An Act To Simplify the Tax Code

Sec. 1. 36 MRSA §1752, sub-§17-B,  as amended by PL 2011, c. 684, §2 and affected by §3, is repealed and the following enacted in its place:

Sec. 2. 36 MRSA §1760,  as amended by PL 2011, c. 501, §1, c. 542, Pt. A, §135, c. 548, §§15 and 16, c. 622, §2 and c. 655, Pt. PP, §3 and affected by §4; amended by c. 657, Pt. N, §1 and affected by §3; amended by c. 657, Pt. W, §6, c. 670, §1 and c. 673, §1; and corrected by RR 2011, c. 2, §40, is repealed.

Sec. 3. 36 MRSA §1760-C,  as amended by PL 2007, c. 437, §11, is repealed.

Sec. 4. 36 MRSA §1760-D,  as amended by PL 2011, c. 285, §6 and affected by §15, is repealed.

Sec. 5. 36 MRSA §1764,  as amended by PL 2011, c. 548, §17, is repealed.

Sec. 6. 36 MRSA §1861,  as amended by PL 1995, c. 640, §6, is further amended to read:

§ 1861. Imposition

A tax is imposed, at the respective rate provided in section 1811, on the storage, use or other consumption in this State of tangible personal property or a taxable service , the sale of which would be subject to tax under section 1764 or 1811. Every person so storing, using or otherwise consuming is liable for the tax until the person has paid the tax or has taken a receipt from the seller, as duly authorized by the assessor, showing that the seller has collected the sales or use tax, in which case the seller is liable for it. Retailers registered under section 1754-B or 1756 shall collect the tax and make remittance to the assessor. The amount of the tax payable by the purchaser is that provided in the case of sales taxes by section 1812. When tangible personal property purchased for resale is withdrawn from inventory by the retailer for the retailer's own use, use tax liability accrues at the date of withdrawal.

Sec. 7. 36 MRSA §1861-A,  as amended by PL 2007, c. 240, Pt. W, §1 and affected by §2, is repealed and the following enacted in its place:

§ 1861-A.  Reporting use tax

The assessor shall require that individuals report use tax in accordance with section 1951-A. Taxpayers shall attest to the amount of their use tax liability for the period of the tax return.

Sec. 8. 36 MRSA §1864,  as enacted by PL 2001, c. 439, Pt. II, §1 and affected by §2, is repealed.

Sec. 9. 36 MRSA §1951-A, sub-§3,  as amended by PL 2011, c. 285, §7, is repealed.

Sec. 10. 36 MRSA §2011, first ¶,  as amended by PL 2005, c. 218, §29, is further amended to read:

If the State Tax Assessor determines, upon written application by a taxpayer or during the course of an audit, that any tax under this Part has been paid more than once or has been erroneously or illegally collected or computed, the assessor shall certify to the State Controller the amount paid in excess of that legally due. That amount must be credited by the assessor on any taxes then due from the taxpayer and the balance refunded to the taxpayer or the taxpayer's successor in interest, but no such credit or refund may be allowed unless within 3 years from the date of overpayment either a written petition stating the grounds upon which the refund or credit is claimed is filed with the assessor or the overpayment is discovered on audit. Interest at the rate determined pursuant to section 186 must be paid on any balance refunded pursuant to this chapter from the date the return listing the overpayment was filed or the date the payment was made, whichever is later, except that no interest may be paid with respect to the refunds provided by section 2013 and, in cases of excessive or erroneous collections, interest must be paid in accordance with section 1814, subsection 3. At the election of the assessor, unless the taxpayer specifically requests a cash refund, the refund may be credited to the taxpayer's sales and use tax account, but, in the case of a credit no further interest may accrue from the date of that election. The taxpayer may not apply for a refund of any amount assessed when administrative and judicial review under section 151 has been completed.

Sec. 11. 36 MRSA §2011-A  is enacted to read:

§ 2011-A.  Refund of sales tax on grocery staples

An individual with a federal adjusted gross income of $20,000 or less may request a refund of sales tax paid under this Part on the purchase of grocery staples in accordance with section 2011.

Sec. 12. 36 MRSA §2013,  as corrected by RR 2011, c. 2, §41, is repealed.

Sec. 13. 36 MRSA §2014,  as enacted by PL 1983, c. 560, §§4 and 6, is repealed.

Sec. 14. 36 MRSA §2016,  as amended by PL 2011, c. 655, Pt. L, §3, is repealed.

Sec. 15. 36 MRSA §2017,  as amended by PL 2007, c. 693, §§17 to 21 and affected by §37, is repealed.

Sec. 16. 36 MRSA §2019,  as enacted by PL 2007, c. 658, §3, is repealed.

Sec. 17. 36 MRSA §2020,  as enacted by PL 2011, c. 425, §1 and affected by §3, is repealed.

Sec. 18. 36 MRSA Pt. 8,   as amended, is repealed.

Sec. 19. Implementation of sales tax changes and the repeal of the individual income tax. No later than January 1, 2014, the Department of Administrative and Financial Services, Bureau of Revenue Services shall submit a report to the Joint Standing Committee on Taxation that provides a plan to implement the sales tax changes and the repeal of the income tax described in this Act including a timeline, cost analysis and statutory changes. The joint standing committee may report out a bill to the Second Regular Session of the 126th Legislature based on the report.

Sec. 20. Application. This Act applies to tax years beginning on or after January 1, 2015.

Sec. 21. Revisor's review; cross-references. The Revisor of Statutes shall review the Maine Revised Statutes and include in the errors and inconsistencies bill submitted to the Second Regular Session of the 126th Legislature pursuant to Title 1, section 94 any sections necessary to correct and update any cross-references in the statutes to provisions of law repealed in this Act.

Sec. 22. Effective date. This Act takes effect January 1, 2015.

summary

This bill repeals, for tax years beginning on or after January 1, 2015, the state income tax and broadens the sales tax to include the end use of all items, products and services, including Internet sales. It repeals all sales tax exemptions. It provides a sales tax reimbursement for sales of grocery staples to persons with incomes less than $20,000. It requires the Department of Administrative and Financial Services, Bureau of Revenue Services to submit a report to the Joint Standing Committee on Taxation that provides a plan to implement the sales tax changes and the repeal of the income tax including a timeline, cost analysis and statutory changes. It authorizes the joint standing committee to report out a bill to the Second Regular Session of the 126th Legislature based on the report.