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The Governor of Maine has signed a bill that amends the definition of “sales price” to exclude the price received for labor or services used in installing, applying, or repairing the property sold, as long as the price is separately stated. This will not take effect, however, if the 2009 tax reform legislation is rejected by voters at the June 8, 2010 election. If the change is approved, it will apply retroactively beginning January 1, 2009. Additionally, any amount charged for the disposal of used tires is removed from the definition of “sales price” retroactively, effective January 1, 2009, regardless of the outcome of the election. (L.D. 1540 (H.P. 1084), Laws 2010, effective 90 days from the adjournment of the Second Regular Session and applicable as noted)


Maine has announced two tax amnesty initiatives that will run from September 1, 2010 through November 30, 2010. Under the “short-term initiative” 95% of penalties will be waived on taxes assessed as of December 31, 2009. Under the “five-year initiative”, 95% of penalties and interest will be waived on taxes assessed as of June 30, 2005. Participation in the initiatives is conditioned upon the taxpayer’s agreement to forgo or withdraw a protest, administrative or judicial proceeding, or refund claim relating to liabilities paid under the initiatives. Additionally, to be eligible, a tax payer must properly complete a file a 2010 tax initiative application, pay all tax, interest, and penalties, and not have criminal action or collection by warrant or civil action pending. (L.D. 1671 (H.P. 1183), Laws 2010, effective March 31, 2010)


Maine legislation has reinstated the nonprofit requirement for a snowmobile club to qualify for the sales and use tax exemption for purchases of snowmobile trail grooming equipment used directly and exclusively for the grooming of snowmobile trails. When originally introduced, the bill removed the nonprofit requirement. However, as amended and enacted, to be eligible for the exemption, snowmobile clubs must be incorporated under the Maine Nonprofit Corporation Act (L.D. 1637 (H.P. 1165), Laws 2010, effective 90 days from adjournment of the Second Regular Session).


Maine Revenue Services has issued an information bulletin announcing the application of sales and use tax on certain specified services beginning January 1, 2010. Sales and use tax will now apply to certain amusement, entertainment, and recreations services such as admission fees to entertainment venues and performances. In addition, sales and use tax will apply to the following types of services: Installation, repair, and maintenance services; personal property services; and transportation and courier services. For further information, see General Information Bulletin No. 99. (General Information Bulletin No. 99, Maine Revenue Services, September 12, 2009, effective as noted)


While photographers and photofinishers are subject to the sales and use tax when producing and selling tangible personal property, revisions made by the Maine Revenue Services indicate that they are subject to a service provider tax that applies to any sale of fabrication services. Fabrication services are production activities that transform tangible personal property provided by the customer into a different form, character, or composition. The revision states that if the customer takes delivery in Maine, sales tax must be charged. This rule also applies to digital products sent electronically. Also included were exemptions for purchases of machinery, equipment, and tangible personal property that are used in the production of tangible personal property for later sale or lease. (Sales and Use Tax Instructional Bulletin No. 3, Maine Revenue Services, July 28, 2008)



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