Sec. 1. 36 MRSA §1817 is enacted to read:

§1817. Municipal local option sales and use tax

1.__Definitions.__As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

A.__"Adjusted property tax rate" means a municipality's property tax rate per $1,000 of assessed valuation, adjusted for inflation using the Consumer Price Index and any neighborhood or municipality revaluations.

B.__"Eligible municipality" means a municipality or organized municipal township.__"Eligible municipality" does not include a county or a subsidiary unit of government such as an unorganized township, village, special district or school district.

C.__"Local option sales and use tax" means the sales and use tax imposed by an eligible municipality pursuant to subsection 2.

D.__"Participating county" means a county in which there are one or more participating municipalities.

E.__"Participating municipality" means an eligible municipality that has imposed a local option sales and use tax pursuant to this section.

F.__"Sales tax base" means those items subject to sales taxation under this Part.

G.__"Single transaction limitation" means a dollar limit that a municipality that imposes a local option sales and use tax pursuant to this section may place on the amount of tax the municipality collects from a single transaction subject to the local option tax.

2.__Authorization to impose local option sales and use tax.__ An eligible municipality may impose a local option sales and use tax of 1% on those items that are part of the sales tax base.__An eligible municipality that adopts a local option sales tax pursuant to this section may not alter the range of items subject to sales taxation.__A municipality that adopts a local option sales and use tax also may adopt a single transaction limitation.__The single transaction limitation may not exceed $100.