Opinion of the Justices of the Supreme Judicial Court
| Decision Date | 14 November 1985 |
| Citation | 501 A.2d 16 |
| Parties | . Supreme Judicial Court of Maine. Questions Propounded by the Governor in a Communication Dated |
| Court | Maine Supreme Court |
On November 13, 1985, the Maine Legislature convened in special session called by the Governor. On that day the House of Representatives and the Senate enacted House Paper 1163, Legislative Document 1661, AN ACT Establishing a Commercial Forestry Excise Tax and Providing an Appropriation for Refunding Maine Forest Fire Suppression Taxes Paid, [Attached hereto as Exhibit A] as amended by Committee Amendment "A" (Filing No. H-486). [Attached hereto as Exhibit B] The Legislature then adjourned sine die, [Attached hereto as Exhibits C & D]. The bill now awaits the Governor's signature to become law.
In Eastler v. State Tax Assessor, 499 A.2d 921 (Me.1985) the Law Court struck down the Forest Fire Suppression Tax, 36 M.R.S.A. §§ 2711-2714 (Supp.1984-85) because Despite the express language of the bill imposing the tax on the privilege of using land in commercial forestry enterprise there remains legal uncertainty as to whether the Court would characterize this tax as an excise tax. In order to resolve the State's current financial difficulties without further disruption and in order to guard against the imposition of an unlawful tax, I respectfully request your opinion on the following question:
it was not a lawful excise tax. The practical effect of the Eastler decision was to create an unanticipated $13 million obligation of the State of Maine for the current biennium. The Governor called the Legislature into special session and submitted L.D. 1661 to address this serious and immediate problem. The bill, as amended, expressly imposes an excise tax on persons engaged in commercial forestry enterprise. The tax is measured by the commercial forest land used by such persons in commercial forestry enterprise businesses. A person not engaged in commercial forestry is not subject to this tax. The tax is administered by the State Tax Assessor. Enforcement of the tax is accomplished through the same lien and collection procedures as are used under the State's income tax laws. See 36 M.R.S.A. §§ 5311-5322 (1978 and Supp.1985-86).
Does Legislative Document 1661 (Exhibit A) as amended by Committee Amendment "A" (Exhibit B), create a lawful excise tax, consistent with the Maine Constitution, on commercial forestry enterprise in the State of Maine?
Respectfully Submitted.
EXHIBIT B * Committee Amendment A (H-486).
EXHIBIT C * Certification of the Clerk of the
House of Representives.
EXHIBIT D * Certification of the Secretary
of the Senate.
EXHIBIT E Engrossed copy of L.D. 1661.
EXHIBIT F * Opinion of the Attorney General
to the Governor regarding
the constitutionality of L.D.
1661. Opinion Dated November 9, 1985.
* Not reproduced.
EXHIBIT E
IN THE YEAR OF OUR LORD NINETEEN HUNDRED AND EIGHTY-FIVE
AN ACT Establishing a Commercial Forestry Excise Tax and Providing an Appropriation for Refunding Maine Forest Fire Suppression Taxes Paid.
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 36 MRSA c. 366, as amended, is repealed.
Sec. 2. 36 MRSA c. 367 is enacted to read:
§ 2721. Legislative findings
The Legislature finds that engaging in commercial forestry is a privilege that results in costs as well as benefits to the The Legislature further finds that the persons owning 500 acres or more of forest land are typically engaged in commercial forest activity. Historically, that amount of land has been used for administrative efficiency and to delineate the amount of land indicative of management for commercial activity, especially for purposes of the Maine Tree Growth Tax Law and the spruce budworm tax. The activity of growing commercially valuable trees is one which occupies a very long cycle. It is not uncommon that 40 years must pass between the planting of a seedling and the time when the tree will be harvested for commercial use. During that interim, it may at times be difficult to discern any obvious commercial activity taking place on the land. In many instances, the best accepted commercial practice with regard to that forest land is to do nothing other than to allow the trees to follow the natural course of maturation. Experience has shown that it is almost inevitable that a large amount of land containing commercially valuable trees will at some point be harvested for commercial purposes. Owners of such large amounts of land will receive the financial benefit of commercial activity either through the sale of the forest product or through the increased value that the forest product adds to the land when the land is transferred.
State and that persons enjoying that privilege should be subject to the tax imposed by this chapter.
§ 2722. Annual tax
An excise tax is imposed upon the privilege of using one's land in commercial forestry enterprise in this State. The tax shall be levied upon owners of commercial forest land and shall be apportioned according to the formula specified in section 2723. The State, municipalities and the Federal Government are not subject to this tax.
§ 2723. Computation of the tax
1. Fiscal years beginning with 1986-87. By September 1, 1986, and annually thereafter, the Commissioner of Conservation shall certify to the State Tax Assessor the amount appropriated from the General Fund by the Legislature for that fiscal year and the amounts of any other receipts of funds as a result of forest fire protection activities, including projected federal funds, actual receipts from municipalities and the unorganized territory pursuant to Title 12, sections 9204, 9205 and 9205-A, for the preceding fiscal year and receipts from sales of vehicles, land and equipment attributable to the preceding fiscal year. The State Tax Assessor shall subtract receipts from other sources from the General Fund appropriation for forest fire control and divide the result by 2. This amount shall be divided by the total number of adjusted acres of commercial forest land, rounded to the nearest 1/10 of a cent and multiplied by the number of adjusted acres of commercial forest land owned by each taxpayer to determine the amount of tax for which each owner of commercial forest land shall be liable.
2. Fiscal year 1985-86. For fiscal year 1985-86, the amount of the tax assessed against each owner of commercial forest land shall be determined by dividing $9,827,150 by the total number of adjusted acres of commercial forest land, rounded to the nearest 1/10 of a cent and multiplying by the number of adjusted acres owned by each taxpayer.
3. Minimum tax. If the amount calculated under this chapter is less than $5, the amount assessed shall be $5.
§ 2724. Definitions
As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.
1. Adjusted acres. "Adjusted acres" means the total number of acres of commercial forest land owned by a person throughout the State reduced by 500 acres. Cotenants of property, whether joint tenants or tenants in common, shall be treated as one person and shall collectively be entitled to only one 500-acre reduction.
2. Commercial forest land. "Commercial forest land" means land which is classified or which is eligible for classification as forest land pursuant to the Maine Tree Growth Tax Law, chapter 105, subchapter II-A, except that "commercial forest land" does not include land described in section 573, subsection 3, paragraph B, C or D. In determining whether land not classified under the Maine Tree Growth Tax Law is eligible for classification under that law, all facts and circumstances shall be considered, including whether the landowner is engaged in the forest products business and the land is being used in that business or there is a forest management plan for commercial use of the land or a particular parcel of land has been harvested for commercial purposes within the preceding 5 years.
§ 2725. Due date
This excise tax is due May 1, 1986, and each subsequent May 1st.
§ 2726. Administration
1. Returns. The State Tax Assessor shall prescribe and make available the required tax return. All owners of more than 500 acres of forested land, whether or not that land is commercial forest land, shall complete and file tax returns with the State Tax Assessor no later than March 1, 1986, and each subsequent March 1st.
2. Date of ownership. The ownership and use of forested land for purposes of this chapter shall be determined as of April 1st preceding the date that the tax return is due.
3. Notice. The State Tax Assessor shall notify all landowners subject to this tax of the tax assessed against them no later than 30 days before the date that the tax is due. Failure to notify a landowner shall not relieve the obligation to pay the tax when due.
4. Supplemental assessments. Supplemental assessments may be made in accordance with section 141.
5. Interest and penalties. Taxes remaining unpaid after the due date are...
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