An Act To Amend the State's Tax Laws
Sec. 1. 25 MRSA §2399, 2nd ¶, as amended by PL 2013, c. 95, §1, is further amended to read:
Every fire insurance company or association that does business or collects premiums or assessments in the State shall pay to the State Tax Assessor, in addition to the taxes now imposed by law to be paid by those companies or associations, 1.4% of the gross direct premiums for fire risks written in the State, less the amount of all direct return premiums thereon and all dividends paid to policyholders on direct fire premiums. The Beginning in 2013 and every 5 years thereafter, by October 1st the Department of Professional and Financial Regulation, Bureau of Insurance shall determine every for the subsequent 5 years the basis percentage of fire risk allocated to each line of insurance, and every fire insurance company or association shall pay the 1.4% tax based on that basis allocation. That tax must be paid as provided for insurance premium taxes as specified in Title 36, section 2521-A, except that the tax prescribed by this section must be paid on an estimated basis at the end of each month starting July 31, 1998, with each installment equal to at least 1/12 of the estimated total tax to be paid for the current calendar year. The State Tax Assessor shall pay over all receipts from that tax to the Treasurer of State daily. Of these funds 75.7% must be used to defray the expenses incurred by the Commissioner of Public Safety in administering all fire preventive and investigative laws and rules and in educating the public in fire safety and is appropriated for those purposes and to carry out the administration and duties of the Office of the State Fire Marshal. Of these funds 24.3% must be used to defray the expenses of the fire training and education program as established in Title 20-A, chapter 319.
Sec. 2. 36 MRSA §653, sub-§1, ¶G, as amended by PL 2013, c. 222, §1, is further amended to read:
Sec. 3. 36 MRSA §1752, sub-§17, as amended by PL 1997, c. 557, Pt. B, §2 and affected by §14 and Pt. G, §1, is further amended to read:
Sec. 4. 36 MRSA §1754-B, sub-§1-A, as enacted by PL 2013, c. 200, §4 and affected by §6, is amended to read:
(1) "Affiliated person" means a person that is a member of the same controlled group of corporations as the seller or any other entity that, notwithstanding its form of organization, bears the same ownership relationship to the seller as a corporation that is a member of the same controlled group of corporations. For purposes of this subparagraph, “controlled group of corporations” has the same meaning as in the Code, Section 1563(a).
(2) "Person" means an individual or entity that qualifies as a person under the Code, Section 7701(a)(1).
(3) "Seller" means a person that sells, other than in a casual sale, tangible personal property or taxable services.
(1) Sells a similar line of products as the seller and does so under a business name that is the same as or similar to that of the seller;
(2) Maintains an office, distribution facility, warehouse or storage place or similar place of business in the State to facilitate the delivery of property or services sold by the seller to the seller's customers;
(3) Uses trademarks, service marks or trade names in the State that are the same as or substantially similar to those used by the seller;
(4) Delivers, installs, assembles or performs maintenance services for the seller's customers within the State;
(5) Facilitates the seller's delivery of property to customers in the State by allowing the seller's customers to pick up property sold by the seller at an office, distribution facility, warehouse, storage place or similar place of business maintained by the person in the State; or
(6) Conducts any activities in the State that are significantly associated with the seller's ability to establish and maintain a market in the State for the seller's sales.
A seller who meets the requirements of this paragraph shall register with the assessor and collect and remit taxes in accordance with the provisions of this Part. A seller may rebut the presumption created in this paragraph by demonstrating that the person's activities in the State are not significantly associated with the seller's ability to establish or maintain a market in this State for the seller's sales.
(1) Directly or indirectly refers potential customers, whether by a link on an Internet website, by telemarketing, by an in-person presentation or otherwise, to the seller; and
(2) The cumulative gross receipts from retail sales by the seller to customers in the State who are referred to the seller by all persons with this type of an agreement with the seller are in excess of $10,000 during the preceding 12 months.
A seller who meets the requirements of this paragraph shall register with the assessor and collect and remit taxes in accordance with the provisions of this Part.
A seller may rebut the presumption created in this paragraph by submitting proof that the person with whom the seller has an agreement did not engage in any activity within the State that was significantly associated with the seller's ability to establish or maintain the seller's market in the State during the preceding 12 months. Such proof may consist of sworn, written statements from all of the persons within this State with whom the seller has an agreement stating that they did not engage in any solicitation in the State on behalf of the seller during the preceding 12 months; these statements must be provided and obtained in good faith.
A person who enters into an agreement with a seller under this paragraph to refer customers by a link on an Internet website is not required to register or collect taxes under this Part solely because of the existence of the agreement.
Sec. 5. 36 MRSA §4102, sub-§6, ¶C, as enacted by PL 2011, c. 380, Pt. M, §9, is amended to read:
Sec. 6. 36 MRSA §4109, sub-§1, as enacted by PL 2011, c. 380, Pt. M, §9, is amended to read:
Sec. 7. 36 MRSA §5122, sub-§2, ¶M-1, as enacted by PL 2011, c. 657, Pt. R, §2 and affected by §3, is amended to read:
For purposes of this paragraph, the following terms have the following meanings.
(1) "Employee retirement plan" means a state, federal or military retirement plan or any other retirement benefit plan established and maintained by an employer for the benefit of its employees under the Code, Section 401(a), Section 403 or Section 457(b), except that distributions made pursuant to a Section 457(b) plan are not eligible for the deduction provided by this paragraph if they are made prior to age 55 and are not part of a series of substantially equal periodic payments made for the life of the primary recipient or the joint lives of the primary recipient and that recipient's designated beneficiary.
(2) "Individual retirement account" means an individual retirement account under Section 408 of the Code, a Roth IRA under Section 408A of the Code, a simplified employee pension under Section 408(k) of the Code or a simple retirement account for employees under Section 408(p) of the Code.
(3) "Military retirement plan" means retirement plan benefits received as a result of service in the active or reserve components of the Army, Navy, Air Force, Marines or Coast Guard.
(4) "Pension deduction amount" means $10,000 for tax years beginning on or after January 1, 2014.
(5) "Primary recipient" means the individual upon whose earnings or contributions the retirement plan benefits are based or the surviving spouse of that individual.
(6) "Retirement plan benefits" means employee retirement plan benefits, except pick-up contributions for which a subtraction is allowed under paragraph E, reported as pension or annuity income for federal income tax purposes and individual retirement account benefits reported as individual retirement account distributions for federal income tax purposes. "Retirement plan benefits" does not include distributions that are subject to the tax imposed by the Code, Section 72(t);
Sec. 8. 36 MRSA §5122, sub-§2, ¶X, as amended by PL 2007, c. 466, Pt. A, §67 and affected by §70, is further amended to read:
Sec. 9. 36 MRSA §5251, as amended by PL 2007, c. 437, §19 and affected by §22, is further amended to read:
§ 5251. Information statement
Every person who is required to deduct and withhold tax under this Part, or who would have been required to deduct and withhold tax if an employee had claimed no more than one withholding exemption, shall furnish a written statement as prescribed by the assessor to each person in respect to the items of income subject to withholding paid to that person during the calendar year on or before January 31st of the succeeding year, or, in the case of an employee who is terminated before the close of the calendar year, within 30 days from the date of receipt of a written request from the employee if that 30-day period ends before January 31st. The assessor may establish an alternative due date for providing a written statement under this section that is consistent with the due date for the related federal statement. The statement must show the amount of wages paid by the employer to the employee or, in the case of withholding pursuant to sections 5250-B and 5255-B, the total items of income that were subject to withholding, the amount deducted and withheld as tax and such other information as the assessor requires.
Sec. 10. 36 MRSA §6901, sub-§2, as amended by PL 2011, c. 240, §45 and affected by §47, is further amended to read:
Sec. 11. Retroactive application. That section of this Act that amends the Maine Revised Statutes, Title 25, section 2399, 2nd paragraph applies retroactively to the fire risk allocation determination required for tax periods beginning on or after January 1, 2014.
SUMMARY
This bill makes the following changes to the tax laws.
It clarifies that the State Tax Assessor is allowed to review veterans' property tax exemption applications on file at the municipal assessor's office in order to determine that exemptions have been properly allowed and to be able to determine the amount of reimbursement a municipality is entitled to receive.
It clarifies that the term "tangible personal property" includes any product transferred electronically as that term is defined in Maine sales and use tax law.
It clarifies sales and use tax seller registration law as it relates to persons presumptively required to register.
It clarifies that the updated allocation rates for the fire investigation and prevention tax apply for 5 years following the year of determination. The Department of Professional and Financial Regulation, Bureau of Insurance is required to make the determination every 5 years. The first such determination occurred in 2013 and applies to the subsequent 5 years.
It corrects an erroneous reference to the United States Internal Revenue Code of 1986, as amended, and an erroneous date reference.
It clarifies that benefits paid under a military retirement plan are retirement plan benefits for purposes of modifying federal adjusted gross income.
It corrects an oversight relating to the recapture of bonus depreciation add-back modifications. In 2006, the Second Regular Session of the 122nd Legislature enacted the Maine Revised Statutes, Title 36, section 5122, subsection 2, paragraph X to allow shareholders of an electing S corporation to recapture the bonus depreciation add-back claimed by the entity as a C corporation under Title 36, section 5200-A, subsection 1, paragraph N. The Federal Government extended the bonus depreciation deduction for tax years beginning in 2011, 2012 and 2013. Maine has not conformed to those provisions but allows the recapture of the add-back modifications in years subsequent to the year of the add-back. However, Title 36, section 5122, subsection 2, paragraph X has not been updated to allow shareholders of electing S corporations to recapture the add-back amounts required of C corporations in those years; this bill corrects the oversight. Maine law provides similar treatment for electing S corporation shareholders with respect to the recapture of disallowed net operating loss carry-back deductions.
It authorizes the State Tax Assessor to establish an alternative due date for an information statement with respect to tax withholding as long as the date established by the assessor is consistent with the due date of the related federal statement. This authorization is needed because some federal information statements affecting the Maine filing requirement have due dates occurring after January 31st. Current Maine law requires that all Maine information statements be provided no later than January 31st.
It clarifies that the payments other than wages that qualify for the visual media production reimbursement do not need to be subject to withholding in order to qualify for the reimbursement.