SUMMARY

This bill makes the following changes to the laws governing taxation.

1. It reduces the period within which a taxpayer may elect to deem a claim for refund or credit denied from 9 years to 4 years and reduces the period of time after which a claim for refund or credit is deemed denied by operation of law from 10 years to 4 years. These changes reduce the State's exposure to very old refund claims.

2. It provides confidentiality protection to information provided to the State Tax Assessor and used for preparing legislation or legislative analysis.

3. It establishes a requirement that boat yards and marinas currently required to maintain a list of watercraft must provide a copy of the list to the State Tax Assessor upon request and expands the kinds of data that must be included. These changes are needed to support revenue discovery efforts on watercraft used in Maine.

4. It clarifies that the sales tax exemption for motor vehicles leased to nonresidents does not apply to short-term rentals of automobiles to nonresidents. This change corrects an apparent oversight in the drafting of statutory changes enacted in 2002.

5. It limits the requirement to add back net operating losses that have been carried back to previous years for federal income tax purposes to tax years beginning before January 1, 2002, consistent with other recent changes in Maine's treatment of federal net operating loss deductions. The bill also standardizes a reference to the United States Internal Revenue Code.

6. It allows taxpayers to use a federal net operating loss to offset Maine addition modifications in the year of the loss, thereby preventing a situation in which a taxpayer might have a loss for federal purposes but taxable income for Maine purposes.

7. It provides that the proceeds from the sale of the future income stream derived from a lottery ticket purchased in Maine is Maine-source income subject to Maine income tax.