A tax reform program that extended Maine's
5 percent sales tax to a number of services has been soundly rejected by the
state's voters. In a June 8 election, 61 percent of those casting
ballots voted to repeal tax extension.
The plan proposed to reduce income taxes with the revenue to
be replaced by the services tax. House Democratic Majority Leader John Piotti, the driving force behind the tax proposal said,
"It's fairly clear that the people of Maine don't want this type of tax
reform."
California's tax reform commission last year advanced a
proposal that has some similarities to the one defeated in Maine. The Parsky Commission's proposal would have taxed services
through a new business net receipts tax and would have reduced income,
corporate and sales taxes.
In addition to receiving support from the legislators who
voted for the bill and the state's governor, Democrat John Baldacci, Maine's
tax reform proposal was supported by major newspapers such as the Bangor Daily News, the Lewiston Sun-Journal and the Maine Today
Media chain (owner of the Portland
Press-Herald).
Opposing the tax reform were the Republican and Green
parties and the Maine Tea Party movement.
(Note: Because of
the wording of the referendum measure – Question 1 – a "yes" vote was
a vote to approve the referendum and strike down the law. This is unlike
California, where a "no" vote on a referendum strikes down the law.
The Maine constitution allows for a referendum to be placed on the ballot to
overturn a law if opponents collect signatures of 10 percent of the number of
votes cast in the last election for governor.)
Services that would have been taxes under the plan included
many amusement, entertainment and recreational services; installation,
maintenance and repair services; vehicle towing; dry cleaning and laundry;
moving; diaper services; house-cleaning; interior decoration; pet services;
picture framing; transportation and courier services; rental of safe deposit
boxes; and long-distance telephone services. (Sources: Maine attorney general's
analysis, ballot arguments and Ballotpedia.)
Cal-TaxReports, June 21, 2010
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