An Act To Amend the Tax Laws

PART A

Sec. A-1. 10 MRSA §1100-Z, sub-§3, ¶G,  as amended by PL 2011, c. 548, §4, is further amended to read:

Sec. A-2. 10 MRSA §1100-Z, sub-§5,  as amended by PL 2011, c. 548, §6, is further amended to read:

Sec. A-3. 12 MRSA §13003, sub-§2, ¶A,  as amended by PL 2013, c. 86, §1 and affected by §5, is repealed.

Sec. A-4. 36 MRSA §191, sub-§2, ¶HH,  as amended by PL 2007, c. 328, §2, is repealed.

Sec. A-5. 36 MRSA §191, sub-§2, ¶¶XX and YY,  as enacted by PL 2013, c. 331, Pt. B, §5, are amended to read:

Sec. A-6. 36 MRSA §191, sub-§2, ¶ZZ  is enacted to read:

Sec. A-7. 36 MRSA §193, sub-§2, ¶C  is enacted to read:

Sec. A-8. 36 MRSA §841, sub-§2,  as repealed and replaced by PL 2013, c. 424, Pt. A, §24, is amended to read:

Sec. A-9. 36 MRSA §841, sub-§4,  as amended by PL 2005, c. 218, §10, is further amended to read:

Sec. A-10. 36 MRSA §1752, sub-§2-D,  as enacted by PL 2007, c. 658, §1, is repealed.

Sec. A-11. 36 MRSA §1752, sub-§2-E,  as enacted by PL 2007, c. 658, §2, is repealed.

Sec. A-12. 36 MRSA §1752, sub-§6-A,  as amended by PL 2007, c. 627, §41, is repealed and the following enacted in its place:

Sec. A-13. 36 MRSA §1752, sub-§14, ¶B,  as amended by PL 2011, c. 211, §22, is further amended to read:

Sec. A-14. 36 MRSA §1760, sub-§9,  as amended by PL 2011, c. 670, §1, is further amended to read:

Sec. A-15. 36 MRSA §1760, sub-§18-A,  as amended by PL 1975, c. 293, §4 and PL 2003, c. 689, Pt. B, §6, is further amended to read:

Sec. A-16. 36 MRSA §1760, sub-§23-C, ¶A,  as amended by PL 2013, c. 86, §2 and affected by §5, is repealed and the following enacted in its place:

Sec. A-17. 36 MRSA §1760, sub-§23-C, ¶E,  as enacted by PL 1999, c. 759, §2 and affected by §5, is amended to read:

Sec. A-18. 36 MRSA §1760, sub-§25, ¶C,  as enacted by PL 2009, c. 620, §1 and affected by §2, is amended to read:

Sec. A-19. 36 MRSA §1760, sub-§43,  as amended by PL 1983, c. 828, §6, is further amended to read:

Sec. A-20. 36 MRSA §1760, sub-§44,  as reallocated by PL 1983, c. 562, is amended to read:

Sec. A-21. 36 MRSA §1760, sub-§54,  as amended by PL 2001, c. 396, §23 and PL 2003, c. 689, Pt. B, §6, is further amended to read:

Sec. A-22. 36 MRSA §1760, sub-§73,  as enacted by PL 1989, c. 871, §15, is amended to read:

Sec. A-23. 36 MRSA §1764,  as amended by PL 2013, c. 331, Pt. C, §9, is further amended to read:

§ 1764. Tax against certain casual sales

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 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 of fewer than 15 days in the calendar year, except that a person who owns and offers for rental more than one property in the State during the calendar year is liable for collecting sales tax with respect to the rental of each unit 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. A-24. 36 MRSA §1811, 3rd ¶,  as repealed and replaced by PL 2003, c. 510, Pt. C, §12 and affected by §13, is amended to read:

Rental The value of the rental or lease of an automobile for one year or more must be taxed at the time of the lease or rental transaction at 5% of is the following: the total monthly lease payment multiplied by the number of payments in the lease or rental, the amount of equity involved in any trade-in and the value of any cash down payment. Collection and remittance of the tax is the responsibility of the person that negotiates the lease transaction with the lessee.

Sec. A-25. 36 MRSA §1812, sub-§1,  as amended by PL 2013, c. 368, Pt. M, §3, is further amended to read:

Sec. A-26. 36 MRSA §2012,  as amended by PL 1967, c. 88, is repealed and the following enacted in its place:

§ 2012.  Refund of sales tax on goods removed from State

A business that operates both within and without this State may request a refund of Maine sales tax paid at the time of purchase on tangible personal property that is placed in inventory in this State and subsequently withdrawn from inventory for:

In order to be eligible for the refund, the tangible personal property on which sales tax was paid may not be used by the business prior to its withdrawal from inventory for any purpose other than storage or the fabrication, attachment or incorporation described in subsection 2. The business must also maintain inventory records by which the acquisition and disposition of such tangible personal property may be traced. A refund may not be made when the taxing jurisdiction to which the tangible personal property is removed levies a sales or use tax. Refunds under this section must be requested in accordance with section 2011.

Sec. A-27. 36 MRSA §2019,  as enacted by PL 2007, c. 658, §3, is repealed.

Sec. A-28. 36 MRSA §2521-A, first ¶,  as repealed and replaced by PL 2007, c. 627, §54 and affected by §96, is amended to read:

Every insurance company, association, producer or attorney-in-fact of a reciprocal insurer subject to the tax imposed by this chapter shall make payment of estimated tax on or before the last day of each April, the 25th day of each June and the last day of each October file with the State Tax Assessor, on forms prescribed by the assessor, a return for the quarter ending on the last day of the preceding calendar month, except for the return due on the 25th day of June, which is for the quarter ending June 30th. A final return must be filed on or before March 15th, covering the prior calendar year. The 3 quarterly returns may be on an estimated basis, as long as each Each April and June installment equals estimated tax payment must equal 35% of the total tax paid for the preceding calendar year or at least 35% of the total tax to be paid for the current calendar year and each October installment equals estimated tax payment must equal 15% of the total tax paid for the preceding calendar year or at least 15% of the total tax to be paid for the current calendar year. A final return must be filed on or before March 15th covering the prior calendar year.

Sec. A-29. 36 MRSA §2551, sub-§10,  as amended by PL 2013, c. 331, Pt. C, §12, is further amended to read:

Sec. A-30. 36 MRSA §2551, sub-§11,  as amended by PL 2013, c. 331, Pt. C, §13, is further amended to read:

Sec. A-31. 36 MRSA §2552, sub-§1, ¶G,  as amended by PL 2013, c. 331, Pt. C, §14, is further amended to read:

Sec. A-32. 36 MRSA §2556, sub-§5,  as enacted by PL 2003, c. 673, Pt. V, §25 and affected by §29, is repealed.

Sec. A-33. 36 MRSA §2559,  as amended by PL 2011, c. 542, Pt. A, §141, is further amended to read:

§ 2559. Application of revenues

Revenues derived by the tax imposed by this chapter must be credited to a General Fund suspense account. On or before the last day of each month, the State Controller shall transfer a percentage of the revenues received by the State Tax Assessor during the preceding month pursuant to the tax imposed by section 2552, subsection 1, paragraphs A to F and L to the Local Government Fund as provided by Title 30-A, section 5681, subsection 5. The balance remaining in the General Fund suspense account must be transferred to service provider tax General Fund revenue. On or before the 15th day of each month, the State Controller shall transfer all revenues received by the assessor during the preceding month pursuant to the tax imposed by section 2552, subsection 1, paragraphs G to J and M to the Medical Care Services Other Special Revenue Funds account, the Other Special Revenue Funds Mental Health Services - Community Medicaid program, the Medicaid Services - Adult Developmental Services program and the Office of Substance Abuse - Medicaid Seed program within the Department of Health and Human Services.

Sec. A-34. 36 MRSA §4362-A, sub-§1,  as enacted by PL 1997, c. 458, §3, is amended to read:

Sec. A-35. 36 MRSA §4402, sub-§1,  as enacted by PL 2005, c. 627, §7, is amended to read:

Sec. A-36. 36 MRSA §5102, sub-§8,  as amended by PL 1997, c. 24, Pt. C, §9 and affected by §16, is further amended to read:

Sec. A-37. 36 MRSA §5122, sub-§2, ¶X,  as amended by PL 2013, c. 546, §14, is further amended to read:

Sec. A-38. 36 MRSA §5122, sub-§2, ¶BB,  as amended by PL 2011, c. 240, §31, is further amended to read:

Sec. A-39. 36 MRSA §5216-B, sub-§2,  as amended by PL 2013, c. 438, §6, is further amended to read:

PART B

Sec. B-1. 25 MRSA §1542-A, sub-§1, ¶I,  as amended by PL 2013, c. 546, §2, is further amended to read:

Sec. B-2. 25 MRSA §1542-A, sub-§1, ¶J,  as enacted by PL 2013, c. 546, §3, is amended to read:

Sec. B-3. 25 MRSA §1542-A, sub-§1, ¶¶K and L  are enacted to read:

Sec. B-4. 25 MRSA §1542-A, sub-§3, ¶K  is enacted to read:

Sec. B-5. 25 MRSA §1542-A, sub-§4,  as amended by PL 2013, c. 546, §5, is further amended to read:

Sec. B-6. 36 MRSA §194-B, first ¶,  as enacted by PL 2013, c. 546, §7, is amended to read:

As part of the process of evaluating an applicant for employment with the bureau on or after January 1, 2015, the assessor shall perform a national criminal history record check in accordance with this section , except the Associate Commissioner for Tax Policy shall perform a national criminal history record check for an applicant for employment with the Office of Tax Policy.

Sec. B-7. 36 MRSA §194-B, sub-§1,  as enacted by PL 2013, c. 546, §7, is amended to read:

Sec. B-8. 36 MRSA §194-B, sub-§3,  as enacted by PL 2013, c. 546, §7, is amended to read:

Sec. B-9. 36 MRSA §194-C  is enacted to read:

§ 194-C.  National criminal history record information of providers of contract services

The assessor shall perform a national criminal history record check of all the bureau's contractors and their respective employees, subcontractors and subcontractors' employees who provide services to the bureau under an identified contract. For purposes of this section, "identified contract" means a contract that the assessor determines involves access or the substantial possibility of access to the bureau's information technology systems or to confidential taxpayer information.

Sec. B-10. Effective date. That section of this Part that enacts the Maine Revised Statutes, Title 36, section 194-C takes effect March 1, 2016.

summary

Part A makes the following changes to the State's tax laws.

1. It requires qualified community development entities to notify the Department of Administrative and Financial Services, Bureau of Revenue Services when a qualified equity investment has been transferred. A transfer of the qualified equity investment affects who is eligible to claim a tax credit under the Maine New Markets Capital Investment Program in the year of the transfer and in any subsequent year.

2. It requires the Finance Authority of Maine to provide the Bureau of Revenue Services with copies of the annual reports currently required of qualified community development entities under the Maine New Markets Capital Investment Program.

3. Currently the Department of Inland Fisheries and Wildlife does not collect sales or use tax upon the registration of a snowmobile or all-terrain vehicle by a person who is not a resident of Maine. This bill repeals that provision of the law.

4. It repeals a provision allowing for the disclosure of benefit information under the Circuitbreaker Program to a representative of a municipality that has adopted a municipal property tax assistance program since no benefits are allowed under the Circuitbreaker Program for claims filed on or after August 1, 2013.

5. It authorizes disclosure to a Pine Tree Development Zone business of otherwise confidential tax information of a contractor or subcontractor that had assigned its claim to the business for sales or use tax reimbursement.

6. It clarifies that the State Tax Assessor may require unemployment compensation returns to be filed electronically. The Bureau of Revenue Services processes these returns and associated payments for the Department of Labor.

7. It repeals an obsolete reference to the Circuitbreaker Program in the property tax abatement law.

8. It strikes an erroneous reference in the property tax abatement law to a provision that mandates that the Commissioner of Agriculture, Conservation and Forestry, and other state officers, must provide the State Tax Assessor with information necessary for the valuing of land in the unorganized territory; the mandate has no relationship to the abatement of Maine property taxes.

9. It repeals definitions of 2 terms that are no longer used in the sales tax law: "forest land" and "forest products."

10. It clarifies the definition of "manufacturing facility" in the sales tax law.

11. It consolidates and simplifies the list of exclusions from the definition of "sale price" under the sales tax law by repealing references to 4 separate fees imposed by the State and enacting a general exclusion for any charge or fee imposed by state law.

12. It simplifies the sales tax exemption for coal, oil and wood.

13. It updates language with respect to the sales tax exemption for residential child care facilities so that it is consistent with the terminology employed by the Department of Health and Human Services.

14. It clarifies that the "immediate removal" sales tax exemption with respect to certain vehicles purchased or leased by nonresidents does not apply to any motor vehicle that is being leased on a short-term basis. Under current law, the exemption does not apply to an automobile that is being leased on a short-term basis.

15. It clarifies that the "immediate removal" sales tax exemption does not apply to a camper trailer or truck camper that is being leased on a short-term basis.

16. It clarifies existing language with respect to the partial sales tax exemption for certain watercraft purchased in Maine.

17. It updates language with respect to the sales tax exemption for child care facilities so that it is consistent with the terminology employed by the Department of Health and Human Services.

18. It updates the sales tax exemption for church-affiliated residential homes to delete obsolete language regarding charters granted by the Legislature.

19. It updates the sales tax exemption for food assistance purchases to include supplemental nutrition assistance program purchases and to delete an obsolete reference to food stamps.

20. It deletes obsolete language regarding the effective date of the sales tax exemption for tree seedlings used in commercial forestry.

21. It amends the sales tax imposed on certain casual sales to clarify that the tax does not apply to a sale made to a trust when the seller is the owner of 50% or more of the ownership interests in the trust. This change extends to trusts the same treatment extended to corporations, partnerships, limited liability companies and limited liability partnerships under current law.

22. It clarifies the method of calculating the sales tax on the rental or lease of an automobile for one year or more.

23. It removes gender-specific language.

24. It makes a minor change to more equitably expand the sales tax refund provision for certain items withdrawn from inventory for use in another jurisdiction.

25. It repeals an obsolete sales tax refund provision that was in effect only for certain purchases made from April 1, 2008 to September 30, 2008.

26. It clarifies that required quarterly insurance premiums tax payments are estimated payments and not payments made based on quarterly returns. An annual return is required to report the tax liability, and to reconcile estimated tax payments made, for the year.

27. It replaces the term "personal home care" in the service provider tax law with the term "personal care home" to mirror the term used in the rules of the Department of Health and Human Services.

28. It repeals the law governing the sourcing of mobile telecommunications services. Mobile telecommunications services are now sourced for state taxation purposes to the state of primary use, in conformity with the federal Mobile Telecommunications Sourcing Act, Public Law 106-252.

29. It amends the application of revenues provision in the service provider tax in order to add a reference to specify that the tax is imposed on group residential services for persons with brain injuries.

30. It clarifies that a cigarette distributor's license, like all other licenses and certificates issued by the State Tax Assessor, is not a license within the meaning of that term in the Maine Administrative Procedure Act.

31. It clarifies that a tobacco products distributor's license, like all other licenses and certificates issued by the State Tax Assessor, is not a license within the meaning of that term in the Maine Administrative Procedure Act.

32. It clarifies that the Maine net income of a unitary business is determined in the same way that it is for a taxable corporation that is not a member of a unitary business. Maine net income in both cases is calculated on the basis of federal taxable income apportionable to Maine modified by the addition and subtraction modifications provided by Title 36, section 5200-A. The clarification is a technical change and consistent with long-standing administrative procedures and practice.

33. It updates references in the statutory provision governing the subtraction modification that allows an individual who is an owner of an electing S corporation to recapture the bonus depreciation add-backs made by the business in prior years when it was treated as a C corporation for federal and Maine income tax purposes. This change reflects long-standing statutory and administrative practice.

34. It updates references to the statutory provisions governing the pension deduction in order to reflect recent law changes.

35. It clarifies that returns claiming a refundable seed capital credit must be filed the calendar year following the calendar year during which the investment was made.

Part B requires the State Tax Assessor to obtain national criminal history record information from the Federal Bureau of Investigation for any person who provides or is assigned to provide services to the Department of Administrative and Financial Services, Bureau of Revenue Services under a contract or subcontract that the assessor determines involves access or a substantial possibility of access to the bureau's information technology systems or to confidential taxpayer information. An individual who is assigned to provide services to the bureau pursuant to such a contract must consent to having fingerprints taken for purposes of a background check before the individual may provide such services.

This Part also brings applicants for employment with the bureau's Office of Tax Policy within the existing background check process required under the Maine Revised Statutes, Title 36, section 194-B.