: If you are an antiques dealer in Maine and the gross sales you
report to Maine Revenue Services (MRS) are less than $10,000 per
year, get ready to pony up and pay sales tax on all of your
wholesale purchases. Citing the fraudulent use of resale
certificates and the loss of "millions of dollars each year" in
tax revenues, a new law, LD 1919, passed by the legislature and
signed recently by the governor, goes into effect July 30.
While the new law is intended to address and correct a perceived
"problem" with retailers throughout the state, in fact it creates
a huge problem for those that it affects in the antiques trade.
"This new law is intended to address this problem by ensuring
that only bona fide retail businesses can make tax-exempt
purchases for resale," states Commissioner Rebecca Wyke in a
press release from MRS.
For dealers who no longer qualify for a certificate, however, it
creates an end of year paperwork nightmare and results in
significant out of pocket monies being unjustly held by the
state.
MRS will now issue annual resale certificates to only those
businesses that report gross sales of $10,000 or more. Small or
part-time dealers who do not meet the gross sales level will be
required to pay sales tax on all items purchased and then apply
for a credit when they submit their yearly sales tax returns.
The year-end refund, or credit, for the sales tax paid by dealers
will only be granted if the item has actually been resold within
that year. If the item has not been sold within five years of the
date of purchase, no credit for the amount of tax originally paid
will granted.
"The dealers in Maine who are being discriminated against would
appreciate the support of all those persons in other states and
Canada who feel this law is unfair and unproductive," states
Maine antiques dealer Margaret Kiely. "Maine needs additional
revenue, but is this any way to get it?" she queried. Kiely has
requested that correspondence from those opposing the bill be
sent to the governor's office (see contact information below).
Dealers and auction houses must also collect new certificates
from buyers on a yearly basis. A resale certificate provided to a
dealer for a purchase in December is not valid for a purchase
made in the following month, January. Dealers will also be
required to retain "all relevant books and records, including all
resale certificates collected, for a period of six years."
If buyers cannot produce a copy of their Maine resale certificate
at the time of the sale, they must be charged the tax, for which
they can apply for credit at year's end. Resale certificates
expire yearly and those meeting the criteria will automatically
be issued a new certificate.
Maine dealers should have already received their applications.
Around the middle of July, MRS stated that it will have issued an
"Annual Resale Certificate to all active retailers reporting
annual gross sales of $10,000 or more based on returns filed
during the previous 12 months." In December, MRS "will evaluate
all active sales tax accounts and issue a new Annual Resale
Certificate to registered retailers reporting annual gross sales
of $10,000 or more."
All current Maine resale certificates expire on August 15.
Out of state dealers will be allowed to "continue to use the
Multi-jurisdictional Uniform Sales and Use Tax Certificate issued
by the Multistate Tax Commission to document their exempt
purchase."
For more information regarding these changes, visit
www.maine.gov/revenue, call 207-624-9693, or write to Maine
Revenue Services, PO Box 1065, Augusta ME 04332. Governor John
Elias Baldacci can be reached at 1 State House Station, Augusta
ME 04333-0001; email governor@ maine.gov; phone 207-287-3531.
-DSS
