An Act to Exempt Certain Nonprofit Organizations from the Sales and Use Tax and the Service Provider Tax
Maine Legislature, Session 131, LD 0068
Committee: Taxation
Sponsors: SACHS, PIERCE, DHALAC, HEPLER, KUHN, MATLACK, TERRY
Amends: 36 MRSA §1760, 36 MRSA §2557

Legislative Document
No. 68
H.P. 43
House of Representatives, January 4, 2023
An Act to Exempt Certain Nonprofit Organizations from the Sales 
and Use Tax and the Service Provider Tax
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative SACHS of Freeport.
Cosponsored by Senator PIERCE of Cumberland and
Representatives: DHALAC of South Portland, HEPLER of Woolwich, KUHN of Falmouth, 
MATLACK of St. George, TERRY of Gorham.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §1760, sub-§115 is enacted to read:
115.  Section 501(c)(3) nonprofit organizations.  Beginning January 1, 2024, sales to 
a nonprofit organization that has been determined by the United States Internal Revenue 
Service to be exempt from federal income taxation under Section 501(c)(3) of the Code, if 
the tangible personal property or taxable services sold are to be used primarily for the 
purposes for which the nonprofit organization was organized.
Sec. 2.  36 MRSA §2557, sub-§40 is enacted to read:
40.  Section 501(c)(3) nonprofit organizations.  Beginning January 1, 2024, sales to 
a nonprofit organization that has been determined by the United States Internal Revenue 
Service to be exempt from federal income taxation under Section 50l(c)(3) of the Code, if 
the services sold are to be used primarily for the purposes for which the nonprofit 
organization was organized.
Sec. 3.  Study; additional legislation.  The Department of Administrative and 
Financial Services, Bureau of Revenue Services, Office of Tax Policy shall study the entity-
based exemptions provided to qualifying nonprofit organizations from sales and use tax 
pursuant to the Maine Revised Statutes, Title 36, section 1760 and from service provider 
tax pursuant to Title 36, section 2557. The department shall submit a report including 
suggested legislation repealing or otherwise modifying any of those exemptions that are 
found to be duplicative or unnecessary to the Joint Standing Committee on Taxation no 
later than December 6, 2023.  The joint standing committee may report out a bill to the 
Title 36, section 191, the Office of Tax Policy may disclose the number of nonprofit 
organizations not exempt under Section 501(c)(3) of the federal Internal Revenue Code of 
1986 that have active exemption certificates under each sales or service provider tax 
exemption.
SUMMARY
This bill exempts from the sales and use tax and from the service provider tax sales to 
a nonprofit organization that has been determined by the United States Internal Revenue 
Service to be exempt from income taxation under Section 501(c)(3) of the federal Internal 
Revenue Code of 1986 if the property or services sold are to be used primarily for the 
purposes for which the nonprofit organization was organized.  The bill requires the 
Department of Administrative and Financial Services, Bureau of Revenue Services, Office 
of Tax Policy to review sales and use tax and service provider tax exemptions to identify 
provisions that should be repealed or amended because they are duplicative or otherwise 
unnecessary and to submit a report including suggested legislation repealing or modifying 
those exemptions to the Joint Standing Committee on Taxation.