An Act To Permit a Local Option Sales Tax
Sec. 1. 36 MRSA §1817 is enacted to read:
§ 1817. Municipal local option sales tax
Of the net amount certified under this subsection, the Treasurer of State shall make monthly payments as follows:
For purposes of this subsection, "costs of administering this section" means the lesser of the actual cost to the assessor of administering this section and 2% of the total revenue generated by local option sales taxes.
(1) Fund a municipal property tax assistance program established within the participating municipality pursuant to chapter 907-A;
(2) Fund that portion of the participating municipality's approved homestead exemptions under chapter 105, subchapter 4-B not recovered from the State pursuant to section 685, subsection 2; or
(3) Stabilize or lower the projected property tax rate of the participating municipality.
The petition process and voting must be held and conducted in accordance with Title 30-A, sections 2528, 2529 and 2532 even if the municipality has not accepted the provisions of Title 30-A, section 2528. The voting at elections must be held and conducted in accordance with Title 21-A.
The municipal clerk shall make a return of the results, certify the results and send them to the Secretary of State. The Secretary of State shall forward the results to the assessor.
The local option sales tax may be discontinued by referendum conducted in the same manner as the referendum adopting the tax under this section.
This bill allows a municipality to impose a local option sales tax of 3% or less by local referendum. Revenue from the local option sales tax is distributed as follows: 50% to the municipality, 25% to the county in which the municipality is located and 25% to the General Fund. The revenue received by the municipality and county must be used to reduce the property tax, either through specific programs, such as by funding a municipal property tax assistance program or funding the portion of the homestead property tax exemptions not funded by the State or generally stabilizing or lowering the projected property tax rate of the municipality or the county tax assessment.