An Act to Allow a Municipality to Impose a Fee on Short-term Rentals for the Benefit of That Municipality
Maine Legislature, Session 131, LD 1893
Committee: Taxation
Sponsors: STROUT, COLLAMORE, GUERRETTE, RUDNICKI

Legislative Document
No. 1893
H.P. 1214
House of Representatives, May 4, 2023
An Act to Allow a Municipality to Impose a Fee on Short-term 
Rentals for the Benefit of That Municipality
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative STROUT of Harrington.
Cosponsored by Representatives: COLLAMORE of Pittsfield, GUERRETTE of Caribou, 
RUDNICKI of Fairfield.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  30-A MRSA c. 215 is enacted to read:
CHAPTER 215
LOCAL OPTION FEE ON SHORT-TERM RENTALS
§5451.  Municipal local option fee on short-term rentals
1.  Definitions.  As used in this chapter, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Local option fee" means a fee imposed pursuant to subsection 2.
B.  "Participating municipality" means a municipality that has imposed a local option 
fee pursuant to this section.
C.  "Short-term rental" means living quarters in any hotel, rooming house or tourist or 
trailer camp subject to the tax imposed pursuant to Title 36, section 1811, including a 
short-term accommodation rental rented through a transient rental platform as defined 
in Title 36, section 1752, subsection 20-C.
2.  Authorization to impose local option fee.  A municipality may impose a local 
option fee by referendum conducted pursuant to subsection 8, in an amount specified in the 
referendum, on the value of rental of a short-term rental.
3.  Local option fee limited to short-term rentals.  A municipality may not impose a 
local option fee on the rental of living quarters of any hotel, rooming house or tourist or 
trailer camp exempt from sales and use tax pursuant to Title 36, section 1760, subsection 
20.
4.  Notify State Tax Assessor.  A participating municipality shall notify the State Tax 
Assessor at least 90 days before the local option fee is effective.
5.  Administration.  A retailer, as defined in Title 36, section 1752, subsection 10, or 
a room remarketer, as defined in Title 36, section 1752, subsection 11-B, in a participating 
municipality shall transfer the revenue from a local option fee at the time and in the manner 
provided in Title 36, section 1951-A for the transfer of state sales tax revenue. The local 
option fee is subject to the same enforcement provisions, interest, penalties and 
administrative actions as taxes assessed under Title 36, Part 3.
6.  Distribution of revenue from fee.  Quarterly, the State Tax Assessor shall identify 
the amount of revenue attributable to each participating municipality under this section and 
certify the amount for that municipality to the Treasurer of State for distribution pursuant 
to this subsection.  From the amount certified for a municipality under this subsection, the 
Treasurer of State shall make monthly payments to the participating municipality.
For the purposes of this subsection, the unorganized territory must receive reimbursement 
as if it is one municipality.
7.  Effect on revenue sharing and other state aid programs.  Revenue received 
pursuant to subsection 6 may not be considered to be receipts from the taxes imposed under 
Title 36, Part 3 for the purpose of transfers to the Local Government Fund under section 
5681. Revenue received pursuant to subsection 6 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 fee on short-term 
rentals must be submitted to the legal voters of a municipality that seeks to impose the local 
option fee.  The referendum question must indicate the rate of the local option fee.
The petition process and voting must be held and conducted in accordance with sections 
2528, 2529 and 2532 even if the municipality has not accepted the provisions of 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 State Tax 
Assessor.
The local option fee for short-term rentals may be discontinued by referendum conducted 
in the same manner as the referendum adopting the local option fee for short-term rentals 
under this subsection.
9.  Effective date of fee for short-term rentals; acceptance by voters.  A local option 
fee authorized by this section takes effect 120 days after the municipal referendum vote 
under subsection 8 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 a local option fee 
for short-term rentals may not take effect before July 1, 2024.
SUMMARY
This bill allows a municipality to impose, if approved by referendum of the voters in 
that municipality, a local option fee on short-term rentals of living quarters in any hotel, 
rooming house or tourist or trailer camp currently subject to the 9% sales tax on lodging, 
including a short-term accommodation rental rented through a transient rental platform. 
Long-term rentals currently exempt from sales tax are not subject to the short-term rental 
fee.  The revenue from the local option fee is distributed to the municipality imposing the 
local option fee.
Revenue received by a municipality from a local option fee imposed on short-term 
rentals may not be used to reduce or eliminate funding otherwise due to the municipality 
under other provisions of law.  The local option fee may not take effect before July 1, 2024.