Current law requires vehicle owners to pay excise tax on the manufacturer’s suggested retail price, not the purchase price.

A dealer is advertising new pickups for $10,000 under the MSRP. Customers who buy a new truck will pay the sales tax on the purchase price and excise tax on the $10,000 that they didn’t spend. They will also pay excise tax on the $10,000 each and every year that they re-register the vehicle. If they keep the vehicle 10 years, they will end up paying excise tax on $100,000 that they did not spend!

I purchased a 12-year-old vehicle for $12,000. I paid sales tax on the $12,000 but paid excise tax on the MSRP value of $46,000: thus, on $34,000 that I did not spend.

L.D. 707 will change the law so that excise tax is paid on the purchase price. Previous Legislatures have already changed the law to the purchase price on trucks registered over 26,000 pounds and manufactured after 1996, and on buses made after 2006.

You can have significant influence on this bill passing if you will call or email both your state representative and your state senator and ask for their support in passing this bill. It is scheduled for a public hearing April 6 at 1 p.m. in Room 127 of the State House.

The Maine Municipal Association, a lobbying group for the towns, will lobby against passage because the towns don’t want to lose the revenue. What’s that got to do with requiring us to pay excise tax on money that we didn’t spend?

Legislators say that they get few calls from constituents, and emphasize that your calls do make a difference. When we are silent, the legislators assume that we are happy with the status quo. With everyone’s support, we can get this corrected.

David Kent


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