10.__Charter municipalities.__A municipality with a charter that allows the creation of municipal debt obligation without a vote by the legal voters of the municipality is not subject to subsections 6, 7 and 8 and may impose or deauthorize the local option wage tax to be used in accordance with subsection 6 pursuant to the municipal charter.__A tax imposed pursuant to this subsection takes effect 120 days after enactment by the municipal officials and, if repealed, is repealed on the first day of the month following 90 days after notification of the assessor.

11.__Local Option Wage Tax Fund.__The Local Option Wage Tax Fund is established within the bureau to enable the assessor to segregate and administer the funds collected and attributable to each municipality that adopts a local option wage tax.

SUMMARY

This bill allows municipalities to adopt a local option wage tax at a rate of not more than 2% of the amount of the Maine income tax owed under the Maine Revised Statutes, Title 36, chapter 803.

All the provisions regarding assessment, collection and enforcement of the state tax also apply to the local option wage tax. The State shall assess and collect the local wage tax along with the state wage tax and return the revenue raised to the municipality. The municipality must notify the State Tax Assessor at least 90 days before the local wage tax goes into effect. This will give the State Tax Assessor time to set up the procedures for administering the local tax.

The State Tax Assessor shall determine the amount of revenue raised by each municipality's local wage tax each month, subtract the administrative costs of the local tax and certify the amount to be returned to each municipality. The Treasurer of State shall pay that certified amount to each participating municipality each month.

The additional revenue raised by a local option wage tax must be used by the municipality to finance specifically approved major capital projects.