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PUBLIC LAWS OF MAINE
First Regular Session of the 121st

CHAPTER 391
H.P. 1075 - L.D. 1470

An Act To Make Minor Substantive Changes to the Tax Laws

Be it enacted by the People of the State of Maine as follows:

     Sec. 1. 36 MRSA §1861-A, as amended by PL 2001, c. 583, §12, is further amended to read:

§1861-A.   Reporting use tax on individual income tax returns

     The assessor shall provide that individuals report use tax on items with a purchase price of $5,000 or less on their Maine individual income tax returns. Taxpayers are required to attest to the amount of their use tax liability for the period of the tax return. Alternatively, they may elect to report an amount that is .04% of their Maine adjusted gross income. The table amount does not relate to items with a purchase price in excess of $1,000. Liability arising from such items must be added to the table amount. Upon subsequent review, if use tax liability for the period of the return exceeds the amount of liability arising from the return, a credit of the amount of liability arising from the return is allowed subject to the limitation set out in this section. The credit is limited to the amount of liability arising from the return for items with a sale price of $1,000 or less and may be applied only against a liability determined on review with regard to items with a sale price of $1,000 or less. Use tax on any item with a purchase price of more than $5,000 must be reported in accordance with section 1951-A.

     Sec. 2. 36 MRSA §4641, sub-§1-A, ¶¶A and B, as enacted by PL 2001, c. 559, Pt. I, §1 and affected by §15, are amended to read:

     Sec. 3. 36 MRSA §4641-D, 2nd ¶ from the end, as amended by P&SL 1975, c. 78, §21, is further amended to read:

     The register of deeds shall transmit both copies of the declaration of value to the State Tax Assessor not later than 40 days from the date of recordation of the deed subject to the tax or, in the case of a transfer of a controlling interest subject to tax under this chapter, no later than the 10th day of the month following the month in which the report of the transfer is received by the register of deeds.

     Sec. 4. 36 MRSA §4641-E, 2nd ¶, as amended by PL 2001, c. 559, Pt. I, §11 and affected by §15, is further amended to read:

     Within 3 years of the recording of a deed subject to the tax imposed by this chapter or of the date on which a transfer of a controlling interest in an entity subject to taxation under this chapter is reported to the register of deeds, the State Tax Assessor may examine any books, papers, records or memoranda of the grantor or grantee bearing upon the amount of tax payable, and may enforce that right of examination by subpoena. If the assessor determines that there is a deficiency of taxes due under this chapter, such deficiency must be assessed, together with interest and penalties, with notice to the persons liable, but no such assessment may be made more than 3 years after the date of recording or transfer.

     Sec. 5. 36 MRSA §5122, sub-§2, ¶M, as amended by PL 2001, c. 396, §34 and affected by §50, is further amended to read:

     Sec. 6. 36 MRSA §5142, sub-§1, as amended by PL 1993, c. 478, §1, is further amended to read:

     1. General. The Maine adjusted gross income of a nonresident individual derived from or connected with sources within in this State is the sum of the following:

     Sec. 7. 36 MRSA §5215, sub-§3, ¶A, as amended by PL 1997, c. 761, §3, is further amended to read:

     Sec. 8. 36 MRSA §5215, sub-§3, ¶B, as amended by PL 1999, c. 708, §44, is further amended to read:

     Sec. 9. 36 MRSA §5217-A, as amended by PL 1991, c. 591, Pt. N, §16 and affected by §17, is further amended to read:

§5217-A.    Income tax paid to other taxing jurisdiction

     A resident individual is allowed a credit against the tax otherwise due under this Part, excluding the tax imposed by section 5203-A, for the amount of income tax imposed on that individual for the taxable year by another state of the United States, a political subdivision of any such state, the District of Columbia or any political subdivision of a foreign country that is analogous to a state of the United States with respect to income subject to tax under this Part that is derived from sources in that taxing jurisdiction also subject to tax under this Part. In determining whether income is derived from sources in another jurisdiction, the assessor may not employ the law of the other jurisdiction but shall instead assume that a statute equivalent to section 5142 applies in that jurisdiction. The credit, for any of the specified taxing jurisdictions, may not exceed the proportion of the tax otherwise due under this Part, excluding the tax imposed by section 5203-A, that the amount of the taxpayer's Maine adjusted gross income derived from sources in that taxing jurisdiction bears to the taxpayer's entire Maine adjusted gross income; provided except that, when a credit is claimed for taxes paid to both a state and a political subdivision of a state, the total credit allowable for those taxes does not exceed the proportion of the tax otherwise due under this Part, excluding the tax imposed by section 5203-A, that the amount of the taxpayer's Maine adjusted gross income derived from sources in the other state bears to the taxpayer's entire Maine adjusted gross income.

     Sec. 10. 36 MRSA §5218, as amended by PL 2003, c. 20, Pt. FF, §1, is further amended to read:

§5218. Income tax credit for child care expenses

     1. Resident taxpayer. A resident individual is allowed a credit against the tax otherwise due under this Part in the amount of 25% of the federal tax credit allowable for child and dependent care expenses in the same tax year, except that for tax years beginning in 2003, 2004 and 2005, the applicable percentage is 21.5% instead of 25%.

     2. Nonresident or part-year resident taxpayer. A nonresident or part-year resident individual is allowed a credit against the tax otherwise due under this Part in the amount of 25% of the federal tax credit allowable for child and dependent care expenses multiplied by the ratio of the individual's Maine adjusted gross income, as defined in section 5102, subsection 1-C, paragraph B, to the nonresident's individual's entire federal adjusted gross income, as modified by section 5122, except that for tax years beginning in 2003, 2004 and 2005, the applicable percentage is 21.5% instead of 25%.

     2-A. Part-year resident taxpayer. An individual who files a return as a part-year resident in accordance with section 5224-A is allowed a credit against the tax otherwise due under this Part in the amount of 25% of the federal tax credit allowable for child and dependent care expenses multiplied by a ratio, the numerator of which is the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph A for that portion of the taxable year during which the individual was a resident plus the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph B for that portion of the taxable year during which the individual was a nonresident and the denominator of which is the individual's entire federal adjusted gross income, as modified by section 5122.

     3. Quality child care services. The credit provided by subsections 1 and, 2 and 2-A doubles in amount if the child care expenses were incurred through the use of quality child care services. As used in this section, unless the context otherwise indicates, "quality child care services" has the meaning set forth as defined in section 5219-Q, subsection 1.

     4. Refund. The credit allowed by this section may result in a refund of up to $500. In the case of a nonresident individual, the refundable portion of the credit may not exceed $500 multiplied by the ratio of the individual's Maine adjusted gross income, as defined in section 5102, subsection 1-C, paragraph B, to the individual's entire federal adjusted gross income, as modified by section 5122. In the case of an individual who files a return as a part-year resident in accordance with section 5224-A, the refundable portion of the credit may not exceed $500 multiplied by a ratio, the numerator of which is the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph A for that portion of the taxable year during which the individual was a resident plus the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph B for that portion of the taxable year during which the individual was a nonresident and the denominator of which is the individual's entire federal adjusted gross income, as modified by section 5122.

     Sec. 11. 36 MRSA §5220, sub-§§3 and 4, as enacted by P&SL 1969, c. 154, §F, §1, are amended to read:

     3. Resident estates or trusts. Every resident estate or trust which is required to file a federal income tax return. that has for the taxable year:

     4. Certain nonresident estates or trusts. Every nonresident estate or trust which that has for the taxable year has from sources within this State,:

     Sec. 12. 36 MRSA §6652, sub-§1, as amended by PL 2001, c. 396, §45, is further amended to read:

     1. Generally. A person against whom taxes have been assessed pursuant to Part 2, except for chapters 111 and 112, with respect to eligible property and who has paid those taxes is entitled to reimbursement of those taxes from the State as provided in this chapter. For purposes of this chapter, a tax applied as a credit against a tax assessed pursuant to chapter 111 or 112 is a tax assessed pursuant to chapter 111 or 112. Eligible property is subject to reimbursement pursuant to this chapter for up to 12 property tax years, but the 12 years must be reduced by one year for each year during which a taxpayer included the same property in its investment credit base under section 5219-D, 5219-E or 5219-M and claimed the credit provided in one or more of those sections on its income tax return, and reimbursement may not be made for taxes assessed in a year in which one or more of those credits is taken. A successor in interest of a person against whom taxes have been assessed with respect to eligible property is entitled to reimbursement pursuant to this section, whether the tax was paid by the person assessed or by the successor, as long as a transfer of the property in question to the successor has occurred and the successor is the owner of the property as of August 1st, of the year in which a claim for reimbursement may be filed pursuant to section 6654. For purposes of this paragraph, "successor in interest" includes the initial successor and any subsequent successor. When an eligible successor in interest exists, the successor is the only person to whom reimbursement under this chapter may be made with respect to the transferred property.

     Sec. 13. 36 MRSA §6753, sub-§12, as amended by PL 1999, c. 388, §2, is further amended to read:

     12. Qualified employees. "Qualified employees" means new, full-time employees hired in this State by a qualified business and for whom a retirement program subject to the Employee Retirement Income Security Act of 1974, 29 United States Code, Sections 101 to 1461, as amended, and group health insurance are provided, and whose income derived from employment with the applicant, calculated on a calendar year basis is greater than the most recent average annual per capita income wage in the county in which the qualified employee is employed and whose state income withholding taxes are subject to reimbursement to the qualified business under this chapter. "Qualified employees" must be residents of this State.

     Sec. 14. Application. That section of this Act that amends the Maine Revised Statutes, Title 36, section 5220, subsections 3 and 4 applies to tax years beginning on or after January 1, 2003.

Effective September 13, 2003, unless otherwise indicated.

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