Maine Imposes Service Provider Tax

The Maine Legislature recently enacted Me. Rev. Stat. Ann. § 2552, effective July 1, 2004. This statute imposes a Service Provider Tax of five percent (5%) on the value of the following services sold in Maine:

• Extended cable television services; 
• Fabrication services; 
• Rental of video media and video equipment; 
• Rental of furniture, audio media and audio equipment pursuant to a rental-purchase agreement; 
• Telecommunications services; 
• The installation, maintenance or repair of telecommunications equipment; and,
• Private non-medical institution services.

The Maine Legislature has repealed Section 17-A of Me. Rev. Stat. Ann. § 1752, also effective July 1, 2004, which defined these services as taxable services for sales tax purposes.

According to the statute, the tax liability is declared to be on the provider, so the provider must report and remit these taxes. The provider may pass the tax onto its customers. However, if a provider includes this tax on a customer's bill, it must be shown as a separate line item and identified as a Service Provider Tax. Providers that provide the services listed above must register with the state for the authority to collect and remit the Service Provider Tax. Applications must be remitted by July 9, 2004.