Maine Legislature, Session 131, LD 2000
Committee Amendment CA_A_H947 (House)
Amends: 23 MRSA §4210-B, 36 MRSA §1752, 36 MRSA §1754-B, 36 MRSA §1758, 36 MRSA §1811, 36 MRSA §1819, 36 MRSA §2022

COMMITTEE AMENDMENT" ft"toH.P.1278,L.D.2000, "AnActtoChangethe 
Taxation of Rental Tangible Personal Property to Make It Consistent with the Predominant 
Method in Other States' Rental Industry Laws for Sales and Use Tax" 
Amend the bill by striking out everything after the enacting clause and inserting the 
following: 
'Sec. 1. 23 MRSA §4210-B, sub-§7-A, as amended by PL 2023, c. 360, Pt. C, § 1, 
is further amended to read: 
7-A. Sales tax revenue, On July 1st of each year, the State Controller shall transfer 
to the Multimodal Transportation Fund an amount, as certified by the State Tax Assessor, 
that is equivalent to 100% of the revenue from the tax imposed on the value of ren-tal of a 
truok or Yafl vii-th a gross v,•eight of less thafl 2G,OOO J3ounds rented fFom. a J3erson J3rim.arily 
engaged in the lmsiness of rentiag automobiles a.ad the value of rental for a period of less 
than one year of an automobile pursuant to Title 36, section 1811 for the first 6 months of 
the prior fiscal year after the reduction for the transfer to the Local Government Fund as 
described by Title 30-A, section 5681, subsection 5 and the transfer to the ATV 
Recreational Management Fund pursuant to Title 36, section 1820. On October 1st of each 
year, the State Controller shall transfer to the Multimodal Transportation Fund an amount, 
as certified by the State Tax Assessor, that is equivalent to 100% of the revenue from the 
tax imposed on the value of rental of a truck or 11a.a with a gross weight of less thafl 2G,OOO 
flOUB.ds rentea fFom. a J3erson J3rim.arily eB.gaged in the business ofrentiRg a-utomobiles ana 
the value ofrental for a period of less than one year of an automobile pursuant to Title 36, 
section 1811 for the last 6 months of the prior fiscal year after the reduction for the transfer 
to the Local Government Fund as described by Title 30-A, section 5681, subsection 5 and 
2 
the transfer to the ATV Recreational Management Fund pursuant to Title 3 6, section 1820. 
The tax amount must be based on actual sales for that fiscal year and may not consider any 
accruals that may be required by law. 
Sec. 2. 36 MRSA §1752, sub-§5-D is enacted to read: 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to H.P. 1278, L.D, 2000 
5-D. Lease or rental. "Lease or rental." "lease" or "rental" means any transfer of 
possession or control of tangible personal property for a fixed or indeterminate term for 
consideration and may include future options to purchase the property or extend the lease 
or rental. "Lease or rental" includes a sublease and subrental. 
"Lease or rental" does not include: 
A. Leases and contracts payable by rental or license fees for the right of possession 
and use when such leases and contracts are determined by the assessor to be in lieu of 
purchase; 
B. A transfer of possession or control of property under a security agreement or 
deferred payment plan thatrequires the transfer of title upon completion of the required 
payments; 
C. Providing tangible personal property along with a person to operate that property, 
for a fixed or indeterminate period of time. when that person is necessary for the 
tangible personal property to perform as designed and the person does more than 
maintain, inspect or set up the tangible personal property: or 
D. The lease or rental of property that is subject to the provisions of the service provider 
tax imposed pursuant to chapter 3 58. 
The characterization of a transaction as a lease or rental under generally accepted 
accounting principles. the Code, the Uniform Commercial Code or other provisions of 
federal. state or local law does not affect a determination that a transaction is a lease or 
rental under chapters 211 to 225. 
Sec. 3. 36 MRSA §1752, sub-§5-E is enacted to read: 
5-E. Lessor. "Lessor" means a person who leases or rents tangible personal property 
located in this State to another person. 
Sec. 4. 36 MRSA §1752, sub-§10, as amended by PL 2019, c. 401, Pt. B, §3, is 
further amended to read: 
10. Retailer, "Retailer" means a person who makes retail sales or who is required to 
register by section 1754-B or who is registered under section 1756. "Retailer" includes a 
lessor. 
Sec. 5. 36 MRSA §1752, sub-§11, ~, as amended by PL 2021, c. 578, §1, is 
further amended by repealing subparagraph (3). 
Sec. 6. 36 MRSA §1752, sub-§11, ~, as amended by PL 2021, c. 578, §1, is 
further amended by repealing subparagraph (3-A). 
Sec. 7. 36 MRSA §1752, sub-§11, ~' as amended by PL 2021, c. 578, §1, is 
further amended by repealing subparagraph (5). 
Sec. 8. 36 MRSA §1752, sub-§11, ~' as amended by PL 2021, c. 578, §1, is 
further amended by amending subparagraph (9) to read: 
(9) The sale of automobile repair parts used in the performance of repair services 
on an automobile pursuant to an extended service contract sold oa OF afteF 
SeptembeF 20, 2007 that entitles the purchaser to specific benefits in the service of 
the automobile for a specific duration; 
COMMITTEE AMENDMENT 
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RDS 
CO.f\1MITTEE AMENDMENT" f\" to H.P. 1278, L.D. 2000 
Sec. 9. 36 MRSA §1752, sub-§11, ~' as amended by PL 2021, c. 578, §1, is 
further amended by amending subparagraph (16) to read: 
(16) The sale, to a person engaged in the business of renting or leasing motor 
homes, as defined in Title 29-A, section 101, subsection 40, or camper trailers, of 
motor homes or camper trailers for rental as tangible personal property but not as 
the rental of living quarters; & 
Sec. 10. 36 MRSA §1752, sub-§11, ~, as amended by PL 2021, c. 578, §1, is 
further amended by amending subparagraph (17) to read: 
(17) The sale of truck repair parts used in the performance ofrepair services on a 
truck pursuant to an extended service contract that entitles the purchaser to specific 
benefits in the service of the truck for a specific duration.,;_m: 
Sec. 11. 36 MRSA §1752, sub-§11, ~ 
as amended by PL 2021, c. 578, §1, is 
further amended by enacting a new subparagraph (18) to read: 
(18) The sale or lease or rental to a lessor that has been issued a resale certificate 
pursuant to section 17 54-B, subsection 2-B or 2-C of tangible personal property 
for lease or rental. 
Sec. 12. 36 MRSA §1752, sub-§13, as amended by PL 1981, c. 706, §20, is further 
amended to read: 
13. Sale. "Sale" means any transfer, exchange or barter, in any manner or by any 
means whatsoever, for a consideration and includes leases and eol.rtraets payaele by refltal 
or HeeHse fees fur the right of possession ana use, but only ,vhen saeh rentals, conditional 
sale contracts and any contract under which possession of the property is given to the 
purchaser but title is retained by the seller as security for the payment of the purchase price, 
and leases and contracts that are aeemea determined by the State Ta1c Assessor assessor to 
be in lieu of purchase. Each time period for which a lease or rental payment is charged is 
considered a separate sale. 
Sec. 13. 36 MRSA §1752, sub-§14, 1A, as amended by PL 2021, c. 578, §2, is 
further amended by amending subparagraph (4) to read: 
( 4) In the case of the lease or rental for a period of less than one year of an 
automobile or of a traek or van •.vith a gross v:ehiele weight of less than 26,000 
poanas rented from a person primarily eegagea in the busmess of reflting 
automobiles, the value is the total rental charged to the lessee and includes, but is 
not limited to, maintenance and service contracts, drop-off or pick-up fees, airport 
surcharges, mileage fees and any separately itemized charges on the rental 
agreement to recover the owner's estimated costs of the charges imposed by 
government authority for title fees, inspection fees, local excise tax and agent fees 
on all vehicles in its rental fleet registered in the State. All fees must be disclosed 
when an estimated quote is provided to the lessee; and 
Sec. 14. 36 MRSA §1752, sub-§14, ~, as repealed and replaced by PL 2019, c. 
501, §28, is amended by amending subparagraph (2) to read: 
(2) Allowances in cash or by credit made upon the return of merchandise or 
services rejected pursuant to warranty; 
COMMITTEE AMENDMENT 
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COMMITTEE ~NDMENT" ~" to H.P. 1278, L.D. 2000 
Sec. 15. 36 MRSA §1752, sub-§14, ~' as repealed and replaced by PL 2019, c. 
501, §28, is amended by amending subparagraph (3) to read: 
(3) The price of property returned or services rejected by customers, when the full 
price is refunded either in cash or by credit; 
Sec. 16. 36 MRSA §1752, sub-§14, ~, as repealed and replaced by PL 2019, c. 
501, §28, is amended by amending subparagraph (12) to read: 
(12) Federal universal service support funds that are paid directly to the seller 
pursuant to 47 Code of Federal Regulations, Part 54; 0f 
Sec. 17. 36 MRSA §1752, sub-§14, ~, as repealed and replaced by PL 2019, c. 
501, §28, is amended by amending subparagraph (13) to read: 
(13) A paint stewardship assessment imposed pursuant to Title 38, section 2144;:;, 
ill: 
Sec. 18. 36 MRSA §1752, sub-§14, ~ 
as repealed and replaced by PL 2019, c. 
501, §28, is amended by enacting a new subparagraph (14) to read: 
04) For lease or rental payments, separately stated charges for sales of optional 
insurance coverage for the protection of the lessee or of the lessee's personal 
property, such as liability insurance, personal accident insurance or personal 
effects protection. 
Sec. 19. 36 MRSA §1752, sub-§17-B, as amended by PL 2021, c. 578, §3, is 
further amended to read: 
17-B. Taxable service. "Taxable service" means the rental of living quarters in a 
hotel, rooming house or tourist or trailer camp; the transmission and distribution of 
electricity; the rental or lease of ffil l.¼l¼tomoeile, a eamper trailer, or a motor home, as 
defined in Title 29 f,., seetion 101, sltbseetion 40; the rental or lease of a truek or •;an v1ith 
a gross vehiele weight of less thaii 26,000 pounds from a person primarily engaged in the 
business of renting a:a-tomoeiles; the sale of an extended service contract on an automobile 
or truck that entitles the purchaser to specific benefits in the service of the automobile or 
truck for a specific duration; and the sale of prepaid calling service. 
Sec. 20. 36 MRSA §1754-B, sub-§1-B, ,rA, as repealed and replaced by PL 2021, 
c. 181, Pt. B, §5, is amended by amending subparagraph (3) to read: 
(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 parehasers from in this State; 
Sec. 21. 36 MRSA §1758, as repealed and replaced by PL 1999, c. 708, §24, is 
repealed. 
Sec. 22. 36 MRSA §1811, sub-§1, ~' as amended by PL 2021, c. 578, §4; c. 658, 
§286; and c. 669, §5, is further amended by amending subparagraph (4) to read: 
( 4) Ten percent on the value of rental for a period of less than one year of: 
(a) An automobile; or 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A "to H.P. 1278, L.D. 2000 . 
(b) A truek or ¥aft 1;,,rith a gross Yehiele weight of less tha-a 26,000 poaads 
reated from a persoa primarily eagaged ia the basiaess of reatiag aatomobiles; 
0i' 
( 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 
Sec. 23. 36 MRSA §1819, sub-§2, as amended by PL 2021, c. 181, Pt. B, §6, is 
further amended to read: 
2. Sourcing for sales of tangible personal property and taxable services; generally. 
The sale of tangible personal property or a taxable service is sourced in this State pursuant 
to this subsection. Except as provided in subsections 3 to 5. the provisions of this 
subsection do not apply to the lease or rental of tangible personal property. 
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. 24. 36 MRSA §1819, sub-§3 is enacted to read: 
3. Sourcing for leases or rentals of tangible personal property. The lease or rental 
of tangible personal property. other than property identified in subsection 4 or 5. is sourced 
pursuant to this subsection, 
A. For a lease or rental that requires recurring periodic payments. the first periodic 
payment is sourced to this State in the same manner as a sale of tangible personal 
property in accordance with subsection 2. Periodic payments made subsequent to the 
first payment are sourced to the primary property location for each time period covered 
by the payment. For the purposes of this paragraph. "the primary property location" is 
an address for the property provided by the lessee that is available to the lessor from 
its records and maintained in the ordinary course of business. when use of this address 
COMMITTEE AMENDMENT 
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S. 
" ... 
COMMITTEE AMENDMENT" Pr" to H.P. 1278, L.D. 2000 
does not constitute bad faith. 
The primacy property location is not altered by 
intermittent use at different locations. such as use of business property that 
accompanies employees on business trips and service calls. 
B. For a lease or rental that does not require recurring periodic payments. the payment 
is sourced to this State in the same manner as a sale of tangible personal property in 
accordance with subsection 2. 
This subsection does not affect the imposition or computation of sales or use tax on leases 
or rentals. based on a lump sum payment or on the basis of accelerated payment, or on the 
acquisition of property for lease. 
Sec. 25. 36 MRSA §1819, sub-§4 is enacted to read: 
4. Motor vehicles, trailers, semitrailers, truck campers or aircraft. The lease or 
rental of motor vehicles. trailers. semitrailers. truck campers or aircraft that do not qualify 
as transportation equipment. as defined in subsection 5, is sourced pursuant to this 
subsection. 
A. For a lease or rental that requires recurring periodic payments. each periodic 
payment is sourced to the primacy property location. The primary property location is 
as indicated by an address for the property provided by the lessee that is available to 
the lessor from its records maintained in the ordinary course of business. when use of 
• this address does not constitute bad faith. This location is not altered by intermittent 
use at different locations. 
B. For a lease or rental that does not require recurring periodic payments. the payment 
is sourced to the State in the same manner as a sale of tangible personal property in 
accordance with the provisions of subsection 2. 
This subsection does not affect the imposition or computation of sales or use tax on leases 
or rentals. based on a lump sum payment or on the basis of accelerated payment. or on the 
acquisition of property for lease. 
Sec. 26. 36 MRSA §1819, sub-§5 is enacted to read: 
5. Transportation equipment. The sale, including lease or rental, of transportation 
equipment is sourced to the State in the same manner as a sale of tangible personal property 
in accordance with the provisions of subsection 2. For the purposes of this subsection. 
11transportation eguipment
means: 
A. Locomotives and railcars that are used for the carriage of persons or property in 
interstate commerce; 
B. Trucks and truck tractors with a gross vehicle weight rating greater than 10.000 
pounds and trailers. semitrailers or passenger buses that are: 
(1) Registered through the International Registration Plan; and 
(2) Operated under authority of a carrier authorized and certificated by the United 
States Department of Transportation or another federal authority to engage in the 
carriage of persons or property in interstate commerce; 
C. Aircraft that are operated by air carriers authorized and certificated by the United 
States Department of Transportation. another federal authority or a foreign authority to 
engage in the carriage of persons or property in interstate or foreign commerce; or 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" ft'' to H.P. 1278, L.D. 2000 
D. Containers designed for use on and component parts attached to or secured on the 
equipment described in paragraphs A to C. 
Sec. 27. 36 MRSA §2022 is enacted to read: 
§2022. Refund of sales and use tax on purchases of qualifying retail lease or rental 
property 
1. Definitions. For pm:poses of this section. unless the context otherwise indicates. 
the following terms have the following meanings. 
A. "Qualified lessor" means a person who: 
(1) Paid Maine sales or use tax on the purchase of qualifying lease or rental 
property on or after January 1, 2023 and before January 1, 2025: and 
(2) Collected and remitted Maine sales or use tax on the lease or rental of 
qualifying lease or rental property on or after January 1, 2025. 
B. "Qualifying lease or rental property" means tangible personal property: 
(1) Upon the purchase of which a qualified lessor paid Maine sales or use tax on 
or after January 1, 2023 and before January 1, 2025: and 
(2) That was part of a taxable lease or rental transaction on or after January 1, 2025 
for which the qualified lessor of the property collected and remitted Maine sales or 
use tax to the State, 
2. Refund authorized. The State Tax Assessor shall refund the tax imposed pursuant 
to this Part and paid by a qualified lessor on the purchase of qualifying lease or rental 
property on or after January 1, 2023 and before January 1. 2025. The amount of the refund 
for qualifying lease or rental property is limited to the Maine sales or use tax collected and 
remitted to the State by the qualified lessor on qualifying lease or rental property on or after 
January 1. 2025 and before January 1. 2027. 
3. Procedure and limitation. A qualified lessor may request a refund on qualifying 
lease or rental property by submitting a claim for refund on a form prescribed by the 
assessor. In order to qualify for a refund under this section. a qualified lessor must file one 
claim for all qualifying lease or rental property and must file the claim on or after January 
1. 2027 and before March 31. 2027. 
4. Audit. The assessor may audit a claim for refund filed under this section. If the 
assessor determines that the amount of refund is incorrect. the assessor may issue an 
assessment within 3 years from the date the claim was filed or at any time if a fraudulent 
claim was filed. The claimant may seek reconsideration of the assessment pursuant to 
section 151. 
Sec. 28. Application. This Act applies to sales, leases and rentals of tangible 
personal property and sales of taxable services on or after January 1, 2025. For the purposes 
of lease or rental payments, each time period for which a lease or rental payment is charged 
is considered a separate sale.' 
Amend the bill by relettering or renumbering any nonconsecutive Part letter or section 
number to read consecutively. 
COMMITTEE AMENDMENT 
ROS 1 
COMMITTEE AMENDMENT"/>(' to H.P. 1278, L.D. 2000 
SUMMARY 
This amendment replaces the bill and is the majority report of the committee. The 
amendment changes the approach to the taxation of rental property from imposing sales 
and use tax on the lessor upfront on the purchase price of the rental property to instead 
imposing tax on lease or rental payments going forward, also known as the lease stream. 
Under lease stream taxation, the lessor is required to collect and remit sales or use tax from 
the lessee on each rental payment. The amendment provides a limited time period in which 
a lessor who has paid sales or use tax on the purchase of rental property that is now subject 
to lease stream taxation may claim a refund. The changes apply to sales, leases and rentals 
on or after January 1, 2025. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 03/27/24 ;1.Ya<:-
LD 2000 
LR 1653(02) 
: ,An Ad to Change the Taxation of Rental Tangible Personal Property to Make It Consistent with the 
Predominant Method in Other States' Rental Industry Laws for Sales and Use Tax 
Net .co~t (Savings~ 
Genei-at. Fund 
Reve.nue 
General Fund 
Fiscal Note for Bill as Amended by Committee Amendment '/t1 { rf-CjL[1_) 
Committee: Taxation 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2023-24 
$0 
FY 2024-25 
Projections 
FY 2025-26 
Projections 
FY 2026-27 
($4,494,000) 
($11,808,000) 
($4,060,000) 
Other Special Revenue Funds 
$0 
$0 
$4,494,000 
$195,000 
$11,808,000 
$174,000 
$4,060,000 
($222,000) 
Fiscal Detail and Notes 
This bill changes the approach to taxation of rental property from imposing a sales and use tax on the purchase price 
of rental property to instead imposing sales and use tax on rental payments, also known as the lease stream taxation, 
effective January 1, 2025. This will increase sales tax revenue in the second half of fiscal year 2024-25 resulting in a 
General Fund revenue increase of $4,494,000 and a Local Government Fund revenue increase of$195,000 in that 
year. 
Beginning in fiscal year 2025-26, the impact on Other Special Revenue Funds is the net result of increases in Local 
Govemment Fund revenue and offsetting decreases in Multimodal Transportation Fund revenue due to the removal 
of certain vehicles from the 10% tax rate. In fiscal year 2026-27, the General Fund revenue increase drops 
temporarily due to a refund that is available on a time limited basis for sales tax paid on rental property purchases 
prior to January L 2025. 
LR1653(02) - Fiscal Note - Page 1 of 1