CHAPTER 688
H.P. 1516 - L.D. 2020
An Act to Promote the Fiscal Sustainability of the Highway Fund
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 36 MRSA §2903, sub-§1, as amended by PL 1999, c. 473, Pt. B, §1 and affected by §5, is further amended to read:
1. Excise tax imposed. An excise tax is imposed on internal combustion engine fuel used or sold within this State, including sales to the State or a political subdivision of the State, at the rate of 22¢ per gallon, except that the rate is 3.4¢ per gallon on internal combustion engine fuel, as defined in section 2902, bought or used for the purpose of propelling jet or turbojet engine aircraft. The tax rate provided by this section is subject to annual inflation adjustment pursuant to section 3321 except with respect to the tax imposed upon fuel bought or used for the purpose of propelling jet or turbojet engine aircraft.
Sec. 2. 36 MRSA §2903, sub-§1-B, as enacted by PL 1999, c. 473, Pt. B, §2, is repealed.
Sec. 3. 36 MRSA §2903, sub-§1-C is enacted to read:
1-C. Inventory tax. On the date that any increase in the rate of tax imposed under this chapter takes effect, an inventory tax is imposed by this subsection upon all internal combustion engine fuel that is held in inventory by a distributor or retail dealer as of the end of the day prior to that date with respect to which the tax imposed pursuant to subsection 1 has been paid. The inventory tax is computed by multiplying the number of gallons of tax-paid fuel held in inventory by the difference between the tax rate already paid and the new tax rate. Distributors and retail dealers that hold such tax-paid inventory shall make payment of the inventory tax on or before the 15th day of the next calendar month, accompanied by a form prescribed and furnished by the State Tax Assessor. In the event of a decrease in the tax rate, the distributor or retail dealer is entitled to a refund or credit, which must be claimed on a form designed and furnished by the assessor. This section does not apply to internal combustion engine fuel purchased or used for the purpose of propelling jet or turbojet engine aircraft.
Sec. 4. 36 MRSA §2916, as enacted by PL 1987, c. 793, Pt. A, §11, is repealed.
Sec. 5. 36 MRSA §3203, sub-§1, as amended by PL 2001, c. 396, §28, is further amended to read:
1. Generally. Except as provided in section 3204-A, an excise tax is levied and imposed on all suppliers of distillates sold, on all retailers of low-energy fuel sold and on all users of special fuel used in this State for each gallon of distillate at the rate of 23¢ per gallon and for each gallon of low-energy fuel based on the British Thermal Unit, referred to in this subsection as "BTU," energy content for each fuel as compared to gasoline. In the case of distillates, the tax rate provided by this section is subject to annual inflation adjustment pursuant to section 3321. These Applicable BTU values are as follows.
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Sec. 6. 36 MRSA §3203-B, as enacted by PL 1999, c. 473, Pt. B, §4, is repealed.
Sec. 7. 36 MRSA §3203-C is enacted to read:
On the date that any increase in the rate of tax imposed under this chapter takes effect, an inventory tax is imposed upon all distillates that are held in inventory by a distributor or retail dealer as of the end of the day prior to that date on which the tax imposed by section 3203, subsection 1 has been paid. The inventory tax is computed by multiplying the number of gallons of tax-paid fuel held in inventory by the difference between the tax rate already paid and the new tax rate. Distributors and retail dealers that hold such tax-paid inventory shall make payment of the inventory tax on or before the 15th day of the next calendar month, accompanied by a form prescribed and furnished by the State Tax Assessor. In the event of a decrease in the tax rate, the distributor or retail dealer is entitled to a refund or credit, which must be claimed on a form designed and furnished by the assessor.
Sec. 8. 36 MRSA c. 465 is enacted to read:
CHAPTER 465
INDEXING OF MOTOR FUEL TAX RATES
§3321. Annual adjustment of tax rates
1. Generally. Beginning in 2003, and each calendar year thereafter, the excise tax imposed upon internal combustion engine fuel pursuant to section 2903, subsection 1 and the excise tax imposed upon distillates pursuant to section 3203, subsection 1 are subject to an annual rate of adjustment pursuant to this section. On or about February 15th of each year, the State Tax Assessor shall calculate the adjusted rates by multiplying the rates in effect on the calculation date by an inflation index as computed in subsection 2. The adjusted rates must then be rounded to the nearest 1/10 of a cent and become effective on the first day of July immediately following the calculation. The assessor shall publish the annually adjusted fuel tax rates and shall provide all necessary forms and reports to suppliers, distributors and retail dealers.
2. Method of calculation; inflation index defined. The inflation index for 2003 is 1.118, representing annual inflation adjustments for the years 1999 to 2002, inclusive. Starting in 2004 and every year thereafter, the inflation index is the Consumer Price Index as defined in section 5402, subsection 1 for the calendar year ending on the December 31st immediately preceding the calculation date, divided by the Consumer Price Index for the prior calendar year.
3. Exclusion. This section does not apply to internal combustion engine fuel purchased or used for the purpose of propelling jet or turbojet engine aircraft.
4. Legislative review. Starting in 2003 and each odd-numbered year thereafter, the Department of Transportation shall submit a bill by the cloture date established for departments and agencies that repeals any adjustment in fuel tax rates in the upcoming biennium resulting from the operation of this section.
Sec. 9. Appropriations and allocations. The following appropriations and allocations are made.
ADMINISTRATIVE AND FINANCIAL
SERVICES, DEPARTMENT OF
Bureau of Revenue Services
Initiative: Provides funds on a one-time basis for computer programming and on an on-going basis for forms printing and processing associated with certain changes in Highway Fund revenues.
General Fund 2001-02 2002-03
All Other $0 $16,655
Effective July 25, 2002, unless otherwise indicated.
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