Sec. 1. 36 MRSA §5250, sub-§1, as amended by PL 1987, c. 504, §37, is further amended to read:

1. General. Every employer maintaining an office or transacting business within this State and making payment of any wages taxable under this part Part to a resident or nonresident individual shall, if required to withhold federal income tax from such wages, deduct and withhold from such wages for each payroll period a tax computed in such manner as to result, so far as practicable, in withholding from the employee's wages during each calendar year an amount substantially equivalent to the tax reasonably estimated to be due from the employee under this part Part with respect to the amount of such wages included in his the employee's adjusted gross income during the calendar year. The method of determining the amount to be withheld shall must be prescribed by regulations of the assessor. The assessor shall use the same criteria for determining whether an individual is an employee or an independent contractor as is used by the federal Internal Revenue Service. This section shall does not apply to shares of a lobster boat's catch apportioned by a lobster boat operator to a sternman. This section does not apply to wages from which a tax is required to be deducted and withheld under the Code, Sections 1441 and 1442.

SUMMARY

This bill clarifies that the State must use the same criteria for determining status as an employee or independent contractor as is used by the federal Internal Revenue Service.