An Act To Provide Local Sales Tax Increment Disbursements
Sec. 1. 30-A MRSA §5686 is enacted to read:
§ 5686. Local sales tax increment disbursement
This bill requires payments beginning in fiscal year 2017-18 to municipalities of an amount, as determined by the State Tax Assessor, equal to 5% of the difference between the sales and use tax revenue attributable to the municipality in a fiscal year and the comparable amounts for fiscal year 2016-17, referred to as the "local sales tax increment." If the amount of sales and use tax collected in a fiscal year in a municipality is below that collected in fiscal year 2016-17, then the municipality receives no payment. The base year for determining the local sales tax increment is reset in fiscal year 2020-21 and every 4 years thereafter. The amount received may not reduce any other state aid or revenue sharing received by that municipality, and the municipality must use the amount received to reduce property taxes by the same amount. The Unorganized Territory Education and Services Fund receives the local sales tax increment payment for the unorganized territory and is subject to the same requirement to use the revenue to reduce property taxes.