Sec. 1. 36 MRSA §1760, sub-§84 is enacted to read:

84.__Deposits on automotive cores.__An amount held by a retailer for the return of an automotive core.__The amount held by the retailer is considered a deposit for purposes of this subsection.__For purposes of this subsection, "automotive core" means a component of a part of an automobile that, when returned to a retailer of automobile parts, may be refurbished and reused for the same purpose.

SUMMARY

Currently, a person purchasing an automobile part, such as a battery or starter, pays the purchase price plus an amount held by the retailer for the return of the core of that automobile part. The amount held to ensure the return is taxed under current law because it is considered a trade-in and not a deposit, so that when the person returns the automotive core, the amount is returned, less the sales tax levied on the amount held by the retailer.

This bill exempts from the sales tax the amount held by the retailer for the return of the automotive core and specifically requires the amount to be treated as a deposit, thus exempt from the sales tax.