An Act to Amend the Income Tax Law to Expand the Middle Tax Bracket, Increase the Lodging Tax and Increase the Short-term Automobile Rental Tax
Maine Legislature, Session 131, LD 1946
Committee: Taxation
Sponsors: MOONEN
Amends: 36 MRSA §1752, 36 MRSA §1811, 36 MRSA §5111, 36 MRSA §5403

Legislative Document
No. 1946
H.P. 1250
House of Representatives, May 16, 2023
An Act to Amend the Income Tax Law to Expand the Middle Tax 
Bracket, Increase the Lodging Tax and Increase the Short-term 
Automobile Rental Tax
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative MOONEN of Portland.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §1752, sub-§11, ¶B, as amended by PL 2021, c. 578, §1, is 
further amended by repealing subparagraph (3).
Sec. 2.  36 MRSA §1811, sub-§1, ¶D, as amended by PL 2021, c. 578, §4; c. 658, 
§286; and c. 669, §5, is further amended to read:
D.  For sales occurring on or after October 1, 2019 and before October 1, 2023, the rate 
of tax is 5.5% on the value of all tangible personal property and taxable services, except 
the rate of tax is:
(1)  Eight percent on the value of prepared food;
(2)  Eight percent on the value of liquor sold in licensed establishments as defined 
in Title 28‑A, section 2, subsection 15, in accordance with Title 28‑A, chapter 43 
and liquor sold for on-premises consumption by a licensed brewery, small brewery, 
winery, small winery, distillery or small distillery pursuant to Title 28‑A, section 
1355‑A, subsection 2, paragraph B;
(3)  Nine percent on the value of rental of living quarters in any hotel, rooming 
house or tourist or trailer camp;
(4)  Ten percent on the value of rental for a period of less than one year of:
(a)  An automobile;
(b)  A truck or van with a gross vehicle weight of less than 26,000 pounds 
rented from a person primarily engaged in the business of renting automobiles; 
or
(c)  A loaner vehicle that is provided other than to a motor vehicle dealer's 
service customers pursuant to a manufacturer's or dealer's warranty; and
(5)  Ten percent on the value of adult use cannabis, adult use cannabis products 
and, if sold by a person to an individual who is not a qualifying patient, cannabis 
and cannabis products beginning on the first day of the calendar month in which 
adult use cannabis and adult use cannabis products may be sold in the State by a 
cannabis establishment licensed to conduct retail sales pursuant to Title 28‑B, 
chapter 1.
Sec. 3.  36 MRSA §1811, sub-§1, ¶E is enacted to read:
E.  For sales occurring on or after October 1, 2023, the rate of tax is 5.5% on the value 
of all tangible personal property and taxable services, except the rate of tax is:
(1) Eight percent on the value of prepared food;
(2) Eight percent on the value of liquor sold in licensed establishments as defined 
in Title 28‑A, section 2, subsection 15, in accordance with Title 28‑A, chapter 43 
and liquor sold for on-premises consumption by a licensed brewery, small brewery, 
winery, small winery, distillery or small distillery pursuant to Title 28‑A, section 
1355‑A, subsection 2, paragraph B;
(3) Eleven percent on the value of rental of living quarters in any hotel, rooming 
house or tourist or trailer camp;
(4) Fifteen percent on the value of rental for a period of less than one year of:
(a) An automobile;
(b) A truck or van with a gross vehicle weight of less than 26,000 pounds 
rented from a person primarily engaged in the business of renting automobiles; 
or
(c) A loaner vehicle that is provided other than to a motor vehicle dealer's 
service customers pursuant to a manufacturer's or dealer's warranty; and
(5) Ten percent on the value of adult use cannabis, adult use cannabis products and, 
if sold by a person to an individual who is not a qualifying patient, cannabis and 
cannabis products beginning on the first day of the calendar month in which adult 
use cannabis and adult use cannabis products may be sold in the State by a cannabis 
establishment licensed to conduct retail sales pursuant to Title 28‑B, chapter 1.
Sec. 4.  36 MRSA §5111, sub-§1-F, as enacted by PL 2015, c. 267, Pt. DD, §3, is 
amended to read:
1-F.  Single individuals and married persons filing separate returns; tax years 
beginning from 2017 to 2022.  For tax years beginning on or after January 1, 2017 but 
before January 1, 2023, for single individuals and married persons filing separate returns:
If Maine taxable income is:
The tax is:
Less than $21,050
5.8% of the Maine taxable income
At least $21,050 but less than $50,000
$1,221 plus 6.75% of the excess over 
$21,050
$50,000 or more
$3,175 plus 7.15% of the excess over 
$50,000
Sec. 5.  36 MRSA §5111, sub-§1-G is enacted to read:
1-G.  Single individuals and married persons filing separate returns; tax years 
beginning 2023.  For tax years beginning on or after January 1, 2023, for single individuals 
and married persons filing separate returns:
If Maine taxable income is: 
The tax is: 
Less than $23,000 
5.8% of the Maine taxable income 
At least $23,000 but less than $64,450 
$1,334 plus 6.75% of the excess over 
$23,000 
$64,450 or more 
$4,132 plus 7.15% of the excess over 
$64,450 
Sec. 6.  36 MRSA §5111, sub-§2-F, as enacted by PL 2015, c. 267, Pt. DD, §5, is 
amended to read:
2-F.  Heads of households; tax years beginning from 2017 to 2022.  For tax years 
beginning on or after January 1, 2017 but before January 1, 2023, for unmarried individuals 
or legally separated individuals who qualify as heads of households:
If Maine taxable income is:
The tax is:
Less than $31,550
5.8% of the Maine taxable income
At least $31,550 but less than $75,000
$1,830 plus 6.75% of the excess over 
$31,550
$75,000 or more
$4,763 plus 7.15% of the excess over 
$75,000
Sec. 7.  36 MRSA §5111, sub-§2-G is enacted to read:
2-G.  Heads of households; tax years beginning 2023.  For tax years beginning on or 
after January 1, 2023, for unmarried individuals or legally separated individuals who 
qualify as heads of households:
If Maine taxable income is: 
The tax is: 
Less than $34,500 
5.8% of the Maine taxable income 
At least $34,500 but less than $96,700 
$2,001 plus 6.75% of the excess over 
$34,500 
$96,700 or more 
$6,200 plus 7.15% of the excess over 
$96,700 
Sec. 8.  36 MRSA §5111, sub-§3-F, as enacted by PL 2015, c. 267, Pt. DD, §7, is 
amended to read:
3-F.  Individuals filing married joint returns or surviving spouses; tax years 
beginning from 2017 to 2022.  For tax years beginning on or after January 1, 2017 but 
before January 1, 2023, for individuals filing married joint returns or surviving spouses 
permitted to file a joint return:
If Maine taxable income is:
The tax is:
Less than $42,100
5.8% of the Maine taxable income
At least $42,100 but less than $100,000
$2,442 plus 6.75% of the excess over 
$42,100
$100,000 or more
$6,350 plus 7.15% of the excess over 
$100,000
Sec. 9.  36 MRSA §5111, sub-§3-G is enacted to read:
3-G.  Individuals filing married joint returns or surviving spouses; tax years 
beginning 2023.  For tax years beginning on or after January 1, 2023, for individuals filing 
married joint returns or surviving spouses permitted to file a joint return:
If Maine taxable income is: 
The tax is: 
Less than $46,000 
5.8% of the Maine taxable income 
At least $46,000 but less than $148,900 
$2,668 plus 6.75% of the excess over 
$46,000 
$128,900 or more 
$8,264 plus 7.15% of the excess over 
$128,900 
Sec. 10.  36 MRSA §5403, sub-§1, ¶A, as enacted by PL 2015, c. 267, Pt. DD, 
§33, is amended to read:
A.  Beginning in 2016 and each year thereafter, by the lowest dollar amounts of the tax 
rate tables specified in section 5111, subsections 1‑F 1-G, 2‑F 2-G and 3‑F 3-G, except 
that for the purposes of this paragraph, notwithstanding section 5402, subsection 1‑B, 
the "cost-of-living adjustment" is the Chained Consumer Price Index for the 12-month 
period ending June 30th of the preceding calendar year divided by the Chained 
Consumer Price Index for the 12-month period ending June 30, 2015; and
Sec. 11.  Application. That section of this Act that amends the Maine Revised 
Statutes, Title 36, section 5403, subsection 1, paragraph A applies to tax years beginning 
on or after January 1, 2024.
SUMMARY
This bill:
1.  Removes the sales tax exemption for automobiles and parts or accessories related 
to automobiles purchased by a person engaged in the business of renting automobiles for 
rental of those automobiles for a period of less than one year; 
2.  Increases the rate of the sales tax imposed on lodging from 9% to 11%, effective 
October 1, 2023;
3.  Increases the rate of sales tax imposed on the short-term rental of automobiles from 
10% to 15%, effective October 1, 2023; and
4.  Increases the size of the middle individual income tax bracket, which has the effect 
of increasing the amount of income that may be earned before the top income tax rate 
applies.