August 19, 2012

Towns offer excise tax break to veterans

By Susan M. Cover scover@mainetoday.com
State House Bureau

Robert Rapalus, of Gardiner, thinks his son and others who serve in the military deserve a little help from their hometowns.

click image to enlarge

Robert Rapalus, left, of Gardiner, and his son Robert.

EXCISE EXEMPTIONS

Here’s a list of the 14 municipalities in central Maine that indicated they offer the exemption from paying the vehicle excise tax:

Chelsea, Farmingdale, Gardiner, Manchester, Monmouth, Pittston, Randolph, Winthrop, Benton, Jackman, New Sharon, Oakland, Waterville and Wilton.

Not all municipalities responded to a recent inquiry, so check with yours if its name doesn’t appear here.

That's why he recently asked the Gardiner City Council to adopt an ordinance allowing those serving out of state for more than 180 days to get an exemption from paying the vehicle excise tax.

"I gave them basically the reasoning that it lets these kids in the military know that the town truly honors what they are doing and the commitment of what they are doing," said Rapalus, whose son, also named Robert, is in upstate New York as part of his Navy training.

On Jan. 1, a state law took effect allowing cities and towns to adopt ordinances to grant the exemption, which applies to anyone serving in the armed forces, National Guard or reserves.

An informal sampling conducted showed that at least 14 of 56 central Maine towns have adopted the ordinance so far. City managers in Augusta and Hallowell said it has not been presented to their councils for consideration, but it has been in effect in Waterville since April and was enacted in Oakland earlier this year.

In Gardiner, where the ordinance takes effect Friday, Tax Collector Kathleen Cutler said two people have visited her office to claim the exemption. She said it's difficult to estimate the fiscal effect the exemption will have on the city. The tax is based on the year and type of vehicle, so it's different for each person. She estimates 10 to 20 people may use it each year, which would cost the city about $2,000.

The legislation, which was sponsored by Rep. Mark Eves, D-North Berwick, was designed to make existing state law consistent. There was already a law on the books exempting those in the military from the excise tax when they are based in Maine, and Eves wanted to allow Maine residents who serve outside the state to qualify as well, according to written testimony presented to the Taxation Committee.

The law passed in 2011 but didn't take effect until this year. It was a low-key bill with no floor debate, but it was opposed by the Maine Municipal Association at the public hearing.

In written testimony, Geoff Herman of the municipal association said that in general, "municipalities are not supportive of tax exemptions." He raised questions about whether the exemption would apply to just one vehicle per family and asked the state to provide an estimate of how many vehicles would be exempt each year.

Many of those same concerns were repeated in June at the annual Town Meeting in Vassalboro, where residents rejected the ordinance. While those who spoke expressed support for the military, they worried about the cost and the number of vehicles that would be considered exempt.

"The townspeople didn't feel enough of their questions were answered well, so they voted it down," Town Manager Mary Sabins said.

In Waterville, where the ordinance took effect April 8, Tax Collector Linda Cote said one person has qualified for the exemption, and another applied but did not qualify.

Rapalus, a retired Navy maintenance officer, said he hopes the exemption will let members of the military know they are welcome in Maine.

He hopes his son, a Gardiner High School graduate who is 26, returns to his hometown when he completes his Navy obligation.

"We have a huge exodus of young workers out of the state," he said. The exemption "just tries to reinforce the relationship of the residency and the town. It seems like the right thing to do."

Susan Cover -- 621-5643

scover@mainetoday.com

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