APPROVED CHAPTER
APRIL 26, 2024 673
BY GOVERNOR PUBLIC LAW
STATE OF MAINE
_____
IN THE YEAR OF OUR LORD
TWO THOUSAND TWENTY-FOUR
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H.P. 1278 - L.D. 2000
An Act to Change the Taxation of Rental Tangible Personal Property to
Make It Consistent with the Predominant Method in Other States' Rental
Industry Laws for Sales and Use Tax
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 23 MRSA §4210-B, sub-§7-A, as amended by PL 2023, c. 360, Pt. C, §1,
is further amended to read:
7-A. Sales tax revenue. On July 1st of each year, the State Controller shall transfer
to the Multimodal Transportation Fund an amount, as certified by the State Tax Assessor,
that is equivalent to 100% of the revenue from the tax imposed on the value of rental of a
truck or van with a gross weight of less than 26,000 pounds rented from a person primarily
engaged in the business of renting automobiles and the value of rental for a period of less
than one year of an automobile pursuant to Title 36, section 1811 for the first 6 months of
the prior fiscal year after the reduction for the transfer to the Local Government Fund as
described by Title 30‑A, section 5681, subsection 5 and the transfer to the ATV
Recreational Management Fund pursuant to Title 36, section 1820. On October 1st of each
year, the State Controller shall transfer to the Multimodal Transportation Fund an amount,
as certified by the State Tax Assessor, that is equivalent to 100% of the revenue from the
tax imposed on the value of rental of a truck or van with a gross weight of less than 26,000
pounds rented from a person primarily engaged in the business of renting automobiles and
the value of rental for a period of less than one year of an automobile pursuant to Title 36,
section 1811 for the last 6 months of the prior fiscal year after the reduction for the transfer
to the Local Government Fund as described by Title 30‑A, section 5681, subsection 5 and
the transfer to the ATV Recreational Management Fund pursuant to Title 36, section 1820.
The tax amount must be based on actual sales for that fiscal year and may not consider any
accruals that may be required by law.
Sec. 2. 36 MRSA §1752, sub-§5-D is enacted to read:
5-D. Lease or rental. "Lease or rental," "lease" or "rental" means any transfer of
possession or control of tangible personal property for a fixed or indeterminate term for
consideration and may include future options to purchase the property or extend the lease
or rental. "Lease or rental" includes a sublease and subrental.
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"Lease or rental" does not include:
A. Leases and contracts payable by rental or license fees for the right of possession
and use when such leases and contracts are determined by the assessor to be in lieu of
purchase;
B. A transfer of possession or control of property under a security agreement or
deferred payment plan that requires the transfer of title upon completion of the required
payments;
C. Providing tangible personal property along with a person to operate that property,
for a fixed or indeterminate period of time, when that person is necessary for the
tangible personal property to perform as designed and the person does more than
maintain, inspect or set up the tangible personal property; or
D. The lease or rental of property that is subject to the provisions of the service provider
tax imposed pursuant to chapter 358.
The characterization of a transaction as a lease or rental under generally accepted
accounting principles, the Code, the Uniform Commercial Code or other provisions of
federal, state or local law does not affect a determination that a transaction is a lease or
rental under chapters 211 to 225.
Sec. 3. 36 MRSA §1752, sub-§5-E is enacted to read:
5-E. Lessor. "Lessor" means a person who leases or rents tangible personal property
located in this State to another person.
Sec. 4. 36 MRSA §1752, sub-§10, as amended by PL 2019, c. 401, Pt. B, §3, is
further amended to read:
10. Retailer. "Retailer" means a person who makes retail sales or who is required to
register by section 1754‑B or who is registered under section 1756. "Retailer" includes a
lessor.
Sec. 5. 36 MRSA §1752, sub-§11, ¶B, as amended by PL 2021, c. 578, §1, is
further amended by repealing subparagraph (3).
Sec. 6. 36 MRSA §1752, sub-§11, ¶B, as amended by PL 2021, c. 578, §1, is
further amended by repealing subparagraph (3-A).
Sec. 7. 36 MRSA §1752, sub-§11, ¶B, as amended by PL 2021, c. 578, §1, is
further amended by repealing subparagraph (5).
Sec. 8. 36 MRSA §1752, sub-§11, ¶B, as amended by PL 2021, c. 578, §1, is
further amended by amending subparagraph (9) to read:
(9) The sale of automobile repair parts used in the performance of repair services
on an automobile pursuant to an extended service contract sold on or after
September 20, 2007 that entitles the purchaser to specific benefits in the service of
the automobile for a specific duration;
Sec. 9. 36 MRSA §1752, sub-§11, ¶B, as amended by PL 2021, c. 578, §1, is
further amended by amending subparagraph (16) to read:
(16) The sale, to a person engaged in the business of renting or leasing motor
homes, as defined in Title 29‑A, section 101, subsection 40, or camper trailers, of
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 motor homes or camper trailers for rental as tangible personal property but not as
the rental of living quarters; or
Sec. 10. 36 MRSA §1752, sub-§11, ¶B, as amended by PL 2021, c. 578, §1, is
further amended by amending subparagraph (17) to read:
(17) The sale of truck repair parts used in the performance of repair services on a
truck pursuant to an extended service contract that entitles the purchaser to specific
benefits in the service of the truck for a specific duration.; or
Sec. 11. 36 MRSA §1752, sub-§11, ¶B as amended by PL 2021, c. 578, §1, is
further amended by enacting a new subparagraph (18) to read:
(18) The sale or lease or rental to a lessor that has been issued a resale certificate
pursuant to section 1754-B, subsection 2-B or 2-C of tangible personal property
for lease or rental.
Sec. 12. 36 MRSA §1752, sub-§13, as amended by PL 1981, c. 706, §20, is further
amended to read:
13. Sale. "Sale" means any transfer, exchange or barter, in any manner or by any
means whatsoever, for a consideration and includes leases and contracts payable by rental
or license fees for the right of possession and use, but only when such rentals, conditional
sale contracts and any contract under which possession of the property is given to the
purchaser but title is retained by the seller as security for the payment of the purchase price,
and leases and contracts that are deemed determined by the State Tax Assessor assessor to
be in lieu of purchase. Each time period for which a lease or rental payment is charged is
considered a separate sale.
Sec. 13. 36 MRSA §1752, sub-§14, ¶A, as amended by PL 2021, c. 578, §2, is
further amended by amending subparagraph (4) to read:
(4) In the case of the lease or rental for a period of less than one year of an
automobile or of a truck or van with a gross vehicle weight of less than 26,000
pounds rented from a person primarily engaged in the business of renting
automobiles, the value is the total rental charged to the lessee and includes, but is
not limited to, maintenance and service contracts, drop-off or pick-up fees, airport
surcharges, mileage fees and any separately itemized charges on the rental
agreement to recover the owner's estimated costs of the charges imposed by
government authority for title fees, inspection fees, local excise tax and agent fees
on all vehicles in its rental fleet registered in the State. All fees must be disclosed
when an estimated quote is provided to the lessee; and
Sec. 14. 36 MRSA §1752, sub-§14, ¶B, as repealed and replaced by PL 2019, c.
501, §28, is amended by amending subparagraph (2) to read:
(2) Allowances in cash or by credit made upon the return of merchandise or
services rejected pursuant to warranty;
Sec. 15. 36 MRSA §1752, sub-§14, ¶B, as repealed and replaced by PL 2019, c.
501, §28, is amended by amending subparagraph (3) to read:
(3) The price of property returned or services rejected by customers, when the full
price is refunded either in cash or by credit;
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 Sec. 16. 36 MRSA §1752, sub-§14, ¶B, as repealed and replaced by PL 2019, c.
501, §28, is amended by amending subparagraph (12) to read:
(12) Federal universal service support funds that are paid directly to the seller
pursuant to 47 Code of Federal Regulations, Part 54; or
Sec. 17. 36 MRSA §1752, sub-§14, ¶B, as repealed and replaced by PL 2019, c.
501, §28, is amended by amending subparagraph (13) to read:
(13) A paint stewardship assessment imposed pursuant to Title 38, section 2144.;
or
Sec. 18. 36 MRSA §1752, sub-§14, ¶B as repealed and replaced by PL 2019, c.
501, §28, is amended by enacting a new subparagraph (14) to read:
(14) For lease or rental payments, separately stated charges for sales of optional
insurance coverage for the protection of the lessee or of the lessee's personal
property, such as liability insurance, personal accident insurance or personal
effects protection.
Sec. 19. 36 MRSA §1752, sub-§17-B, as amended by PL 2021, c. 578, §3, is
further amended to read:
17-B. Taxable service. "Taxable service" means the rental of living quarters in a
hotel, rooming house or tourist or trailer camp; the transmission and distribution of
electricity; the rental or lease of an automobile, a camper trailer, or a motor home, as
defined in Title 29‑A, section 101, subsection 40; the rental or lease of a truck or van with
a gross vehicle weight of less than 26,000 pounds from a person primarily engaged in the
business of renting automobiles; the sale of an extended service contract on an automobile
or truck that entitles the purchaser to specific benefits in the service of the automobile or
truck for a specific duration; and the sale of prepaid calling service.
Sec. 20. 36 MRSA §1754-B, sub-§1-B, ¶A, as repealed and replaced by PL 2021,
c. 181, Pt. B, §5, is amended by amending subparagraph (3) to read:
(3) Every lessor engaged in the leasing of tangible personal property located in
this State that does not maintain a place of business in this State but makes retail
sales to purchasers from in this State;
Sec. 21. 36 MRSA §1758, as repealed and replaced by PL 1999, c. 708, §24, is
repealed.
Sec. 22. 36 MRSA §1811, sub-§1, ¶D, as amended by PL 2021, c. 578, §4; c. 658,
§286; and c. 669, §5, is further amended by amending subparagraph (4) to read:
(4) Ten percent on the value of rental for a period of less than one year of:
(a) An automobile; or
(b) A truck or van with a gross vehicle weight of less than 26,000 pounds
rented from a person primarily engaged in the business of renting automobiles;
or
(c) A loaner vehicle that is provided other than to a motor vehicle dealer's
service customers pursuant to a manufacturer's or dealer's warranty; and
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 Sec. 23. 36 MRSA §1819, sub-§2, as amended by PL 2021, c. 181, Pt. B, §6, is
further amended to read:
2. Sourcing for sales of tangible personal property and taxable services; generally.
The sale of tangible personal property or a taxable service is sourced in this State pursuant
to this subsection. Except as provided in subsections 3 to 5, the provisions of this
subsection do not apply to the lease or rental of tangible personal property.
A. When the tangible personal property or taxable service is received by the purchaser
at a business location of the seller, the sale is sourced to that business location.
B. When the tangible personal property or taxable service is not received by the
purchaser at a business location of the seller, the sale is sourced to the location where
receipt by the purchaser or the purchaser's donee occurs, including the location
indicated by instructions for delivery to the purchaser or donee known to the seller.
C. For a sale when paragraphs A and B do not apply, the sale is sourced to the location
indicated by an address for the purchaser that is available from the business records of
the seller that are maintained in the ordinary course of the seller's business when use of
this address does not constitute bad faith.
D. For a sale when paragraphs A to C do not apply, the sale is sourced to the location
indicated by an address for the purchaser obtained during the consummation of the
sale, including the address of a purchaser's payment instrument, if no other address is
available, when use of this address does not constitute bad faith.
E. When paragraphs A to D do not apply, including the circumstance in which the
seller is without sufficient information to apply paragraphs A to D, the location is
determined by the address from which tangible personal property was shipped, from
which the tangible personal property or taxable service transferred electronically was
first available for transmission by the seller or from which the service was provided,
disregarding for these purposes any location that merely provided the digital transfer
of the tangible personal property or taxable service sold.
Sec. 24. 36 MRSA §1819, sub-§3 is enacted to read:
3. Sourcing for leases or rentals of tangible personal property. The lease or rental
of tangible personal property, other than property identified in subsection 4 or 5, is sourced
pursuant to this subsection.
A. For a lease or rental that requires recurring periodic payments, the first periodic
payment is sourced to this State in the same manner as a sale of tangible personal
property in accordance with subsection 2. Periodic payments made subsequent to the
first payment are sourced to the primary property location for each time period covered
by the payment. For the purposes of this paragraph, "the primary property location" is
an address for the property provided by the lessee that is available to the lessor from
its records and maintained in the ordinary course of business, when use of this address
does not constitute bad faith. The primary property location is not altered by
intermittent use at different locations, such as use of business property that
accompanies employees on business trips and service calls.
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 B. For a lease or rental that does not require recurring periodic payments, the payment
is sourced to this State in the same manner as a sale of tangible personal property in
accordance with subsection 2.
This subsection does not affect the imposition or computation of sales or use tax on leases
or rentals, based on a lump sum payment or on the basis of accelerated payment, or on the
acquisition of property for lease.
Sec. 25. 36 MRSA §1819, sub-§4 is enacted to read:
4. Motor vehicles, trailers, semitrailers, truck campers or aircraft. The lease or
rental of motor vehicles, trailers, semitrailers, truck campers or aircraft that do not qualify
as transportation equipment, as defined in subsection 5, is sourced pursuant to this
subsection.
A. For a lease or rental that requires recurring periodic payments, each periodic
payment is sourced to the primary property location. The primary property location is
as indicated by an address for the property provided by the lessee that is available to
the lessor from its records maintained in the ordinary course of business, when use of
this address does not constitute bad faith. This location is not altered by intermittent
use at different locations.
B. For a lease or rental that does not require recurring periodic payments, the payment
is sourced to the State in the same manner as a sale of tangible personal property in
accordance with the provisions of subsection 2.
This subsection does not affect the imposition or computation of sales or use tax on leases
or rentals, based on a lump sum payment or on the basis of accelerated payment, or on the
acquisition of property for lease.
Sec. 26. 36 MRSA §1819, sub-§5 is enacted to read:
5. Transportation equipment. The sale, including lease or rental, of transportation
equipment is sourced to the State in the same manner as a sale of tangible personal property
in accordance with the provisions of subsection 2. For the purposes of this subsection,
"transportation equipment" means:
A. Locomotives and railcars that are used for the carriage of persons or property in
interstate commerce;
B. Trucks and truck tractors with a gross vehicle weight rating greater than 10,000
pounds and trailers, semitrailers or passenger buses that are:
(1) Registered through the International Registration Plan; and
(2) Operated under authority of a carrier authorized and certificated by the United
States Department of Transportation or another federal authority to engage in the
carriage of persons or property in interstate commerce;
C. Aircraft that are operated by air carriers authorized and certificated by the United
States Department of Transportation, another federal authority or a foreign authority to
engage in the carriage of persons or property in interstate or foreign c