substantial physical presence in this State and that receives compensation by reason of 
sales of tangible personal property or taxable services made outside this State by a 
principal for use or other consumption in this State;
E.  Every person that manages or operates in the regular course of business or on a 
casual basis a hotel, rooming house or tourist or trailer camp in this State or that collects 
or receives rents on behalf of a hotel, rooming house or tourist or trailer camp in this 
State;
F.  Every person that operates a transient rental platform and reserves, arranges for, 
offers, furnishes or collects or receives consideration for the rental of living quarters in 
this State;
G.  Every room remarketer;
H.  Every person that makes retail sales in this State of tangible personal property or 
taxable services on behalf of the owner of that property or the provider of those 
services;
I.  Every person not otherwise required to be registered that sells tangible personal 
property to the State and is required to register as a condition of doing business with 
the State pursuant to Title 5, section 1825-B;
J.  Every person that holds a wine direct shipper license under Title 28-A, section 
1403-A; and
K.  A marketplace facilitator if the marketplace facilitator's gross sales of tangible 
personal property or taxable services in this State in the previous calendar year or 
current calendar year exceeds $100,000.
For the purposes of this paragraph, the marketplace facilitator's gross sales include 
sales facilitated on behalf of marketplace sellers and any sales of tangible personal 
property or taxable services made directly by the marketplace facilitator.
Sec. B-4.  36 MRSA §1819, sub-§2, as enacted by PL 2019, c. 401, Pt. B, §18, is 
amended to read:
2.  Sourcing for sales of tangible personal property and taxable services.  The retail 
sale of tangible personal property or a taxable service is sourced in this State pursuant to 
this subsection.
A.  When the tangible personal property or taxable service is received by the purchaser 
at a business location of the seller, the sale is sourced to that business location.
B.  When the tangible personal property or taxable service is not received by the 
purchaser at a business location of the seller, the sale is sourced to the location where 
receipt by the purchaser or the purchaser's donee occurs, including the location 
indicated by instructions for delivery to the purchaser or donee known to the seller.
C.  For a sale when paragraphs A and B do not apply, the sale is sourced to the location 
indicated by an address for the purchaser that is available from the business records of 
the seller that are maintained in the ordinary course of the seller's business when use of 
this address does not constitute bad faith.
D.  For a sale when paragraphs A to C do not apply, the sale is sourced to the location 
indicated by an address for the purchaser obtained during the consummation of the 
sale, including the address of a purchaser's payment instrument, if no other address is 
available, when use of this address does not constitute bad faith.
E.  When paragraphs A to D do not apply, including the circumstance in which the 
seller is without sufficient information to apply paragraphs A to D, the location is 
determined by the address from which tangible personal property was shipped, from 
which the tangible personal property or taxable service transferred electronically was 
first available for transmission by the seller or from which the service was provided, 
disregarding for these purposes any location that merely provided the digital transfer 
of the tangible personal property or taxable service sold.
Sec. B-5.  Application.  This Part applies to sales occurring on or after January 1, 
2022.
Sec. B-6.  Effective date.  This Part takes effect 90 days following adjournment of 
the First Regular Session of the 130th Legislature.
PART C
Sec. C-1.  36 MRSA §383, sub-§2, as enacted by PL 1999, c. 487, §1, is amended 
to read:
2.  Assessment ratio.  The State Tax Assessor may establish procedures and adopt 
rules, in accordance with the Maine Administrative Procedure Act, designed to ensure that 
the ratio certified declared by the municipal assessors or the assessors of primary assessing 
areas is accurate within 20% 10% of the state valuation ratio last determined, unless 
adequate evidence is presented to the State Tax Assessor by the municipalities to justify a 
different assessment ratio.
Sec. C-2.  36 MRSA §655, sub-§1, ¶U, as enacted by PL 2019, c. 440, §3, is 
amended by repealing the 2nd blocked paragraph.
Sec. C-3.  36 MRSA §656, sub-§1, ¶K, as enacted by PL 2019, c. 440, §4, is 
amended by repealing the 2nd blocked paragraph.
Sec. C-4.  36 MRSA §661, sub-§6 is enacted to read:
6.  Audits; determinations of bureau.  The bureau may audit the records of a 
municipality to ensure compliance with this subchapter.  The bureau may independently 
review the records of a municipality to determine if exemptions subject to reimbursement 
under this section have been properly approved.  If the bureau determines that an exemption 
was improperly approved, the bureau shall ensure, either by setoff against other payments 
due the municipality or otherwise, that the municipality is not reimbursed for the 
exemption.  A municipality that is aggrieved by a determination of the bureau under this 
section may appeal pursuant to section 151.
Sec. C-5.  36 MRSA §689, as enacted by PL 1997, c. 643, Pt. HHH, §3 and affected 
by §10, is amended to read:
§689.  Audits; determinations of bureau
The bureau has the authority to may audit the records of a municipality to ensure 
compliance with this subchapter.  The bureau may independently review the records of a 
municipality to determine if homestead exemptions have been properly approved.  If the 
bureau determines that a homestead exemption was improperly approved, the bureau shall 
ensure, either by setoff against other payments due the municipality or otherwise, that the 
municipality is not reimbursed for the exemption.  A municipality that is aggrieved by a 
determination of the bureau under this subchapter section may appeal pursuant to section 
151.
Sec. C-6.  36 MRSA §697, as amended by PL 2017, c. 211, Pt. A, §11, is further 
amended to read:
§697.  Audits; determination of bureau
The bureau may audit the records of a municipality to ensure compliance with this 
subchapter.  The bureau may independently review the records of a municipality to 
determine if exemptions have been properly approved.  If the bureau determines that an 
exemption was improperly approved for any of the 3 years immediately preceding the 
determination, the bureau shall ensure, by setoff against other payments due the 
municipality under this subchapter or subchapter 4-B or otherwise, that the municipality is 
not reimbursed for the exemption.  A municipality that is aggrieved by a determination of 
the bureau under this subchapter section may appeal pursuant to section 151.
Sec. C-7.  Effective date.  This Part takes effect 90 days following adjournment of 
the First Regular Session of the 130th Legislature.
PART D
Sec. D-1.  36 MRSA §1760, sub-§45, ¶A-4, as corrected by RR 2011, c. 2, §40, is 
amended to read:
A-4.  If the property is brought into this State solely to conduct activities directly related 
to a declared state disaster or emergency, at the request of the State, a county, city, 
town or political subdivision of the State or a registered business, the property is owned 
by a person not otherwise required to register as a seller under section 1754‑B and the 
property is present in this State only during a disaster period.  As used in this paragraph, 
"declared state disaster or emergency" has and "disaster period" have the same meaning 
as in Title 10, section 9902, subsection subsections 1 and "disaster period" means the 
period of 60 days that begins with the date of the Governor's proclamation of a state of 
emergency or the declaration by the President of the United States of a major disaster 
or major emergency, whichever occurs first 2, respectively; or
Sec. D-2.  36 MRSA §5102, sub-§6-C, as enacted by PL 2011, c. 622, §4 and 
affected by §7, is amended to read:
6-C.  Disaster period.  "Disaster period" means the period of 60 days that begins with 
the date of the Governor's proclamation of a state of emergency or the declaration by the 
President of the United States of a major disaster or major emergency, whichever occurs 
first has the same meaning as in Title 10, section 9902, subsection 2.
Sec. D-3.  Educational opportunity tax credit.  For tax years beginning in 2020, 
for purposes of the educational opportunity tax credit allowed pursuant to the Maine 
Revised Statutes, Title 36, section 5217-D, a qualified individual who worked in this State 
immediately prior to, or at any point during, the state of emergency declared by the 
Governor due to the pandemic related to coronavirus disease 2019, also known as 
COVID-19, is deemed to have worked in this State for the entire state of emergency.
Sec. D-4.  Machinery or equipment used in production.  The definition of 
"primarily" in the Maine Revised Statutes, Title 36, section 1752, subsection 9-A, is 
modified by replacing "time" with "days in use" if the 2-year period described in that 
definition includes any portion of the state of emergency declared by the Governor due to 
the pandemic related to coronavirus disease 2019, also known as COVID-19.
Sec. D-5.  Credit for income tax paid to other taxing jurisdictions.  For tax 
years beginning in 2020, when determining whether compensation for personal services 
performed as an employee teleworking from a location in this State is derived from sources 
in another jurisdiction for purposes of the credit for income tax paid to other taxing 
jurisdictions, allowed pursuant to the Maine Revised Statutes, Title 36, section 5217-A, 
notwithstanding section 5142, the compensation is sourced to that jurisdiction if:
1.  The employee was engaged in performing services from a location outside of Maine 
immediately prior to a state of emergency declared by the Governor due to the pandemic 
related to coronavirus disease 2019, referred to in this section as COVID-19, or declared 
by the jurisdiction where the employee was engaged in performing those services;
2.  The employee commenced working remotely from this State due to the COVID-19 
pandemic and during either this State's or the other jurisdiction's state of emergency related 
to the COVID-19 pandemic;
3.  The services were performed prior to January 1, 2021 and during either this State's 
or the other jurisdiction's state of emergency; 
4.  The compensation is sourced by that jurisdiction as derived from or connected with 
sources in that jurisdiction under the law of that jurisdiction; and
5.  The employee does not qualify for an income tax credit in that jurisdiction for Maine 
income taxes paid as a result of the compensation.
The State Tax Assessor may adopt routine technical rules as defined in Title 5, chapter 
375, subchapter 2-A as necessary to implement this section.
PART E
Sec. E-1.  36 MRSA §5102, sub-§10, as amended by PL 2011, c. 655, Pt. QQ, §4 
and affected by §8, is further amended to read:
10.  Taxable corporation.  "Taxable corporation" means, for any taxable year, a 
corporation that has nexus with this State pursuant to section 5200-B, including any 
corporation with income subject to federal tax under the Code, Section 1374 or 1375, and 
that has, at any time during that taxable year, realized Maine net income and includes any 
S corporation with realized Maine net income that is subject to federal tax under the Code, 
Section 1374 and 1375.
Sec. E-2.  36 MRSA §5200-B is enacted to read:
§5200-B.  Corporate income tax nexus
1.  Nexus established.  A corporation has nexus with this State, for the purposes of the 
tax imposed under section 5200, if that corporation:
A.  Is organized or commercially domiciled in this State; or 
B.  Is organized or commercially domiciled outside this State, if the corporation's 
property, payroll or sales, as calculated pursuant to subsection 2, in this State exceed 
any of the following thresholds for the taxable year:
(1)  For property, $250,000;
(2)  For payroll, $250,000;
(3)  For sales, $500,000; or 
(4)  Twenty-five percent of the corporation's property, payroll or sales.
2.  Property, payroll and sales defined; calculation.  For purposes of this section, 
property, payroll and sales are calculated as provided under chapter 821 and associated 
rules adopted by the assessor, except that the sales calculation does not exclude sales of 
tangible personal property under section 5211, subsection 14, paragraph B. For a taxpayer 
permitted or required to use a special apportionment method under section 5211, subsection 
17, the property, payroll and sales used to determine nexus under this section must be 
consistent with the property, payroll and sales used for the special apportionment method.
3.  Corporate partners.  A corporation that holds an interest directly or indirectly in 
a partnership has nexus with this State if the partnership is organized or commercially 
domiciled in this State or if the partnership's property, payroll or sales, as calculated 
pursuant to subsection 2, in this State exceed any of the thresholds in subsection 1, 
paragraph B.
4.  Federal protection.  A state that is without jurisdiction to impose a tax on the net 
income of a taxpayer because that taxpayer comes under the protection of 15 United States 
Code, Sections 381 to 384, does not gain jurisdiction to impose such a tax because the 
taxpayer's property, payroll or sales in the State exceed a threshold established in 
subsection 1.
Sec. E-3.  36 MRSA §5211, sub-§14, as amended by PL 2009, c. 571, Pt. GG, §1 
and affected by §2, is further amended to read:
14.  Sales factor formula.  The sales factor is a fraction, the numerator of which is the 
total sales of the taxpayer in this State during the tax period, and the denominator of which 
is the total sales of the taxpayer everywhere during the tax period.  For purposes of 
calculating the sales factor, "total sales of the taxpayer" includes sales of the taxpayer and 
of any member of an affiliated group with which the taxpayer conducts a unitary business. 
The formula must exclude from both the numerator and the denominator sales of tangible 
personal property delivered or shipped by the taxpayer, regardless of F.O.B. point or other 
conditions of the sale, to a purchaser within a state in which the taxpayer is not taxable 
within the meaning of subsection 2, unless any member of an affiliated group with which 
the taxpayer conducts a unitary business is taxable in that state in the same manner as a 
taxpayer is taxable under subsection 2.
A.  For purposes of calculating the sales factor, "total sales of the taxpayer" includes 
sales of the taxpayer and of any member of an affiliated group with which the taxpayer 
conducts a unitary business.
B.  The sales factor formula must exclude from both the numerator and the denominator 
sales of tangible personal property delivered or shipped by the taxpayer, regardless of 
F.O.B. point or other conditions of the sale, to a purchaser within a state in which the 
taxpayer is not taxable within the meaning of subsection 2, unless any member of an 
affiliated group with which the taxpayer conducts a unitary business is taxable in that 
state in the same manner as a taxpayer is taxable under subsection 2.
Sec. E-4.  Application.  This Part applies to tax years beginning on or after January 
1, 2022.
Sec. E-5.  Effective date.  This Part takes effect 90 days following adjournment of 
the First Regular Session of the 130th Legislature.
PART F
Sec. F-1.  30-A MRSA §5681, sub-§5, as amended by PL 2019, c. 343, Pt. H, §1, 
is further amended to read:
5.  Transfers to funds.  No later than the 10th day of each month, the State Controller 
shall transfer to the Local Government Fund 5% of the receipts during the previous month 
from the taxes imposed under Title 36, Parts 3 and 8, and Title 36, section 2552, subsection 
1, paragraphs A to F and, L and N, and credited to the General Fund without any reduction, 
except that for fiscal years 2015-16, 2016-17, 2017-18 and 2018-19 the amount transferred 
is 2%, for fiscal year 2019‑20 the amount transferred is 3% and for fiscal year 2020‑21 the 
amount transferred is 3.75% of the receipts during the previous month from the taxes 
imposed under Title 36, Parts 3 and 8, and Title 36, section 2552, subsection 1, paragraphs 
A to F and, L and N, and credited to the General Fund without any reduction, and except 
that the postage, state cost allocation program and programming costs of administering 
state-municipal revenue sharing may be paid by the Local Government Fund.  A percentage 
share of the amounts transferred to the Local Government Fund each month must be 
transferred to the Disproportionate Tax Burden Fund and distributed pursuant to subsection 
4‑B as follows:
C.  For months beginning on or after July 1, 2009 but before July 1, 2010, 15%;
D.  For months beginning on or after July 1, 2010 but before July 1, 2011, 16%;
E.  For months beginning on or after July 1, 2011 but before July 1, 2012, 17%;
F.  For months beginning on or after July 1, 2012 but before July 1, 2013, 18%;
G.  For months beginning on or after July 1, 2013 but before July 1, 2014, 19%; and
H.  For months beginning on or after July 1, 2014, 20%.
Sec. F-2.  36 MRSA §2551, sub-§2-B is enacted to read:
2-B.  Digital audiovisual and digital audio services.  "Digital audiovisual and digital 
audio services" means the electronic transfer of digital audiovisual works and digital audio 
works to an end user with the right of less than permanent use granted by the seller, 
including when conditioned upon continued payment from the purchaser or a subscription.
For purposes of this subsection:
A.  "End user" means a person other than a person who receives by contract a product 
transferred electronically for further commercial broadcast, rebroadcast, transmission, 
retransmission, licensing, relicensing, distribution, redistribution or exhibition of the 
product, in whole or in part, to another person;
B.  "Permanent" means perpetual or for an indefinite or unspecified length of time;
C.  "Subscription" means an agreement with a seller that grants a purchaser the right to 
obtain products transferred electronically, in a fixed quantity or for a fixed period of 
time, or both; and
D.  "Transfer electronically" or "electronic transfer" means obtainment by the 
purchaser by means other than tangible storage media.
Sec. F-3.  36 MRSA §2551, sub-§2-C is enacted to read:
2-C.  Digital audiovisual works.  "Digital audiovisual works" means a series of related 
digital images that, when shown in succession, impart an impression of motion, together 
with accompanying sounds, if any.
Sec. F-4.  36 MRSA §2551, sub-§2-D is enacted to read:
2-D.  Digital audio works.  "Digital audio works" means works that result from the 
fixation of a series of digital musical, spoken or other sounds, including ringtones.  For 
purposes of this subsection, "ringtones" means digitized sound files that are downloaded 
onto a device and that may be used to alert the purchaser with respect to a communication.
Sec. F-5.  36 MRSA §2552, sub-§1, ¶L, as amended by PL 2013, c. 368, Pt. 
OOOO, §3, is further amended to read:
L.  Ancillary services; and
Sec. F-6.  36 MRSA §2552, sub-§1, ¶M, as enacted by PL 2013, c. 368, Pt. OOOO, 
§4, is amended to read:
M.  Group residential services for persons with brain injuries.; and
Sec. F-7.  36 MRSA §2552, sub-§1, ¶N is enacted to read:
N.  Digital audiovisual and digital audio services.
Sec. F-8.  36 MRSA §2556-A is enacted to read:
§2556-A.  Sourcing for sales of digital audiovisual and digital audio services
The sale of digital audiovisual and digital audio services is sourced in this State 
pursuant to this section. 
1.  Sourced to address of purchaser in seller's business records.  The sale of digital 
audiovisual and digital audio services is sourced to the location indicated by an address for 
the purchaser that is available from the business records of the seller that are maintained in 
the ordinary course of the seller's business when use of this address does not constitute bad 
faith. 
2.  Sourced to address of purchaser not in seller's business records.  For a sale 
when subsection 1 does not apply, the sale of digital audiovisual and digital audio services 
is sourced to the location indicated by an address for the purchaser obtained during the 
consummation of the sale, including the address of a purchaser's payment instrument, if no 
other address is available, when use of this address does not constitute bad faith. 
3.  Sourced to address from which service provided.  For a sale when subsections 1 
and 2 do not apply, including the circumstance in which the seller is without sufficient 
information to apply subsection 1 or 2, the sale of digital audiovisual and digital audio 
services is sourced to the address from which the services were provided, disregarding for 
these purposes any location that was merely the site from which the digital transfer of the 
product sold was provided. 
4.  Mobile telecommunications service providers.  Notwithstanding subsections 1 to 
3, the sale of digital audiovisual and digital audio services by a provider of mobile 
telecommunications service is sourced in the same manner as mobile telecommunications 
services pursuant to section 2556.
Sec. F-9.  36 MRSA §2559, as amended by PL 2015, c. 300, Pt. A, §35, is further 
amended to read:
§2559.  Application of revenues
Revenues derived by the tax imposed by this chapter must be credited to a General 
Fund suspense account.  On or before the last day of each month, the State Controller shall 
transfer a percentage of the revenues received by the State Tax Assessor during the 
preceding month pursuant to the tax imposed by section 2552, subsection 1, paragraphs A 
to F and, L and N to the Local Government Fund as provided by Title 30‑A, section 5681, 
subsection 5.  The balance remaining in the General Fund suspense account must be 
transferred to service provider tax General Fund revenue.  On or before the 15th day of 
each month, the State Controller shall transfer all revenues received by the assessor during 
the preceding month pursuant to the tax imposed by section 2552, subsection 1, paragraphs 
G to J and M to the Medical Care Services Other Special Revenue Funds account, the Other 
Special Revenue Funds Mental Health Services - Community Medicaid program, the 
Medicaid Services - Adult Developmental Services program and the Office of Substance 
Abuse - Medicaid Seed program within the Department of Health and Human Services.
Sec. F-10.  Application. This Part applies to sales occurring on or after October 1, 
2021.
Sec. F-11.  Effective date. This Part takes effect 90 days following adjournment of 
the First Regular Session of the 130th Legislature.
Emergency clause.  In view of the emergency cited in the preamble, unless otherwise 
provided, this legislation takes effect when approved.
SUMMARY
Part A makes changes to the insurance premiums and income tax law. Part A:
1.  Changes the due dates for community colleges, colleges and universities, 
Department of Education and Department of Administrative and Financial Services, 
Bureau of Revenue Services, Office of Tax Policy reports on the implementation of the 
educational opportunity tax credit from February 1, 2021, for the colleges, and March 1, 
2021, for the Department of Education and Office of Tax Policy, to February 1, 2022;
2.  Repeals the requirement that remaining funds in the Medical Use of Marijuana Fund 
be used to fund the cost of the tax deductions provided pursuant to the Maine Revised 
Statutes, Title 36, section 5122, subsection 2, paragraph PP and Title 36, section 5200-A, 
subsection 2, paragraph BB and the cost of the position in the Department of Administrative 
and Financial Services, Bureau of Revenue Services to administer the tax deductions;
3.  Expands the so-called Maine insurance premiums retaliatory tax to include 
insurance companies incorporated in the District of Columbia or a possession of the United 
States;
4. Clarifies that the Maine reporting and tax payment requirements related to federal 
partnership adjustments under the new federal centralized partnership audit rules includes 
negative federal adjustments arising from Internal Revenue Service partnership audits and 
administrative adjustment requests filed with the Internal Revenue Service, and amends the 
requirements to allow a refund directly to the partnership in lieu of a refund to the affected 
partners to the extent that negative adjustments exceed positive adjustments;
5.  Clarifies that the Maine reporting and tax payment requirements related to federal 
partnership adjustments under the new federal partnership audit rules also apply to a 
partnership that has filed an administrative adjustment request with the federal Internal 
Revenue Service;
6.  Establishes a penalty for persons who fail to provide returns of information to the 
State Tax Assessor or who willfully furnish to the assessor a false or fraudulent return of 
information.  Generally, returns of information consist of Forms W-2, Forms 1099 and 
other similar forms containing tax information necessary for filing Maine tax returns.  
Similar to the penalty imposed for failure to provide information statements, or for willfully 
providing a false or fraudulent statement to payees, the penalty is $50 for each failure to 
provide a return of information to the State Tax Assessor.  The penalty applies to returns 
of information required to be filed on or after January 31, 2022;
7.  Makes the following changes to the renewable chemicals tax credits:
A.  Adds taxpayer information reporting and 3rd-party testing and verification credit 
requirements, to be specified by rules of the State Tax Assessor;
B.  Clarifies that the renewable chemicals may not be sold as food, feed or fuel and that 
they must be produced in Maine; and
C.  Modifies the February 1, 2024 report on the renewable chemicals tax credit issued 
by the Department of Economic and Community Development to remove required 
reporting on the number of indirect jobs created and to include reporting on the newly 
reinstated credit for biofuel commercial production and commercial use under Title 36, 
section 5219-X.
Part B makes changes to the sales tax law, applicable to sales occurring on or after 
January 1, 2022.  Part B:
1.  Clarifies that the Title 36, Part 3 definition of "in this State" includes sales of 
tangible personal property and taxable services sourced in this State pursuant to Title 36, 
section 1819;
2.  Repeals the presumptive sales and use tax registrations requirements for affiliate-
based and certain agent-based connections with the State;
3.  Corrects a conflict created when 2 different public laws enacted the same section of 
law and:
A.  Clarifies that the remote seller and marketplace registration requirements apply 
based on sales in this State and not the location from which they are delivered;
B.  Repeals the remote seller and marketplace facilitator sales and use tax registration 
requirement for persons or marketplace facilitators, respectively, with at least 200 
separate sales transactions in the State; and
C.  Clarifies the agent, representative, salesperson, solicitor or distributor registration 
requirements by removing the redundant term “storage”; and
4.  Expands the sales and use tax sourcing provision to apply to all sales and not just 
retail sales.
Part C makes changes to the property tax law.  Part C:
1.  Lowers the declared ratio accuracy threshold from within 20% to within 10% of the 
state valuation ratio last determined to align with the accuracy requirement provided for 
state reimbursement for the homestead exemption; and
2.  Updates and aligns the audit authority for exemptions that are reimbursed by the 
State to municipalities, allowing for the audit of all reimbursable exemptions.
Part D makes the following updates to respond to certain COVID-19 impacts and is 
effective when approved.  Part D:
1.  Aligns the Title 36 definitions of "disaster period" with the Title 10, section 9902 
definition;
2.  Relaxes the "work in Maine" requirement of the educational opportunity tax credit 
by deeming a qualified individual who worked in this State immediately prior to, or at any 
point during, the state of emergency declared by the Governor due to the COVID-19 
pandemic to have worked in this State for the entire state of emergency;
3.  Relaxes the primary use requirement of the sales tax exemption for machinery and 
equipment by determining the equipment's primary use based only on the days in use; and
4.  Allows taxpayers to use the sourcing law of another jurisdiction when calculating 
the credit for income tax paid to other jurisdictions in certain COVID-19 pandemic-related 
teleworking circumstances.
Part E clarifies and simplifies the corporate income tax law by establishing clearly 
defined, objective nexus thresholds as a practical structure for the current general 
"economic nexus" standard.  These so-called factor presence thresholds clarify the 
minimum thresholds that, when exceeded by a corporation, subject that corporation to the 
Maine corporate income tax.  In addition, the new thresholds create a safe harbor for 
corporations with little activity within the State that nonetheless have nexus under current 
law due to a small, but greater than de minimis, physical presence in the State.  The new 
thresholds are $250,000 of property, $250,000 in payroll or $500,000 in sales in Maine, or 
25% of total property, payroll or sales in Maine, as determined under Title 36, chapter 821.  
The thresholds apply to tax years beginning on or after January 1, 2022.
Part F updates, clarifies and simplifies the service provider tax law regarding consumer 
purchases of digital media by equalizing the tax treatment between the various modes of 
purchase for sales occurring on or after October 1, 2021.