18- 125 C.M.R. ch. 318, § 3

Current through 2024-51, December 18, 2024

Section 125-318-3 - Calculation of the 80% use test

A.Generally.The time period to which the 80% use test is applied begins on the date the property is placed into service and ends either two years from that date or on the date the property is sold, scrapped, destroyed, or otherwise removed from service, whichever occurs first. Property meets the requirements of the exemption when the number of days of qualifying use, divided by the total number of days of use (days of qualifying use plus days of non-qualifying use) is 80% or more. Disregarded days are not counted in the calculation of the 80% use test.

1.Disregarded days.Any full day during which the property in question is not being used in commerce (for example, any full day during which it is being stored, repaired, or maintained).

2.Days of qualifying use.Any full day or portion of a day from the date of dispatch of property for the carrying of or providing the motive power for the carrying of a bona fide payload in interstate or foreign commerce through the day the property returns to its principal place of business or the property is dispatched in connection with a new payload.

3.Days of non-qualifying use.Any full day that does not qualify as a disregarded day under Paragraph 1 or a day of qualifying use under Paragraph 2.

B.Examples

Example 1: A trailer is dispatched by the purchaser to a location in Maine where it will be loaded with a bona fide payload. The trailer then sits idle at this location, waiting to be loaded, for 30 days, after which the payload is loaded and delivered to an out of state location. These 30 days are counted as days of qualifying use when calculating the 80% use test.

Example 2: A trailer is dispatched by the purchaser to a location in Maine where it will be loaded with a bona fide payload. The trailer then sits idle at this location, waiting to be loaded, for 30 days, after which the payload is loaded and delivered to another location within this State. These 30days are counted as days of non-qualifying use when calculating the 80% use test.

Example 3: On Day 1, a tractor and trailer are dispatched by the purchaser to pick up a bona fide payload in Maine that will be carried to Ohio. The tractor and trailer deliver the payload to Ohio, then begin their return trip to Maine. On Day 7, while the tractor and trailer are en route to Maine, they are dispatched to pick up a bona fide payload in New Jersey for transport to Maine. On Day 10, the payload loaded in New Jersey is delivered in Maine. On Day 11, the tractor and trailer return to their principal place of business. All 11 days are counted as days of qualifying use when calculating the 80% use test.

Example 4: A tractor and trailer carrying a bona fide payload from another state stop overnight at a rest stop in southern Maine. The next day, the tractor and trailer resume the trip to deliver the cargo to its destination in Maine. Both days are counted as days of qualifying use when calculating the 80% use test.

Example 5: A trailer carrying a bona fide payload enters Maine and arrives at its destination where the trailer sits for 20 days waiting to be unloaded. The 20 days are counted as days of qualifying use when calculating the 80% use test.

Example 6: Tractor #1 and a trailer carrying a bona fide payload enter Maine from another state and arrive at a location where they sit for 10 days. On Day 11, the trailer is detached from Tractor #1 and hooked to Tractor #2 for final delivery in Maine, which occurs later that day. Days 1 through 11 are counted as days of qualifying use for the trailer when calculating the 80% use test. Days 1-10 are counted as days of qualifying use for Tractor #1. Day 11 is counted as a day of qualifying use for Tractor #2.

Example 7: On Day 1, the purchaser dispatches a tractor and trailer from Maine to New Jersey with a bona fide payload. On Day 3, the trailer is unloaded in New Jersey. On Day 4, the tractor and empty trailer leave New Jersey to return to Maine. Upon the tractor and trailer returning to Maine on Day 5, the trailer returns to its principal place of business in Maine and immediately goes to a maintenance facility for mechanical work that is finished at the end of Day 10.Days 1 through 5 are counted as days of qualifying use for both the tractor and the trailer when calculating the 80% use test. Days 6 through 10 are disregarded days for the tractor for purposes of the 80% use test.

C.Extension of time. Maine Revenue Services may, for good cause, extend by up to 60 days the time for placing a vehicle or other property in use as an instrumentality of interstate or foreign commerce. The purchaser need not apply for the extension, but good cause must be documented in the purchaser's records. Good cause will not be found when the purchaser has been negligent or otherwise failed to make a good faith effort to place the property in use in interstate or foreign commerce within 30 days from the date of purchase.

18- 125 C.M.R. ch. 318, § 3