LD 1207
pg. 2
Page 1 of 2 An Act To Amend the Sales and Use Tax Law Regarding the Food Service and Lodgin... LD 1207 Title Page
Download Bill Text
LR 440
Item 1

 
or equipment in production commences before or after the
sale and leaseback transaction occurs; and

 
Sec. 3. 36 MRSA §1760, sub-§74, as enacted by PL 1989, c. 871, §15,
is amended to read:

 
74. Property used in production. Sales of tangible
personal property, other than fuel or electricity, that
becomes an ingredient or component part of, or that is
consumed or destroyed or loses its identity directly and
primarily in either the production of tangible personal
property for later sale or

 
lease, other than lease for use in this State, or the
production of tangible personal property pursuant to a
contract with the United States Government or any agency of
the United States Government. Tangible personal property is
"consumed or destroyed" or "loses its identity" in that
production if it has a normal physical life expectancy of less
than one year as a usable item in the use to which it is
applied. Sales of tangible personal property used in the
production of prepared food or used in the operation of a
hotel or rooming house are exempt under this subsection.

 
SUMMARY

 
Under current law, the sale of items to be used in the
production of tangible personal property is not subject to the
sales tax. The purpose of this bill is to extend that
treatment to the food service industry and lodging industry.
This bill exempts sales of tangible personal property used in
the production of prepared food or used in the operation of a
hotel or rooming house from the sales tax. It also exempts
sales of machinery and equipment used in the production of
prepared food or used in the operation of a hotel or rooming
house from the sales tax. These exemptions parallel existing
exemptions for property used in production and machinery and
equipment, respectively.


Page 1 of 2 Top of Page LD 1207 Title Page