AUGUSTA – Your cost for food and lodging could soon be going up. Earlier today, in a 73-70 vote, the Maine House of Representatives voted to approve a bill that would give municipalities across Maine the power to impose a local option sales tax on the sales of meals and lodging.
The bill was supported by Democrat and opposed by Republicans with a few Democrat defectors.
Rep. Michael Brennan (D – Portland) complained on the floor of the Maine
House during debate that Maine’s tax code is “narrow and one-dimensional” as he
spoke in favor of a local option sales tax.
Rep. Michael Sylvester, the sponsor of the bill, said a local option sales tax represents represents the “opportunity” that lawmakers in Augusta talk about all the time for Maine, and said that it would be paid for largely by tourists. The tax increase would, of course, be in effect year-round for Maine residents as well as the three months which represent peak tourist season for Maine.
Referring to the Maine Constitution, Rep. Bruce Bickford (R – Auburn)
questioned whether the proposal was even constitutional. After Rep. Dennis Keschl
(R – Belgrade) pressed that issue, Rep. Ryan Tipping (D – Orono) who chairs the
taxation committee, rose and said that Attorney General Aaron Frey, a Democrat
and former member of the House, had sent a letter that he did not think there
were significant constitutional concerns with the bill.
Assistant House Republican Leader Trey Stewart recited the various
changes the bill had undergone as supporters had tried to entice more
representatives to support it, from saying it would fund opioid abuse programs
to others, eventually ending with a promise to send 25% of the funding to a
rural development program. He said the bill was “more about just getting a local
option sales tax,” than anything else the bill’s supporters said it was about.
Rep. Stewart also said he opposed the bill because the local option sales tax is regressive.
Rep. Bruce Bickford also pointed out that bill has been coming to the
legislature since at least as far back as the 119th Maine
Legislature, which would have been about 20 years ago. Bickford also said that the
funding for the rural development authority is not guaranteed to go to rural
towns as supporters said it would.
Bickford said that while supporters of the bill cited cuts to revenue
sharing as a reason the bill was needed, that even when revenue sharing was at the
highest point, in 1999, the bill was being pushed.
Bickford said that based on the current projects from the rural development authority, more than 90% of rural Maine communities would not benefit at all from the local option sales tax.
After a floor debate of about a half hour, the House voted. Seventy-three
Representatives, all Democrats or liberal independents, voted in favor. Seventy
Representatives voted in opposition. Among those seventy were all Republicans, twelve
Democrats and right-of-center independent lawmakers.
Advocates for the bill argued that it would help provide property tax relief, but as the NFIB pointed out in committee testimony, nothing in the proposed legislation addressed the revenue going toward property tax relief. Opponents of the bill argued that local motel and restaurant owners should not have to become ‘tax collectors’ for the municipality they are located in.
In a Facebook post, Portland Mayor Ethan Strimling said, “WE WON THE HOUSE 73-70!!! First time in Maine history. On to the Senate!”
The bill would require a local referendum be put out to voters and approved before any local option sales tax could be imposed.
The bill now will go to the Maine Senate for consideration.