Sec. 1. 36 MRSA §1952, as amended by PL 1981, c. 364, §27, is repealed and the following enacted in its place:

§1952. Payment of tax; interest

1.__Generally.__The taxes imposed by chapters 211 to 225 are due and payable at the time of the sale or, in the case of tax on rental for living quarters or rental of automobiles rented on a short-term basis, at the time the rental is payable. Upon such terms and conditions as the State Tax Assessor may prescribe, payment may be postponed to a date not later than the date when the sales so taxed are required to be reported. For cause, the State Tax Assessor may abate all or any part of the taxes.

2.__Construction trades.__Notwithstanding subsection 1, taxes imposed by this Part are due and payable for a person involved in the construction trades at the time of receipt of payment for the sale.__If the person involved in the construction trades receives a partial payment for a sale, then the tax for that portion is due upon receipt of the partial payment.__Any financing received by a person involved in the construction trades in exchange for the outstanding receipts or consideration from a sale including assignment of the receivable or debt due, direct loan or any other means is deemed payment for purposes of this subsection.__ In any event, taxes are due for a sale no later than 3 years after delivery of the materials or service that are sold.__For purposes of this section, a "person involved in the construction trades" means a person authorized to file a lien on real property pursuant to Title 10, section 3251.

SUMMARY

In the construction trades, taxable materials and services are often furnished on credit, with the supplier or service provider not being paid immediately for the materials or service. Current law requires, however, that taxes on such sales are due immediately at the time of the sale rather than when the supplier or provider is actually paid, causing hardship and cash flow problems for the supplier or provider. This bill allows a supplier or provider of taxable materials or services in the construction trades to pay taxes when the supplier or provider is actually paid for the taxable sale but no later than 3 years after the sale.