SP0062, LD 176, item 1, An Act Regarding Sales and Use Tax Audit Procedures and Enforcement

An Act Regarding Sales and Use Tax Audit Procedures and Enforcement

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 36 MRSA §141-A is enacted to read:

§ 141-A. Assessment procedures; enforcement

Beginning October 1, 2011, if the State Tax Assessor determines after audit or investigation that a taxpayer has failed to collect and pay sales tax or pay use tax with regard to a transaction, the assessor may not make an assessment for that tax for any period preceding the time when the taxpayer has reason to know that the sales or use tax applies to that type of transaction.

1. Standard. A taxpayer has reason to know that a sales or use tax applies if:

A. The application of the sales or use tax to the sale could be determined by a reasonable person from the laws of the State, rules adopted by the assessor or tax bulletins or other guidance issued by the assessor;

B. The application of the sales or use tax to the type of transaction in question has been determined by any court in the State or by any other adjudicatory body, when the decision has been made public;

C. A communication has been made to the taxpayer directly, to an industry group or in a public forum by the assessor or any person responsible for enforcement of the laws of the State that the sales or use tax may apply to the type of transaction in question;

D. The issue of the application of the sales tax to the type of transaction in question has been the subject of discussion at any government-sponsored or industry-sponsored education program; or

E. The obligation to collect and pay sales tax or pay use tax on transactions of the type in question has been recognized by at least 10% of the taxpayers who are involved in transactions of the type in question.

summary

This bill prohibits the retroactive assessment of sales and use tax when a taxpayer who should have collected or paid the tax does not have reason to know that sales or use tax applies to that type of transaction. The bill specifies situations in which a person has reason to know that a sales or use tax applies.

SP0062 LD 176	First Regular Session - 125th Maine Legislature		LR 123 Item 1
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