An Act To Reduce the Capital Gains Tax
Be it enacted by the People of the State of Maine as follows:
PART A
Sec. A-1. 36 MRSA §5122, sub-§2, ¶Y is enacted to read:
Y. For income tax years beginning on January 1, 2007, to the extent included in federal adjusted gross income, an amount equal to 22.5% of the net positive long-term capital gain. For income tax years beginning on or after January 1, 2008, to the extent included in federal adjusted gross income, an amount equal to 45% of the net positive long-term capital gain.
Sec. A-2. 36 MRSA §5200-A, sub-§2, ¶R is enacted to read:
R. For income tax years beginning on January 1, 2007, to the extent included in federal adjusted gross income, an amount equal to 22.5% of the net positive long-term capital gain. For income tax years beginning on or after January 1, 2008, to the extent included in federal adjusted gross income, an amount equal to 45% of the net positive long-term capital gain.
PART B
Sec. B-1. 36 MRSA §4365, first ¶, as amended by PL 2005, c. 457, Pt. AA, §1 and affected by §8, is further amended to read:
A tax is imposed on all cigarettes imported into this State or held in this State by any person for sale at the rate of 100 150 mills for each cigarette. Payment of the tax is evidenced by the affixing of stamps to the packages containing the cigarettes.
Sec. B-2. 36 MRSA §4365-F, as enacted by PL 2005, c. 457, Pt. AA, §3 and affected by §8, is repealed.
Sec. B-3. 36 MRSA §4365-G is enacted to read:
The following provisions apply to cigarettes held for resale on October 1, 2007.
1. Stamped rate. Cigarettes stamped at the rate of 100 mills per cigarette and held for resale after September 30, 2007 are subject to tax at the rate of 150 mills per cigarette.
2. Liability. A person possessing cigarettes for resale is liable for the difference between the tax rate of 150 mills per cigarette and the tax rate of 100 mills per cigarette in effect before October 1, 2007. Stamps indicating payment of the tax imposed by this section must be affixed to all packages of cigarettes held for resale as of October 1, 2007, except that cigarettes held in vending machines as of that date do not require that stamp.
3. Vending machines. Notwithstanding any other provision of this chapter, it is presumed that all cigarette vending machines are filled to capacity on October 1, 2007 and the tax imposed by this section must be reported on that basis. A credit against this inventory tax must be allowed for cigarettes stamped at the rate of 150 mills per cigarette placed in vending machines before October 1, 2007.
4. Payment. Payment of the tax imposed by this section must be made to the assessor by October 1, 2007, accompanied by forms prescribed by the assessor.
Sec. B-4. 36 MRSA §4366-A, sub-§2, ¶C, as amended by PL 2005, c. 457, Pt. AA, §4 and affected by §8, is further amended to read:
C. For stamps at the face value of 50 mills sold on or after July 1, 2002, 2.03%; and
Sec. B-5. 36 MRSA §4366-A, sub-§2, ¶D, as enacted by PL 2005, c. 457, Pt. AA, §5 and affected by §8, is amended to read:
D. For stamps at the face value of 100 mills sold prior to October 1, 2007, 1.15% . ; and
Sec. B-6. 36 MRSA §4366-A, sub-§2, ¶E is enacted to read:
E. For stamps at the face value of 150 mills, 0.82%.
Sec. B-7. 36 MRSA §4403, sub-§1, as amended by PL 2005, c. 627, §8, is further amended to read:
1. Smokeless tobacco. A tax is imposed on all smokeless tobacco, including chewing tobacco and snuff, at the rate of 78% 117% of the wholesale sales price beginning October 1, 2005 October 1, 2007.
Sec. B-8. 36 MRSA §4403, sub-§2, as amended by PL 2005, c. 627, §8, is further amended to read:
2. Other tobacco. A tax is imposed on cigars, pipe tobacco and other tobacco intended for smoking at the rate of 20% 30% of the wholesale sales price beginning October 1, 2005 October 1, 2007.
Sec. B-9. Effective date. Those sections of this Part that amend the Maine Revised Statutes, Title 36, sections 4365 and 4403; that repeal Title 36, section 4365-F; and that enact Title 36, section 4365-G and section 4366-A, subsection 2, paragraph E take effect October 1, 2007.
summary
This bill removes a portion of net positive long-term capital gains from income for the purposes of calculating income tax liability. This bill also increases the cigarette tax by $1.00 per pack, increases the tobacco products tax on smokeless tobacco from 78% to 117% of the wholesale sales price and increases the tax on other tobacco products from 20% to 30% of the wholesale sales price.