Excise Taxes Revisited

Training for: Legal Notes

Despite our best efforts to stamp it out, the rumor apparently persists that local excise tax revenues can only be spent on roads. This of course is not and (to our knowledge) never has been true.

As we wrote here over a decade ago (see “Excise Tax Revenues,” Maine Townsman, Legal Notes, November 2007), excise tax revenues (taxes payable on motor vehicles, watercraft, aircraft, etc.) may be expended for any lawful municipal purpose (see 36 M.R.S.A. § 1489). This includes, for example, general government or administration, reducing the annual property tax commitment, support of police, fire or ambulance services, road maintenance and construction, and so on.

Excise tax revenues must, however, be credited to a designated excise tax account, and as with all other revenues, they must first be appropriated by the municipal legislative body (town meeting or town or city council) before they may be expended.

In addition, as with other taxes, excise tax receipts must be paid by the tax collector to the treasurer on the last day of each month (see 36 M.R.S.A. § 759). The collector must also account at least once every two months to the municipal officers (selectmen or councilors) for all taxes collected, including excise taxes.

For more on excise taxes, see Chapter 5 of MMA’s Tax Collectors & Treasurers Manual, available free of charge to members at www.memun.org. There are also some excellent excise tax resources on Maine Revenue Services’ website at www.maine.gov/revenue/.

Besides our November 2007 Legal Note, we’ve written about excise taxes several other times over the past 10 years or so. For instance, about the local option to refund an excise tax credit if the taxpayer replaces a more expensive vehicle with a less expensive one in the same year (see “Excise Tax Refunds,” Maine Townsman, Legal Notes, August 2007, and “Excise Tax Refunds (Again),” Maine Townsman, Legal Notes, December 2007).

And about the local option excise tax exemption for vehicles owned by Maine residents on active duty and either permanently stationed outside of Maine or deployed for more than 180 days but who register their vehicle in Maine (see “New Local Option Excise Tax Exemption for Active Duty Military Personnel,” Maine Townsman, Legal Notes, February 2012).

Also about the statutory excise tax exemption for vehicles owned by those on active duty and permanently stationed in Maine, regardless of their state of residency (see “Vehicle Excise Taxes & Active Duty Military 2.0,” Maine Townsman, Legal Notes, April 2017).

And, finally, about the statutory transfer of responsibility for collecting aircraft excise taxes from the Maine Department of Transportation to the municipality or county where the aircraft is based (see “Aircraft Excise Taxes Now a Local Function,” Maine Townsman, Legal Notes, March 2013). For details, see our “Information Packet” on aircraft excise taxes, available free of charge to members at www.memun.org. (By R.P.F.) n

Despite our best efforts to stamp it out, the rumor apparently persists that local excise tax revenues can only be spent on roads. This of course is not and (to our knowledge) never has been true.

As we wrote here over a decade ago (see “Excise Tax Revenues,” Maine Townsman, Legal Notes, November 2007), excise tax revenues (taxes payable on motor vehicles, watercraft, aircraft, etc.) may be expended for any lawful municipal purpose (see 36 M.R.S.A. § 1489). This includes, for example, general government or administration, reducing the annual property tax commitment, support of police, fire or ambulance services, road maintenance and construction, and so on.

Excise tax revenues must, however, be credited to a designated excise tax account, and as with all other revenues, they must first be appropriated by the municipal legislative body (town meeting or town or city council) before they may be expended.

In addition, as with other taxes, excise tax receipts must be paid by the tax collector to the treasurer on the last day of each month (see 36 M.R.S.A. § 759). The collector must also account at least once every two months to the municipal officers (selectmen or councilors) for all taxes collected, including excise taxes.

For more on excise taxes, see Chapter 5 of MMA’s Tax Collectors & Treasurers Manual, available free of charge to members at www.memun.org. There are also some excellent excise tax resources on Maine Revenue Services’ website at www.maine.gov/revenue/.

Besides our November 2007 Legal Note, we’ve written about excise taxes several other times over the past 10 years or so. For instance, about the local option to refund an excise tax credit if the taxpayer replaces a more expensive vehicle with a less expensive one in the same year (see “Excise Tax Refunds,” Maine Townsman, Legal Notes, August 2007, and “Excise Tax Refunds (Again),” Maine Townsman, Legal Notes, December 2007).

And about the local option excise tax exemption for vehicles owned by Maine residents on active duty and either permanently stationed outside of Maine or deployed for more than 180 days but who register their vehicle in Maine (see “New Local Option Excise Tax Exemption for Active Duty Military Personnel,” Maine Townsman, Legal Notes, February 2012).

Also about the statutory excise tax exemption for vehicles owned by those on active duty and permanently stationed in Maine, regardless of their state of residency (see “Vehicle Excise Taxes & Active Duty Military 2.0,” Maine Townsman, Legal Notes, April 2017).

And, finally, about the statutory transfer of responsibility for collecting aircraft excise taxes from the Maine Department of Transportation to the municipality or county where the aircraft is based (see “Aircraft Excise Taxes Now a Local Function,” Maine Townsman, Legal Notes, March 2013). For details, see our “Information Packet” on aircraft excise taxes, available free of charge to members at www.memun.org. (By R.P.F.) n