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132nd MAINE LEGISLATURE
FIRST SPECIAL SESSION-2025
Legislative Document No. 1869
S.P. 739 In Senate, May 5, 2025
An Act to Lower Property Taxes by Allowing a Local Option Sales
Tax on Recreational Cannabis Sales
Received by the Secretary of the Senate on May 1, 2025. Referred to the Committee on
Taxation pursuant to Joint Rule 308.2 and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator NANGLE of Cumberland.
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1Be it enacted by the People of the State of Maine as follows:
2Sec. 1. 28-B MRSA §407 is enacted to read:
3§407. Municipal tax collection
41. Municipal sales tax. The municipality in which a cannabis establishment has been
5 located pursuant to this Title may collect a sales tax on retail sales transactions conducted
6 at that establishment pursuant to Title 36, section 1818-A.
72. Unorganized and deorganized areas. For purposes of sales tax collected pursuant
8 to this section, retail sales transactions at cannabis establishments in unorganized and
9 deorganized areas are deemed to occur in municipalities.
10Sec. 2. 36 MRSA §1818-A is enacted to read:
11§1818-A. Local sales tax option on adult use cannabis and adult use cannabis
12products
131. Definitions. As used in this section, unless the context otherwise indicates, the
14 following terms have the following meanings.
15 A. "Cannabis product" means adult use cannabis and an adult use cannabis product as
16 defined in Title 28-B, section 102-A, subsections 1 and 2, respectively.
17 B. "Local option sales tax" means a sales tax imposed pursuant to subsection 2.
18 C. "Participating municipality" means a municipality that has imposed a local option
19 sales tax pursuant to this section.
202. Authorization to impose local option sales tax. A municipality by referendum
21 conducted pursuant to subsection 8 may impose a local option sales tax of no more than
22 1% on cannabis products. A municipality that adopts a local option sales tax pursuant to
23 this section may not alter the range of items subject to sales tax under this Part.
243. Notify State Tax Assessor. A municipality that imposes a local option sales tax
25 under subsection 2 shall notify the assessor at least 90 days before the local option sales
26 tax is effective.
274. Administration. Retailers in a participating municipality shall transfer the revenue
28 from the local option sales tax at the time and in the manner provided in section 1951-A
29 for the transfer of state sales tax revenue. The tax is subject to the same enforcement
30 provisions, interest, penalties and administrative actions as other taxes assessed under this
31 Part.
325. Distribution of revenue. Each month, the assessor shall identify the amount of
33 revenue attributable to each participating municipality under this section, subtract the costs
34 of administering this section and certify the net amount for that participating municipality
35 to the Treasurer of State. The Treasurer of State shall make monthly payments to municipal
36 treasurers of the net amounts certified by the assessor under this subsection.
37 For purposes of this subsection, "costs of administering this section" means the lesser of
38 the actual cost incurred by the assessor in administering this section and 2% of the total
39 revenue generated by municipalities that impose a local option sales tax.
406. Use of revenue by participating municipality. The revenue raised by the
41 imposition of a local option sales tax under this section must be held by the participating
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42 municipality in a special revenue account established for that purpose. Revenue from that
43 account may be expended only for public safety and education initiatives.
37. Effect on revenue sharing and other state aid programs. Revenue received by
4 the State pursuant to subsection 4 may not be considered to be receipts from the taxes
5 imposed under this Part for the purpose of transfers to the Local Government Fund under
6 Title 30-A, section 5681. Revenue received pursuant to subsection 4 may not be used to
7 reduce or eliminate any funding otherwise due the county or participating municipality
8 under any provision of law providing aid to the county or participating municipality,
9 including, but not limited to, aid for schools, roads, municipal assistance or jails.
108. Referendum. The question of whether to impose a local option sales tax must be
11 submitted to the legal voters of a municipality that seeks to impose the local option sales
12 tax. The referendum question must indicate the rate of the local option sales tax and
13 identify the purposes for which the revenue will be used.
14 The petition process and voting must be held and conducted in accordance with Title 30-A,
15 sections 2528, 2529 and 2532 even if the municipality has not accepted the provisions of
16 Title 30-A, section 2528. The voting at elections must be held and conducted in accordance
17 with Title 21-A. The municipal clerk shall prepare the required ballots, which must contain
18 substantially the following question:
19 "Do you favor a local option sales tax of up to 1% to be imposed by [insert
20 name of municipality] on the sale of adult use cannabis and adult use
21 cannabis products?"
22 The voters shall indicate by a cross or check mark placed against the word "Yes" or "No"
23 their opinion of the same. The municipal clerk shall make a return of the results, certify the
24 results and send them to the Secretary of State. The Secretary of State shall forward the
25 results to the assessor.
26 The local option sales tax on cannabis products may be discontinued by referendum
27 conducted in the same manner as the referendum adopting the local option sales tax under
28 this subsection.
299. Effective date of local option sales tax; acceptance by voters. The local option
30 sales tax authorized by this section takes effect 120 days after the municipal referendum
31 vote under subsection 8 if it is accepted by a majority of the legal voters voting at the
32 election and the total number of votes cast equals or exceeds 20% of the total number of
33 votes cast in that municipality in the most recent gubernatorial election.
34SUMMARY
35 This bill allows a municipality to approve by referendum a local option sales tax of up
36 to 1% on sales of adult use cannabis and adult use cannabis products. The uses of the
37 revenue from that sales tax is limited to funding public safety and education initiatives.
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