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Four Democrats to push sales tax increase bills in Maine this week

The four primary sponsors of bills that would increase the sales tax by allowing local communities to add their own sales tax, left to right, Rep. Pinny Beebe-Center (D – Rockland), Sen. David Miramant (D – Knox), Rep. Lori Gramlich (D – Old Orchard Beach), Rep. Maureen Terry (D – Gorham). All photos courtesy Maine Legislature website.

AUGUSTA – The Maine Legislature’s Taxation Committee will consider four different bills Wednesday that could increase the sales tax on Maine people, but apply the tax at the local level instead of raising the state sales tax rate.

All four bills are sponsored by Democrats serving in the Maine Legislature.

L.D. 65: An Act To Allow Municipalities To Impose a Seasonal or Year-round Local Option Sales Tax (Sponsor: Rep. Pinny Beebe-Center D – Rockland)

This bill would allow cities and towns to impose a local sales tax if the city or town puts the question to voters with certain information and it is approved. The funds would be sent to the state and then returned, minus administrative costs, to the municipality. The sales tax could be seasonal, or year-round.

This bill has six cosponsors, all Democrats.

L.D. 156: An Act To Allow Regional Service Center Municipalities To Assess an Additional One Percent Sales Tax for Infrastructure Costs (Sponsor: Sen. David Miramant D – Knox)

This bill would allow Maine’s ‘service center communities’ to impose a 1% local sales tax to pay for municipal infrastructure costs. This bill also would require the sales tax be approved by a referendum. About 70 municipalities would be eligible to impose this sales tax based on their service center designation. These municipalities are generally municipalities with a larger populations and a mix of publicly available services. The funds would be sent to the state of Maine and then returned, minus administrative costs, to the municipality.

This bill has no cosponsors, only the primary sponsor, Sen. Miramant.

L.D. 609: An Act To Provide Municipalities Additional Sales Tax Revenue from Lodging Sales (Sponsor: Rep. Maureen Terry D – Gorham)

This bill would allow municipalities to impose an additional 1% sales tax on top of the existing 9% Maine lodging tax. The funds would be sent to the state and then returned, minus administrative costs, to the municipality.

This bill has six cosponsors, all Democrats.

L.D. 1110: An Act To Establish a Local Option for Sales Tax (Sponsor: Rep. Lori Gramlich D – Old Orchard Beach)

This bill would allow municipalities to impose a local sales tax if approved by referendum, with certain information provided to the voters. The funds would be sent to the state and then returned, minus administrative costs, to the municipality.

This bill has nine cosponsors, all Democrats.

Many tax policy groups say local sales taxes such as those being considered are actually the most regressive type of tax, because the only people who can’t escape paying them are those without the means to travel and make purchases at a lower cost – while taxpayers of greater means can simply go make the purchase in a community that doesn’t have a local sales tax.

The Institute on Taxation and Economic Policy, one of the left-leaning groups that says LOST is a regressive tax that disproportionately hurts the poor, actually credits Maine for having one of the top ten equitable tax structures in the nation.

But lawmakers who want to extract more revenue from taxpayers despite Maine’s record levels of revenue and surplus funds can attempt to justify the tax by pointing to the fact that Maine’s sales tax is among the lowest in the nation. According to the Tax Foundation, Maine ranks 42nd in the nation for sales tax, at 5.5%.

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