18-125-302 Me. Code R. § 5

Current through 2024-51, December 18, 2024

Section 125-302-5 - Responsibilities of retailers and service providers - Government sales

Sales made directly to the federal government or the State of Maine or any of its political subdivisions are exempt from sales tax and service provider tax. Sales made directly to any unincorporated agency or instrumentality of either the federal government or the State of Maine, or to any of their wholly-owned incorporated agencies or instrumentalities, are also exempt. This category includes school districts; water, power, parking, sewer and other districts in Maine established by legislative act as quasi-municipal corporations; village corporations; the University of Maine and Maine Community College Systems; and the Maine Turnpike Authority. Governmental subdivisions, units, agencies and instrumentalities covered by 36 M.R.S. §§1760(2) and 2557(2) are referred to in this rule as "governmental agencies."

Governmental agencies are not required to obtain a tax exemption certificate. A retailer or service provider must document all tax-free sales to governmental agencies by listing the name of the governmental agency on the invoice or sales slip.

Regardless of the specific method of payment, a retailer or service provider is not relieved of its burden of proving that a sale to a governmental agency is exempt if it has, at the time of the sale, knowledge of facts that give rise to a reasonable inference that the card is being used to make a personal purchase that is not tax-exempt or for any other purpose other than an official governmental purpose.

1.Direct billing. Sales that are billed directly to a governmental agency may be made tax-free without a purchase order or other documentation beyond that required by this rule.

2.Cash, personal check, or personal bank card. Purchases paid for with cash, personal check, personal credit card, or personal debit card may not be made tax-free unless the individual making the purchase presents a purchase order issued by the governmental agency that identifies the specific item or items, or the specific service, to be purchased. The retailer or service provider must retain the purchase order (or a copy) in its records and must identify the sale transaction on that document.

Notwithstanding the previous paragraph, sales made to authorized employees or representatives on behalf of governmental agencies that are paid for with cash, personal check, personal credit card, or personal debit card may be made tax-free if a magnetic customer card issued by the retaileror service provider to the governmental agency is presented at the time of the sale by the authorized individual making the purchase and is recorded electronically by the retaileror service provider. The retaileror service provider must retain the digital information identifying the transaction and the purchaser. The customer card must:

A. Bear the name and signature of the specific individual authorized by the governmental agency to use it to make purchases; and

B. Contain a statement substantially similar to the following: "This card is to be used only by the individual named hereon for purchases authorized by [NAME OF GOVERNMENTAL AGENCY]. If this card is used by the individual named hereon for any other purpose, the individual may be held liable for any applicable taxes, together with associated interest and penalties, and, if used to intentionally evade Maine tax due, may also be subject to criminal prosecution."

3.Other credit or debit cards. Purchases paid for with a credit card or debit card of the type described in paragraphs A and B below may be made tax-free only if the retailer or service provider retains documentation that identifies the governmental agency, the sale transaction date, the sale price, items or services purchased, and the last four digits of the credit or debit card number.

A. State of Maine. State of Maine Procurement Cards that are billed directly to the State of Maine.

B. United States Government. Cards issued to federal employees pursuant to the GSA Smart Pay program and billed directly to the U.S. Government.

18-125 C.M.R. ch. 302, § 5