An Act to Lower Property Taxes by Allowing a Local Option Sales
Maine Legislature, Session 132, LD 1869
Sponsors: NANGLE
Amends: 28-B MRSA §407, 36 MRSA §1818-A

Legislative Document
No. 1869
S.P. 739
In Senate, May 5, 2025
An Act to Lower Property Taxes by Allowing a Local Option Sales 
Tax on Recreational Cannabis Sales
Received by the Secretary of the Senate on May 1, 2025.  Referred to the Committee on 
Taxation pursuant to Joint Rule 308.2 and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator NANGLE of Cumberland.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  28-B MRSA §407 is enacted to read:
§407.  Municipal tax collection
1.  Municipal sales tax.  The municipality in which a cannabis establishment has been 
located pursuant to this Title may collect a sales tax on retail sales transactions conducted 
at that establishment pursuant to Title 36, section 1818-A.
2.  Unorganized and deorganized areas.  For purposes of sales tax collected pursuant 
to this section, retail sales transactions at cannabis establishments in unorganized and 
deorganized areas are deemed to occur in municipalities.
Sec. 2.  36 MRSA §1818-A is enacted to read:
§1818-A.  Local sales tax option on adult use cannabis and adult use cannabis 
products
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Cannabis product" means adult use cannabis and an adult use cannabis product as 
defined in Title 28-B, section 102-A, subsections 1 and 2, respectively.
B.  "Local option sales tax" means a sales tax imposed pursuant to subsection 2.
C.  "Participating municipality" means a municipality that has imposed a local option 
sales tax pursuant to this section.
2.  Authorization to impose local option sales tax.  A municipality by referendum 
conducted pursuant to subsection 8 may impose a local option sales tax of no more than 
1% on cannabis products. A municipality that adopts a local option sales tax pursuant to 
this section may not alter the range of items subject to sales tax under this Part.
3.  Notify State Tax Assessor.  A municipality that imposes a local option sales tax 
under subsection 2 shall notify the assessor at least 90 days before the local option sales 
tax is effective.
4.  Administration.  Retailers in a participating municipality shall transfer the revenue 
from the local option sales tax at the time and in the manner provided in section 1951-A 
for the transfer of state sales tax revenue. The tax is subject to the same enforcement 
provisions, interest, penalties and administrative actions as other taxes assessed under this 
Part.
5.  Distribution of revenue.  Each month, the assessor shall identify the amount of 
revenue attributable to each participating municipality under this section, subtract the costs 
of administering this section and certify the net amount for that participating municipality 
to the Treasurer of State. The Treasurer of State shall make monthly payments to municipal 
treasurers of the net amounts certified by the assessor under this subsection.
For purposes of this subsection, "costs of administering this section" means the lesser of 
the actual cost incurred by the assessor in administering this section and 2% of the total 
revenue generated by municipalities that impose a local option sales tax.
6.  Use of revenue by participating municipality.  The revenue raised by the 
imposition of a local option sales tax under this section must be held by the participating 
municipality in a special revenue account established for that purpose. Revenue from that 
account may be expended only for public safety and education initiatives.
7.  Effect on revenue sharing and other state aid programs.  Revenue received by 
the State pursuant to subsection 4 may not be considered to be receipts from the taxes 
imposed under this Part for the purpose of transfers to the Local Government Fund under 
Title 30-A, section 5681. Revenue received pursuant to subsection 4 may not be used to 
reduce or eliminate any funding otherwise due the county or participating municipality 
under any provision of law providing aid to the county or participating municipality, 
including, but not limited to, aid for schools, roads, municipal assistance or jails.
8.  Referendum.  The question of whether to impose a local option sales tax must be 
submitted to the legal voters of a municipality that seeks to impose the local option sales 
tax.  The referendum question must indicate the rate of the local option sales tax and 
identify the purposes for which the revenue will be used.
The petition process and voting must be held and conducted in accordance with Title 30-A, 
sections 2528, 2529 and 2532 even if the municipality has not accepted the provisions of 
Title 30-A, section 2528. The voting at elections must be held and conducted in accordance 
with Title 21-A. The municipal clerk shall prepare the required ballots, which must contain 
substantially the following question: 
"Do you favor a local option sales tax of up to 1% to be imposed by [insert 
name of municipality] on the sale of adult use cannabis and adult use 
cannabis products?"
The voters shall indicate by a cross or check mark placed against the word "Yes" or "No" 
their opinion of the same. 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 assessor.
The local option sales tax on cannabis products may be discontinued by referendum 
conducted in the same manner as the referendum adopting the local option sales tax under 
this subsection.
9.  Effective date of local option sales tax; acceptance by voters.  The local option 
sales tax 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 that municipality in the most recent gubernatorial election.
SUMMARY
This bill allows a municipality to approve by referendum a local option sales tax of up 
to 1% on sales of adult use cannabis and adult use cannabis products. The uses of the 
revenue from that sales tax is limited to funding public safety and education initiatives.