HP1058, LD 1477, item 1, An Act To Impose a Temporary One Percent Sales Tax for Education and Revenue Sharing

An Act To Impose a Temporary One Percent Sales Tax for Education and Revenue Sharing

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

Sec. 1. 36 MRSA §1811-C is enacted to read:

§ 1811-C. Additional sales and use tax; use of revenue; contingent decrease

1. Additional sales and use tax. In addition to the tax imposed pursuant to section 1811, a tax is imposed on the value of all tangible personal property and taxable services sold at retail in this State that are taxed at the rate of 5% pursuant to section 1811. The rate of tax is 1% unless adjusted pursuant to subsection 3. The tax imposed by this subsection must be collected and remitted in the same manner as the 5% tax imposed pursuant to section 1811 and is subject to all the requirements of this Part.

2. Application of revenues. Notwithstanding Title 30-A, section 5681, subsection 5 or any other law to the contrary, revenue from the tax imposed and collected pursuant to subsection 1 must be credited to a General Fund suspense account. Beginning November 10, 2013 and no later than the 10th of every month thereafter, the State Controller shall transfer 70% of the revenues received by the State Tax Assessor during the preceding month pursuant to the tax imposed by subsection 1 to general purpose aid for local schools within the Department of Education and 30% to the Local Government Fund as provided by Title 30-A, section 5681, subsection 5 except that, if the revenue received during a fiscal year exceeds $280,000,000, the amount of revenue in excess of $280,000,000 must be transferred to the Local Government Fund as provided by Title 30-A, section 5681, subsection 5. Revenue generated pursuant to this section may be used only for the purposes specified in this subsection.

3. Contingent decrease in rate. The tax imposed pursuant to subsection 1 is subject to a decrease in rate pursuant to this subsection.

A. Beginning in 2015 and every year thereafter, on or before May 15th of each year, the State Budget Officer shall present a final estimate of General Fund revenues for the current fiscal year, taking into consideration an estimate of the Revenue Forecasting Committee under Title 5, section 1710-E, to the joint standing committee of the Legislature having jurisdiction over taxation matters.

B. If General Fund revenues for any fiscal year, as determined by the State Controller at the close of the fiscal year, exceed those of the previous fiscal year by 8% or more, on a base-to-base comparison excluding one-time revenue gains and losses, the tax on the sale of personal property and taxable services imposed pursuant to subsection 1 must decrease to 0.5%, unless the tax rate is 0.5%, in which case the tax is eliminated, on the subsequent October 1st, unless the Legislature takes action to prevent the reduction.

4. Sales tax exemption commission. Following a decrease pursuant to subsection 3 in the rate of tax on the sale of personal property and taxable services imposed pursuant to subsection 1, the joint standing committee of the Legislature having jurisdiction over taxation matters, with assistance from the State Tax Assessor and the State Budget Officer, shall review statutory exemptions from the sales and use tax imposed pursuant to this Part and determine whether those statutory exemptions serve a purpose beneficial to the State that outweighs the cost of the exemptions. The joint standing committee may report out legislation regarding the review to a first or second regular session of the Legislature.

Sec. 2. 36 MRSA §1812, sub-§1, ¶A-3 is enacted to read:

A-3. If the tax rate is 6%:

Amount of Sale Price	Amount of Tax
$0.01 to $0.09, inclusive	0¢
.10 to .16, inclusive	1¢
.17 to .33, inclusive	2¢
.34 to .50, inclusive	3¢
.51 to .66, inclusive	4¢
.67 to .83, inclusive	5¢
.84 to 1.00, inclusive	6¢

Sec. 3. 36 MRSA §1861, as amended by PL 1995, c. 640, §6, is further amended to read:

§ 1861. Imposition

A tax is imposed, at the respective rate provided in section 1811 and section 1811-C, on the storage, use or other consumption in this State of tangible personal property or a service, the sale of which would be subject to tax under section 1764 or , 1811 or 1811-C. Every person so storing, using or otherwise consuming is liable for the tax until the person has paid the tax or has taken a receipt from the seller, as duly authorized by the assessor, showing that the seller has collected the sales or use tax, in which case the seller is liable for it. Retailers registered under section 1754-B or 1756 shall collect the tax and make remittance to the assessor. The amount of the tax payable by the purchaser is that provided in the case of sales taxes by section 1812. When tangible personal property purchased for resale is withdrawn from inventory by the retailer for the retailer's own use, use tax liability accrues at the date of withdrawal.

Sec. 4. Effective date. This Act takes effect October 1, 2013.

SUMMARY

This bill imposes an additional 1% sales and use tax on items of personal property and taxable services currently subject to the 5% sales and use tax. The additional tax is collected and remitted and is subject to the same requirements as the 5% sales and use tax. Of the revenue generated by the 1% sales and use tax, 70% is transferred to general purpose aid for local schools and 30% is transferred to the Local Government Fund to be used for revenue sharing. If the amount of revenue generated in a fiscal year exceeds $280,000,000, the excess amount is transferred for revenue sharing.

The additional 1% sales and use tax may be decreased to 0.5% and then eliminated if General Fund revenues for any fiscal year, as determined by the State Controller at the close of the fiscal year, exceed those of the previous fiscal year by 8% or more for that fiscal year.

This bill requires the joint standing committee of the Legislature having jurisdiction over taxation matters, each time the additional sales and use tax is decreased, to examine the sales tax exemptions and determine whether those sales tax exemptions serve a purpose beneficial to the State that outweighs the cost of those sales tax exemptions.

HP1058 LD 1477	Session - 126th Maine Legislature		LR 1905 Item 1
	Bill Tracking, Additional Documents	Chamber Status

Bill Tracking		Chamber Status
Amendments	Testimony, Public Hearings & Work Sessions		Committee Information
Other Documents			Title & Section

Search Bill Text		Search Bill Status
Bill Directory	Session Information		Legislative Information
Download MS-Word, Printed PDF		Maine Legislature

Office of Legislative Information 100 State House Station Augusta, ME 04333		voice: (207) 287-1692 fax: (207) 287-1580 tty: (207) 287-6826
Word Viewer for Windows		Disclaimer