Bill
LD 1506
The bill would fully exempt individually owned personal property from local property taxes starting 2026, with state reimbursements to municipalities and funding for admin costs.
LD 1506 — An Act to Amend the Personal Property Tax Exemption for Individually Owned Personal Property
Overview
LD 1506 seeks to fully exempt individually owned personal property from Maine’s property tax starting with tax years beginning on or after April 1, 2026. The bill would require General Fund appropriations to reimburse municipalities for the resulting loss in property tax revenue and to cover related administrative costs.
What the bill would do
- Fully exempt individually owned personal property from local property taxes beginning with tax years on/after April 1, 2026.
- Provide state reimbursements to municipalities to offset revenue reductions caused by this exemption.
- Include administrative funding to the Bureau of Revenue Services (within the Department of Administrative and Financial Services) to implement and administer the increased reimbursements and related costs.
Fiscal impact
- General Fund appropriation for implementation: $162,280 in FY 2025-26.
- Ongoing General Fund appropriations: $3,800,000 per biennium starting in FY 2027-28 (with projections indicating $3,800,000 in FY 2028-29 as well).
- The fiscal note covers both increased reimbursements to municipalities and the corresponding administrative costs for the Bureau of Revenue Services.
Key provisions and changes
- Creates a full exemption of individually owned personal property from the property tax.
- Shifts fiscal impact to the General Fund through increased reimbursements to municipalities, rather than allowing local tax districts to bear all loss in revenue.
- Establishes ongoing funding to sustain reimbursements and administrative operations.
Who is affected
- Municipalities: face reduced local property tax revenue from exempted personal property and would receive state reimbursements to offset losses.
- Individually owned personal property owners: benefit from the exemption (no local property tax on eligible property).
- Maine Department of Administrative and Financial Services, Bureau of Revenue Services: responsible for administering the new reimbursement program and related costs.
- Households and businesses with individually owned personal property used for personal or small-scale purposes may see indirect fiscal impacts through changes in municipal funding.
Timeline and status
- Introduced: April 8, 2025.
- Committee: Taxation; work session May 13, 2025; committee amendment A (H-729) adopted.
- Floor actions: Passed to be engrossed with amendment; concurrence actions followed; reported OTP-AM.
- Final actions: On June 16–17, 2025, the bill moved through concurrence and final passage processes with amendments; June 25, 2025, the bill was carried over to any special or regular session of the 132nd Legislature under Joint Order SP 800.
- Effective date: Tax years beginning on or after April 1, 2026.
Notes
- The bill’s fiscal note indicates that the full exemption would necessitate increased General Fund appropriations to reimburse municipalities and cover administrative costs, with front-loaded funding in 2025-26 and ongoing funding in subsequent years.
Compiled from official sources — confirm details with the bill’s official record.
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