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Maine Revenue Services Rulemaking Activity
Amendments to Rule 801 , “ Apportionment of Income .” This rule, last amended in 2009, explains the basis for the apportionment of net income of corporations, pass-through entities, sole proprietorships and other business types as required by law. MRS proposes to amend Rule 801 as follows. The discussion of “water’s edge” reporting is expanded. The recent legislative changes, including the so-called “Finnigan rule,” the repeal of the throw-back rule and the adoption of the throw-out rule, are reflected. New definitions of “taxpayer” and “unitary business” are included in the proposed Rule and outdated portions of the Rule are deleted. Additional edits are made throughout. The application date and the summary at the beginning of the Rule have been updated.
Proposed amended Rule 801 can be found on the MRS web site at www.maine.gov/revenue (select Laws & Rules). Comments are due by August 23, 2010, and should be directed to Edward Charbonneau, Esq., Deputy Executive Director – Legal, (207) 624-9626, Edward.Charbonneau@maine.gov.
Amendments to Rule 803, “Withholding Tax Reports and Payments.” This rule, which has been in place since 1982 and was repealed and replaced in 2010, establishes a system of filing withholding tax reports and making payments. MRS proposes to amend Rule 803. New language is added, including electronic filing language, to follow federal requirements for furnishing information statements. Employers and payers filing more than 250 Forms W-2 or 1099 must report the same information to MRS. Clarifications are made to withholding requirements for compensation paid to nonresidents performing services in this state. Editorial changes are made throughout the Rule.
Proposed amended Rule 803 can be found on the MRS web site at www.maine.gov/revenue (select Laws & Rules). Comments are due by August 23, 2010, and should be directed to Edward Charbonneau, Esq., Deputy Executive Director – Legal, (207) 624-9626, Edward.Charbonneau@maine.gov.
Amendments to Rule 810 , “ Maine Unitary Business Taxable Income, Combined Reports and Tax Returns .” This rule last amended in 2008 explains standards for determining Maine income tax for unitary businesses and combined reporting and tax returns. MRS proposes to amend Rule 810 to do the following. The combined reporting section is expanded to provide guidance on “water’s edge” filing. The section on Maine net income is deleted. The recent legislative changes (including the so-called “Finnigan rule”) are reflected. The rule clarifies that members of unitary group filing a combined return are jointly and severally liable for the tax of the members of the combined group. Section .06 was rewritten to better reflect the statute. Definitions are updated. Editorial changes are made throughout the Rule.
Proposed amended Rule 810 can be found on the MRS web site at www.maine.gov/revenue (select Laws & Rules). Comments are due by August 23, 2010, and should be directed to Edward Charbonneau, Esq., Deputy Executive Director – Legal, (207) 624-9626, Edward.Charbonneau@maine.gov .
REPORTING SALES TAX FOR CASUAL RENTALS
Effective July 1, 2005 casual rentals became subject to the 7% sales tax. “Casual rental” is defined as rental of one unit, whether a cottage, trailer camp, condominium, vacation home, camp, etc. for transient or temporary guests. If the rentals are for fewer than 15 days each calendar year, then no sales tax registration is required and sales tax does not need to be charged or remitted. Casual rentals for 15 days or more per calendar year are subject to sales tax and would require registration, collection and remittance of the tax.
Beginning calendar year 2008, individuals are allowed to pay the sales tax from casual rentals on the Maine Individual Income Tax return, in lieu of filing sales tax returns, if the total sales tax does not exceed $2,000.00 and the individual’s only sales tax collection responsibility is from casual rentals.
The option to report on the income tax return is only available to individuals. If the property is owned by a corporation, LLC, partnership, or an organization, the sales tax cannot be reported on the individual income tax return, but must be reported on a sales tax return.
A valid sales tax registration is still required even if an individual reports and pays the sales tax on the income tax return. Applications are available on our website or by calling 207-624-9693.
If an individual chooses to pay the sales tax on the individual income tax return, the individual’s sales tax account will be marked to prevent the mailing of future sales tax returns. If the individual decides to no longer pay the sales tax on the individual income tax return, it is the individual’s responsibility to notify Maine Revenue Services of this change.
For more information on rentals of living quarters, please refer to Bulletin 32 at www.maine.gov/revenue/salesuse/salestax/bulletinssales.htm or call 207-624-9693.
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