AUGUSTA — The Maine House on Tuesday narrowly approved a measure that would give cities and towns the authority to add a 1 percent sales tax on restaurant and lodging bills if local voters approve.

Maine’s largest cities and towns have long pursued the so-called local option sales tax. The 73-70 vote in favor was backed mostly by Democrats, but there was also bipartisan opposition to the bill.

“Outside of the property tax and the excise tax (on vehicles) local municipalities have no other way of generating revenue,” said Rep. Michael Brennan, D-Portland, a former mayor of the city. Brennan and other supporters, including sponsor Rep. Mike Sylvester, D-Portland, said allowing cities and towns to collect their own sales tax is long overdue.

If the tax were in place in Portland, it would raise about $3 million a year toward the city budget. Sylvester and other supporters also said the brunt of a local sales tax would mostly be absorbed by visitors to Maine.

The bill would also require local voters to approve the tax and would direct 25 percent of the tax revenue to the Maine Rural Development Authority, which would award the funding for economic development projects in rural Maine. The local option tax could generate as much as $5 million a year for the fund, depending on how many cities and towns approve a local sales tax.

Opponents said the bill would create a regressive tax that would hit low-income Mainers the hardest while doing little to redevelop rural parts of the state. Others such as Rep. Billy Bob Faulkingham, R-Winter Harbor, said their towns only have one or two restaurants and no hotels, so a local sales tax would raise little revenue.


Rep. Bruce Bickford, R-Auburn, said the bill would set up a system of “haves and have-nots” in Maine. And Rep. Trey Stewart, R-Presque Isle, assistant House Minority Leader, said the bill would expand taxes, “in a reckless manner on hard-working Mainers.”

But supporters, including Rep. Joseph Perry, D-Bangor, said the tax mostly targets tourists or those who can afford to stay in a hotel or motel while eating at “class A” restaurants, not lower income Mainers.

The bill now goes to a vote in the state Senate.


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