Maine – Guidance Issued on Recent Legislative Changes

SALT Report 2940 – Maine Revenue Services issued a bulletin that discusses recent legislative changes to certain sales and services, sales and use tax exemptions, and the State’s registration requirements.

New Taxable Sales and Services

Group Residential Services for persons with Brain Injuries

Effective June 26, 2013, group residential services such as, direct assistance with eating, bathing, dressing, personal hygiene, and other daily living activities that are provided to persons and adults with acquired brain injuries by a designated agency under contract with the Department of Health and Human Services, are subject to the Service Provider Tax.

Repealed Exemptions

Regularly Issued Publications

Effective October 1, 2013, the sales tax exemption for publications issued at regular intervals is repealed. On that date, sales of these publications will become subject to a 5.5% sales tax, regardless of the method of delivery.  This includes those purchased at a retail location, home delivered, or delivered electronically to customers.

New Exemptions

Nonprofit Free Public Lending Libraries

Effective October 9, 2013, sales by nonprofit free public lending libraries that are funded in part or whole by the State, or a Maine political subdivision, or the federal government are exempt. Sales by a nonprofit corporation are also exempt so long as the proceeds from the sales are used to benefit the library.

Revised Exemptions

Aircraft and Aircraft Parts

The exemption for the sale, use, or lease of aircraft, and sales of repair and replacement parts used exclusively in an aircraft has been extended from June 30, 2015, to June 30, 2033.

Casual Sale Exception

Effective October 9, 2013, tax is imposed on the casual sale of trailers, truck campers, motor vehicles, special mobile equipment, watercraft, and aircraft. However, these transactions are exempt if the transfer is to a corporation, partnership, limited liability company, or limited liability partnership and the seller owns at least 50% of the common stock of the corporation or, at least 50% of the ownership interests in the partnership, limited liability company, or limited liability partnership. Prior to the revision, this type of transfer required a majority ownership to be exempt.

Other Legislative Changes

Products Transferred Electronically

Effective June 26, 2013, products that are transferred electronically are subject to sales tax. The amendment clarifies the Department’s position that a product is subject to sales tax, whether provided to the customer in a tangible or electronic form; for example, music, books, and movies.

Initiators of Deposit

Small manufacturers who bottle, can, or place beverages in containers for sale to a distributor or dealer are exempt from the Initiator of Deposit unclaimed deposits requirement if they produce no more than 50,000 gallons of product during that calendar year.

This publication also discusses Maine’s updated registration requirements, the requirements for obtaining a resale certificate, the appeals process, taxpayer confidentiality, and the temporary sales tax increase, which was previously discussed in SALT Report 2911.

For Further Information

Maine Revenue Services – Sales and Use Tax Information Bulletin No. 103