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LD1602 • 2025

An Act to Remove the Exemption from Sales and Use Tax for Automobiles Purchased for Use as Rentals

An Act to Remove the Exemption from Sales and Use Tax for Automobiles Purchased for Use as Rentals

Taxes
Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor
Senator Michael Tipping
Last action
2025-05-06
Official status
Pursuant to Joint Rule 310.3 Placed in Legislative Files (DEAD)
Effective date
Not listed

Plain English Breakdown

Using official source text because the generated explanation was unavailable or could not be confirmed against the official bill text.

An Act to Remove the Exemption from Sales and Use Tax for Automobiles Purchased for Use as Rentals

An Act to Remove the Exemption from Sales and Use Tax for Automobiles Purchased for Use as Rentals Sponsor: Senator Michael Tipping Reference committee: Taxation Latest committee action: Reported Out; ONTP

What This Bill Does

  • An Act to Remove the Exemption from Sales and Use Tax for Automobiles Purchased for Use as Rentals Sponsor: Senator Michael Tipping Reference committee: Taxation Latest committee action: Reported Out; ONTP

Limits and Unknowns

  • This entry is temporarily using official source text because the generated explanation could not be confirmed against the official bill text during the last sync.

Bill History

  1. 2025-05-06 Senate

    Pursuant to Joint Rule 310.3 Placed in Legislative Files (DEAD)

  2. 2025-04-30 Committee

    Reported Out; ONTP

  3. 2025-04-23 Committee

    Work Session Held

  4. 2025-04-23 Committee

    Voted; ONTP

  5. 2025-04-10 House

    The Bill was REFERRED to the Committee on TAXATION . In concurrence. ORDERED SENT FORTHWITH.

  6. 2025-04-10 Committee

    Referred to Committee on Taxation.

Official Summary Text

An Act to Remove the Exemption from Sales and Use Tax for Automobiles Purchased for Use as Rentals
Sponsor:
Senator Michael Tipping
Reference committee:
Taxation
Latest committee action:
Reported Out; ONTP

Current Bill Text

Read the full stored bill text 
Printed on recycled paper
132nd MAINE LEGISLATURE
FIRST SPECIAL SESSION-2025
Legislative Document No. 1602
S.P. 639 In Senate, April 10, 2025
An Act to Remove the Exemption from Sales and Use Tax for
Automobiles Purchased for Use as Rentals
Reference to the Committee on Taxation suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator TIPPING of Penobscot.
Cosponsored by Senator: TALBOT ROSS of Cumberland, Representatives: MATLACK of St.
George, RANA of Bangor.

Page 1 - 132LR2357(01)
1Be it enacted by the People of the State of Maine as follows:
2Sec. 1. 36 MRSA §1752, sub-§11, ¶A, as amended by PL 2007, c. 437, §10, is
3 further amended by amending subparagraph (3) to read:
4 (3) A sale in the ordinary course of business by a retailer to a purchaser who is not
5 engaged in selling that kind of tangible personal property or taxable service in the
6 ordinary course of repeated and successive transactions of like character; and
7Sec. 2. 36 MRSA §1752, sub-§11, ¶A, as amended by PL 2007, c. 437, §10, is
8 further amended by amending subparagraph (4) to read:
9 (4) The sale or liquidation of a business or the sale of substantially all of the assets
10 of a business, to the extent that the seller purchased the assets of the business for
11 resale, lease or rental in the ordinary course of business, except when:
12 (a) The sale is to an affiliated entity and the transferee, or ultimate transferee
13 in a series of transactions among affiliated entities, purchases the assets for
14 resale, lease or rental in the ordinary course of business; or
15 (b) The sale is to a person that purchases the assets for resale, lease or rental
16 in the ordinary course of business or that purchases the assets for transfer to an
17 affiliate, directly or through a series of transactions among affiliated entities,
18 for resale, lease or rental by the affiliate in the ordinary course of business.
19 For purposes of this subparagraph, "affiliate" or "affiliated" includes both direct
20 and indirect affiliates. ; and
21Sec. 3. 36 MRSA §1752, sub-§11, ¶A, as amended by PL 2007, c. 437, §10, is
22 further amended by enacting a new subparagraph (5) to read:
23 (5) The sale, to a person engaged in the business of renting automobiles, of
24 automobiles, integral parts of automobiles or accessories to automobiles for rental
25 or for use in an automobile rented for a period of less than one year.
26Sec. 4. Application. This Act applies to sales occurring on or after January 1, 2026.
27SUMMARY
28 Under current law, the sale of an automobile to a person in the business of renting
29 automobiles for a period of less than one year is not taxed; instead, the lease of the vehicle
30 to a consumer is taxed at the rate of 10%.
31 This bill requires a person purchasing an automobile for the purpose of renting the
32 automobile for less than one year to pay a sales and use tax of 5.5%. The lease of the
33 vehicle to a consumer continues to be taxed at 10%.
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