Section 125-601-07 - Sourcing property to MaineA.Property1.Real property.Real property is sourced to the taxing jurisdiction in which it is physically located, regardless of whether the decedent was a Maine resident or nonresident on the date of the decedent's death.2.Tangible personal property.Tangible personal property is sourced to the taxing jurisdiction in which it was situated at the date of the decedent's death. If an item of tangible personal property is temporarily situated in a taxing jurisdiction for repair or other temporary purpose, that item will be sourced to the taxing jurisdiction to which it is intended to be located after such repair or purpose.3.Intangible property.Intangible property is sourced to the taxing jurisdiction of the decedent's domicile as of the date of the decedent's death. Intangible property includes, but is not limited to, bank accounts, stocks, bonds and other cash accounts, except as provided by .07(C) and (D) below.4.Gifts.The value of gifts made by the decedent within one year prior to death included in the decedent's estate by 36 M.R.S.§4062(2)is sourced consistent with .07(A) (1), (2), and (3) above.B.Domicile.The word "domicile" is a common-law (i.e., judge-made law) term that the Maine courts, not the Legislature or Maine Revenue Services, have defined. Under the Maine common law, "domicile" means the place (A) where a person resides, and (B) where that person intends to remain and, whenever absent, intends to return. Thus, according to the Maine courts, domicile has two components: residence and the intent to remain or return, if absent. The intent to move in the future is not sufficient to establish domicile. Once an individual's domicile is established in Maine, it continues here until domicile is established elsewhere. An individual alleging a change in domicile has the burden to show that domicile was established in another state or country. Where a decedent was domiciled at the date of death is a question of fact in which objective factors exhibiting the decedent's actual location and intent may be relevant. Factors that may be relevant or excluded in determining a decedent's domicile at the date of death include those relevant or excluded in determining income tax domicile (for more information, see Me. Dep't of Admin. & Fin. Servs., Bur. of Rev. Servs., 18-125 C.M.R., ch. 807.03 and. 04), as well as the locations of significant relatives or an appointed attorney-in-fact for health care or financial decisions. Where the decedent qualified for financial assistance for health care, where the decedent had a contract for residence or care at a residential living facility, or where the decedent qualified as a statutory resident for income tax purposes may all be important factors to be considered in determining domicile.
Maine Revenue Services considers all of an individual's relevant facts and circumstances allowed by Maine law when it determines where that individual is domiciled. Although the individual's intent to remain or return is a critical factor in determining domicile, an individual's statement as to his or her intent is not necessarily determinative. Evidence of the decedent's intent may be found in many decisions made by that individual. The decedent may have retained the ability to make such decisions and determine his or her domicile even though the decedent was deemed incapable of making, or chose not to make, other decisions. Actions by a person who was responsible for an incapacitated individual's affairs may be considered when determining the decedent's intent to remain. When a guardian has been appointed and chooses the incapacitated individual's place of abode pursuant to authority as a guardian, the intent of the guardian for the individual to remain or return to a particular location becomes a factor in the determination of the incapacitated person's domicile. Evidence of the guardian's intent may be found in relevant statements and actions.
C.Residents.For a resident decedent's estate, all real and tangible personal property of the decedent that is located in Maine as of the date of the decedent's death, plus all intangible property owned by the decedent as of date of death, are sourced to Maine. A credit may be allowed against the estate tax of a resident decedent's estate for constitutionally valid estate, inheritance, legacy and succession taxes actually paid to another jurisdiction upon the value of real or tangible personal property owned by the decedent, subject to such tax and included in the value of the decedent's intangible personal property subject to taxation under 36 M.R.S.§4063.D.Nonresidents1.Generally.For a nonresident decedent's estate, all real and tangible personal property situated in Maine as of the date of the decedent's death is sourced to Maine.2.Real or tangible personal property transferred to a trust or other pass-through entity.When real or tangible personal property is owned by a pass-through entity, the entity must be disregarded and the property must be treated as personally owned by the decedent where the entity does not actively carry on a business for the purpose of profit and gain; the ownership of the property in the entity was not for a valid business purpose; or the property was acquired by other than a bona fide sale for full and adequate consideration and the decedent retained a power with respect to or interest in the property that would bring the real or tangible personal property located in this State within the decedent's federal gross estate. The Assessor will determine whether the transfer was for a valid business purpose by looking at the economic realities of the transfer. Tax avoidance is not considered a valid business purpose.
3.Allocation of debt.For nonresident decedents, the Maine estate tax is applied to the total value of the real and tangible personal property treated as owned by the decedent situated in Maine as of the date of the decedent's death. If Maine real property is encumbered, only the direct debt against the property (i.e., the debt used for the purchase, repair, maintenance or improvement of that property) is an allowable deduction.18- 125 C.M.R. ch. 601, § 07