An Act to Amend the State Tax Laws
Maine Legislature, Session 132, LD 0068
Sponsors: CLOUTIER
Amends: 33 MRSA §203, 36 MRSA §693, 36 MRSA §1760, 36 MRSA §1764, 5 MRSA §13080-Q, 36 MRSA §5122, 36 MRSA §5195, 36 MRSA §5196, 36 MRSA §6753

Legislative Document
No. 68
H.P. 32
House of Representatives, January 8, 2025
An Act to Amend the State Tax Laws
Submitted by the Department of Administrative and Financial Services pursuant to Joint 
Rule 204.
Received by the Clerk of the House on January 6, 2025.  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 CLOUTIER of Lewiston.
Be it enacted by the People of the State of Maine as follows:
PART A
Sec. A-1.  33 MRSA §203, first ¶, as amended by PL 2019, c. 607, Pt. A, §3, is 
further amended to read:
Deeds and all other written instruments before recording in the registries of deeds, 
except those issued by a court of competent jurisdiction and duly attested by the proper 
officer thereof, and excepting plans and notices of foreclosure of mortgages and certain 
financing statements as provided in Title 11, section 9‑1501, subsection (1), paragraph (a), 
and excepting notices of liens for internal revenue taxes and certificates discharging such 
liens and excepting notices of liens for the collection of taxes assessed pursuant to Title 36, 
Part 1 and Parts 3 to 8 and Title 26, chapter 13, and releases discharging such liens, and 
excepting notices of liens for the collection of taxes assessed pursuant to Title 36, Part 2 
and Part 9 when filed by the State Tax Assessor, and releases discharging such liens, must 
be acknowledged by the grantors, or by the persons executing any such written instruments, 
or by one of them, or by their attorney executing the same, or by the lessor in a lease or one 
of the lessors or lessor's attorney executing the same, before a notary public in the State, or 
before an attorney-at-law duly admitted and eligible to practice in the courts of the State, 
if within the State; or before any clerk of a court of record having a seal, notary public or 
commissioner appointed by the Governor of this State for the purpose, or a commissioner 
authorized in the state where the acknowledgment is taken, within the United States; or 
before a minister, vice-consul or consul of the United States or notary public in any foreign 
country.
Sec. A-2.  36 MRSA §693, sub-§1, as amended by PL 2017, c. 170, Pt. B, §8, is 
further amended to read:
1.  Reporting.  On or before April May 1st of each year, a taxpayer claiming an 
exemption under this subchapter shall file a report with the assessor of the taxing 
jurisdiction in which the property would otherwise be subject to taxation on April 1st of 
that year.  The report must identify the property for which exemption is claimed that would 
otherwise be subject to taxation on April 1st of that year and must be made on a form 
prescribed by the State Tax Assessor or substitute form approved by the State Tax Assessor.  
The State Tax Assessor shall furnish copies of access to the form to each municipality in 
the State and the form must be made available to taxpayers prior to April 1st annually. The 
assessor of the taxing jurisdiction may require the taxpayer to sign the form and make oath 
to its truth.  If the report is not filed by April 1st, the filing deadline is automatically 
extended to May 1st without the need for the taxpayer to request or the assessor to grant 
that extension.  Upon written request, before the commitment of taxes, the assessor may 
grant further extensions, for good cause, an extension of time not to exceed 3 months to 
file the report.  If a taxpayer fails to file the report in a timely manner, including any 
extensions extension of time, the taxpayer may not obtain an exemption for that property 
under this subchapter for that tax year.  The assessor of the taxing jurisdiction may require 
in writing that a taxpayer answer in writing all reasonable inquiries as to the property for 
which exemption is requested.  A taxpayer has 30 days from receipt of such an inquiry to 
respond.  Upon written request, a taxpayer is entitled to a 30-day extension to respond to 
the inquiry and the assessor may at any time grant additional extensions to respond to the 
inquiry upon written request. The answer to any such inquiry is not binding on the assessor.
All notices and requests provided pursuant to this subsection must be made by personal 
delivery or certified mail and must conspicuously state the consequences of the taxpayer's 
failure to respond to the notice or request in a timely manner.
If an exemption has already been accepted and the State Tax Assessor subsequently 
determines that the property is not entitled to exemption, a supplemental assessment must 
be made within 3 years of the original assessment date with respect to the property in 
compliance with section 713, without regard to the limitations contained in that section 
regarding the justification necessary for a supplemental assessment.
PART B
Sec. B-1.  36 MRSA §1760, sub-§25, as amended by PL 2015, c. 300, Pt. A, §18, 
is further amended to read:
25.  Watercraft purchased by nonresidents.  Sales to or use by a person that is not a 
resident of this State of watercraft or materials used in watercraft as specified in this 
subsection. This subsection does not apply to the lease or rental of a watercraft to a person 
that is not a resident of this State.
A.  The following are exempt when the sale is made in this State to a person that is not 
a resident of this State and the watercraft is sailed or transported outside the State within 
days of delivery by the seller:
(1)  A watercraft;
(2)  Sales, under contract for the construction of a watercraft, of materials to be 
incorporated in that watercraft; and
(3)  Sales of materials to be incorporated in the watercraft for the repair, alteration, 
refitting, reconstruction, overhaul or restoration of that watercraft.
B.  The purchase of a watercraft outside this State is exempt if the watercraft is 
registered outside the State by the purchaser and used outside the State by the purchaser 
and the watercraft is present in the State not more than 30 days, not including any time 
spent in this State for temporary storage, during the 12 months following its purchase. 
For purposes of this paragraph, "used outside the State" does not include storage but 
means actual use of the watercraft for a purpose consistent with its design.
C.  If, for a purpose other than temporary storage, a watercraft is present in this State 
for more than 30 days during the 12-month period following its date of purchase, the 
exemption applies only to 60% of the sale price of the watercraft or materials for the 
construction, repair, alteration, refitting, reconstruction, overhaul or restoration of the 
watercraft, as specified in paragraph A.
Sec. B-2.  36 MRSA §1760, sub-§113, ¶B, as enacted by PL 2021, c. 681, Pt. D, 
§2, is amended to read:
B.  "Sales sourced to tribal land" means sales sourced pursuant to section 1819 to a 
location on tribal land.  In addition, sales of motor vehicles other than those that are 
being leased for a period of less than one year to a tribal member are sales sourced to 
tribal land if the vehicle is intended to be driven or transported to tribal land 
immediately upon receipt of the vehicle.
Sec. B-3.  36 MRSA §1760, sub-§114, ¶B, as enacted by PL 2021, c. 681, Pt. D, 
§3, is amended to read:
B.  "Sales sourced to tribal land" means sales sourced pursuant to section 1819 to a 
location on tribal land. In addition, sales of motor vehicles other than those that are 
being leased for a period of less than one year to a tribal entity are sales sourced to 
tribal land if the vehicle is intended to be driven or transported to tribal land 
immediately upon receipt of the vehicle.
Sec. B-4.  36 MRSA §1764, as amended by PL 2015, c. 300, Pt. A, §24, is further 
amended to read:
§1764.  Tax against certain casual sales and rentals
The tax imposed by this Part must be levied upon all casual rentals of living quarters 
in a hotel, rooming house, tourist camp or trailer camp and upon all casual sales, including 
rentals pursuant to section 1752, subsection 13, involving the sale of trailers, truck campers, 
motor vehicles, special mobile equipment, watercraft or aircraft unless the property is sold 
for resale at retail sale or to a corporation, partnership, trust, limited liability company or 
limited liability partnership when the seller is the owner of 50% or more of the common 
stock of the corporation or of the ownership interests in the partnership, trust, limited 
liability company or limited liability partnership.  This section does not apply to the rental 
of living quarters rented for a total rentals of fewer than 15 days in the calendar year, except 
that a person who owns and offers for rental more than one living quarters, trailer, truck 
camper, motor vehicle, special mobile equipment, watercraft or aircraft, each listed type of 
property considered separately, in the State during the calendar year is liable for collecting 
sales tax with respect to the rental of each unit of the type of property regardless of the 
number of days for which it is rented.  For purposes of this section, "special mobile 
equipment" does not include farm tractors and lumber harvesting vehicles or loaders.
Sec. B-5.  Application. This Part applies to sales made on or after January 1, 2026.
PART C
Sec. C-1.  5 MRSA §13080-Q, sub-§2, ¶C, as amended by PL 1997, c. 504, §1, is 
further amended to read:
C.  State income withholding taxes derived from employment at a business within the 
base area are not eligible for use in the calculation of a payment to the fund if the 
business is eligible during the current year to receive a payment under any other 
program authorized by Title 36, Part 9 that is based on the amount of employer 
withholding taxes and the business has made or makes an election to receive that 
payment. State income withholding taxes derived from employment at a business 
within the base area attributable to any qualified employee whose wages are included 
in computing the benefit base eligible for reimbursement to a Maine Employment Tax 
Increment Financing Program qualified business pursuant to Title 36, chapter 917 are 
not eligible for use in the calculation of a payment to the fund.
Sec. C-2.  36 MRSA §5122, sub-§2, ¶M-2, as amended by PL 2023, c. 523, Pt. B, 
§1, is further amended by amending subparagraph (2), division (a) to read:
(a)  "Employee retirement plan" means a state, federal or military retirement 
plan or any other retirement benefit plan established and maintained by an 
employer for the benefit of its employees under the Code, Section 401(a), 
Section 403 or Section 457(b), except that distributions made pursuant to a 
Section 457(b) plan are not eligible for the deduction provided by this 
paragraph if they are made prior to age 55 and are not part of a series of 
substantially equal periodic payments made for the life of the primary recipient 
or the joint lives of the primary recipient and that recipient's designated 
beneficiary.
Sec. C-3.  36 MRSA §5195, sub-§20, as enacted by PL 2019, c. 380, §2, is amended 
to read:
20.  Reviewed year.  "Reviewed year" means the taxable year of a partnership that is 
subject to a partnership-level audit, or that files an administrative adjustment request, from 
which federal adjustments arise.
Sec. C-4.  36 MRSA §5196, sub-§3, ¶B, as amended by PL 2021, c. 181, Pt. A, 
§8, is further amended by amending subparagraph (10) to read:
(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 are determined on the amount computed in subparagraph (9) as adjusted by any 
applicable credit pursuant to paragraph C.  For purposes of this subparagraph, 
notwithstanding any provision of law to the contrary, interest and penalty amounts 
with respect to the tax due under this subsection accrue beginning on the 15th day 
of the 3rd month following the end of the taxable year of a partnership that was 
subject to the partnership-level audit or administrative adjustment request; and
Sec. C-5.  36 MRSA §6753, sub-§4, ¶A, as enacted by PL 2009, c. 461, §26, is 
amended to read:
A.  Pursuant to Title 30‑A, section 5250‑J, subsection 4‑A, "base level of employment" 
may be adjusted to mean 25% of the average number of employees of that business 
over the 3 months immediately preceding the catastrophic occurrence for a qualified 
Pine Tree Development Zone business as defined in Title 30-A, section 5250-I, 
subsection 17.
SUMMARY
This bill does the following.
Part A:
1.  Expands the exception to the requirement that liens are notarized that applies to 
liens filed by the Department of Administrative and Financial Services, Maine Revenue 
Services to include those filed pursuant to the Maine Revised Statutes, Title 36, Part 9, 
thereby including liens filed pursuant to the property tax deferral program; and
2.  Removes the automatic extension for business equipment tax exemption 
applications and replaces it with an extension for good cause of up to 3 months, changes 
the filing deadline to May 1st and removes the requirement for Maine Revenue Services to 
provide paper copies of the application.
Part B:
1.  Limits the sales tax exemption for watercraft or materials used in watercraft sold to 
or used by a person that is not a resident of this State to exclude the lease or rental of 
watercraft; 
2.  Clarifies that, for the purposes of the sales tax exemption for sales sourced to tribal 
land, the sale of a motor vehicle to a tribal member or a tribal entity is sourced to tribal land 
if the vehicle is intended to be driven or transported to tribal land immediately upon receipt 
of the vehicle; and
3.  Clarifies that the tax levy on casual sales includes casual rentals and applies the 
existing 15-day safe harbor for the casual rental of living quarters to those rentals.
Part C:
1.  Updates the exclusion from the calculation of payments to the Loring Job Increment 
Financing Fund to also exclude state income withholding taxes that are based on the gross 
wages used to calculate the Maine Employment Tax Increment Financing Program benefit;
2.  Specifies that early retirement distributions from an employee retirement plan that 
are reported as normal distributions are not eligible for the pension income deduction unless 
part of a series of substantially equal periodic payments made for the life of the primary 
recipient or the joint lives of the primary recipient and that recipient's designated 
beneficiary;
3.  Clarifies that "reviewed year," in the laws governing income taxation of 
partnerships, includes the taxable year of a partnership that files an administrative 
adjustment request from which federal adjustments arise;
4.  Specifies that the original due date for calculating interest and penalties of any 
partnership income tax as a result of a federal adjustment from a partnership audit or 
administrative adjustment request is the 15th day of the 3rd month following the end of the 
taxable year of a partnership that was subject to the partnership-level audit or administrative 
adjustment request; and
5.  Corrects a cross-reference in the laws governing employment tax increment 
financing to reference a qualified Pine Tree Development Zone business.