ME AG Opinion 2019-03-19 2019-03-19

Could the Maine legislature let each municipality decide whether to exempt all personal property and business equipment from taxation, or did the state constitution require uniform statewide rules?

Short answer: AG Frey advised that LD 824 had significant constitutional problems. Article IX § 8 requires property taxes to be 'apportioned and assessed equally according to the just value thereof,' and the Maine Law Court has read that as a uniformity requirement going back to *Brewer Brick* (1873). Article IX § 9 says the legislature may not 'in any manner, suspend or surrender the power of taxation,' which Maine cases describe as a 'strong and sweeping prohibition' against delegation. Three prior AG opinions (1977, 1979, 1981) had reached the same conclusion. The bill, as drafted, would let one municipality exempt a class of property that another taxed, exactly the situation *Brewer Brick* disallowed.

Disclaimer: This is an official Maine Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed Maine attorney for advice on your specific situation.

Plain-English summary

Senator Pouliot asked whether LD 824 was constitutional. The bill would have let any Maine municipality "adopt an ordinance to exempt personal property from municipal assessment and collection of tax," with the requirement that any such exemption be uniform within the municipality and cover all personal property including business equipment.

AG Frey said the bill ran into two state constitutional problems. Article IX, Section 8 says all property taxes must be "apportioned and assessed equally according to the just value thereof." The Maine Law Court has read that as a two-part requirement: a valuation requirement and an apportionment (uniformity) requirement, citing Eastler v. State Tax Assessor (1985), Opinion of the Justices (2004), and Delogu v. City of Portland (2004). The lead case is still Brewer Brick Co. v. Inhabitants of Brewer, an 1873 decision the Law Court has continued to cite. There, a Maine statute allowed towns to grant 10-year property tax exemptions to new industries. The Law Court struck the statute down because it could result in one municipality exempting a class of property that other municipalities still taxed. LD 824 created the same risk on a much larger scale.

Article IX, Section 9 added a second constitutional barrier: "The legislature shall never, in any manner, suspend or surrender the power of taxation." The Law Court has called this language a "strong and sweeping prohibition" against delegation of the taxing power. Greaves v. Houlton Water Co. (1948) said: "Taxation is legislative. What money shall be raised by taxation, what property shall be taxed, what exempted, rests exclusively with the Legislature to say." A 1963 Opinion of the Justices said the legislature could let municipalities tax local trades and grant local exemptions to such taxes, but explicitly carved property taxes out of that flexibility because of Article IX § 8.

Frey closed by noting his concerns matched three prior AG opinions (Feb. 2, 1977; April 23, 1979; April 7, 1981) that had reached the same conclusion. The opinion did not formally pronounce LD 824 unconstitutional, but warned that defending it in court would be very difficult.

Currency note

This opinion was issued in 2019. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Maine has continued to refine its property tax framework, particularly around the Business Equipment Tax Reimbursement (BETR) and Business Equipment Tax Exemption (BETE) programs that operate within constitutional uniformity. Anyone evaluating a current property-tax-relief proposal should consult the present versions of Title 36 and the Maine Constitution.

Historical summary

For state legislators (at the time): The opinion was a strong signal that LD 824 would not survive judicial review. The path to local property-tax flexibility ran through statewide statutory exemption programs that apply uniformly, not through letting each municipality opt out.

For municipal assessors (at the time): A municipality could not unilaterally exempt personal property even if state legislation purported to authorize it, because the constitutional uniformity rule operates as a state-level constraint.

For statutory construction researchers: The opinion is a worked example of how the Maine Law Court's pre-Civil War uniformity precedents continue to control modern delegation questions, and how the AG harmonizes 1870s case law (Brewer Brick) with 21st-century decisions (Delogu).

Citations and references

Constitutional provisions:
- Maine Constitution, Article IX, Section 8 (uniformity)
- Maine Constitution, Article IX, Section 9 (no surrender of taxing power)

Cases:
- Brewer Brick Co. v. Inhabitants of Brewer, 62 Me. 62 (1873)
- Eastler v. State Tax Assessor, 499 A.2d 921 (Me. 1985)
- Opinion of the Justices, 2004 ME 50, 850 A.2d 1145
- Delogu v. City of Portland, 2004 ME 18, 843 A.2d 33
- Dolloff v. Gardiner, 148 Me. 176, 91 A.2d 320 (1952)
- Opinion of the Justices, 159 Me. 420, 191 A.2d 627 (1963)
- Greaves v. Houlton Water Co., 143 Me. 207, 59 A.2d 217 (1948)

Source

Landing page: https://www.maine.gov/legis/lawlib/lldl/agops/agops.htm
Original PDF: https://lldc.mainelegislature.org/Open/AG/Opinions/2019/ag_20190319.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

STATE OF MAINE
OFFICE OF THE ATTORNEY GENERAL
6 STATE HOUSE STATION
AUGUSTA, MAINE 04333-0006
AARON M. FREY, ATTORNEY GENERAL

March 19, 2019

BY HAND-DELIVERY

Senator Matthew Pouliot
3 State House Station
Augusta, ME 04333-0003

RE: LD 824, "An Act to Allow a Municipality to Opt Out of Collecting Personal Property and Business Equipment Taxes"

Dear Senator Pouliot:

You have asked whether our office has any concerns regarding the constitutionality of LD 824, "An Act to Allow a Municipality to Opt Out of Collecting Personal Property and Business Equipment Taxes," particularly with regard to Article IX, Sections 8 and 9 of the Maine Constitution. LD 824 would allow each municipality in the State to "adopt an ordinance to exempt personal property from municipal assessment and collection of tax." Any exemption so adopted by a municipality under the bill "must be uniform and include all personal property including business equipment." Based on our analysis of the bill and relevant Law Court decisions, we have significant concerns about the constitutionality of LD 824. Our concerns with LD 824 are consistent with three prior opinions of this office, in which we concluded that the Legislature may not delegate to all municipalities the power to determine property tax exemptions. See Op. Me. Att'y Gen. (Feb. 2, 1977); Op. Me. Att'y Gen. 79-74 (April 23, 1979); and Op. Me. Att'y Gen. 81-35 (April 7, 1981) (opinions enclosed).

Article IX, Section 8. The central legal problem presented by LD 824 results from its conflict with the requirements of Article IX, Section 8 of the Maine Constitution. Section 8 requires in pertinent part: "All taxes upon real and personal estate, assessed by authority of this State, shall be apportioned and assessed equally according to the just value thereof." The Law Court has described this provision as establishing two requirements for a valid property tax: a valuation requirement and an apportionment requirement. Eastler v. State Tax Assessor, 499 A.2d 921, 924 (Me. 1985); see also Opinion of the Justices, 2004 ME 50, 850 A.2d 1145; Delogu v. City of Portland, 2004 ME 18, 843 A.2d 33.

The leading Maine case on the apportionment requirement is Brewer Brick Co. v. Inhabitants of Brewer, 62 Me. 62 (1873). In that case, the Town of Brewer had voted to exempt a brick manufacturing company from property taxation for a period of 10 years. The town's vote was specifically authorized by a statute permitting towns to grant 10-year exemptions from property taxes to new industries. R.S. ch. 6, § 6 (1871). A year later the town changed its position and assessed a property tax. The company sued to recover the property tax claiming it was entitled to nine more years of exemption from property taxes pursuant to the statute.

The Law Court held that the statute was unconstitutional because (1) it approved taxation for private purposes, and (2) it violated Article IX, Section 8. The Court's holding with respect to Article IX, Section 8 was predicated on its concern that the statute could result in one municipality exempting a class of property that would be taxable in other municipalities. See Brewer Brick, 62 Me. at 74. Although Brewer Brick was decided 146 years ago in 1873, it is still good law. See Delogu v. City of Portland, 2004 ME 18, ¶¶ 23-25, 843 A.2d 33.

In short, based on Brewer Brick and more recent Law Court decisions, we have significant concerns about our ability to successfully defend the bill if it were enacted and its constitutionality were challenged in court. See Dolloff v. Gardiner, 148 Me. 176, 183-184, 91 A.2d 320, 323 (1952); see also Opinion of the Justices, 159 Me. 420, 428-429, 191 A.2d 627, 632-633 (1963).

Article IX, Section 9. We also have concerns about the bill's potential conflict with Article IX, Section 9, which provides: "The legislature shall never, in any manner, suspend or surrender the power of taxation." The Law Court has repeatedly "construed this language as creating a 'strong and sweeping prohibition' against delegation of the legislature's power to tax." Delogu, 2004 ME 18, ¶ 40, 843 A.2d 33 (internal quotations omitted). The Law Court emphasized that:

[t]axation is legislative. What money shall be raised by taxation, what property shall be taxed, what exempted, rests exclusively with the Legislature to say, without any limitations, except such as are imposed by express constitutional provision.

Greaves v. Houlton Water Co., 143 Me. 207, 211, 59 A.2d 217, 219 (1948).

In a 1963 Opinion of the Justices, the Justices stated that the Legislature (1) "may constitutionally grant the right to a municipality to levy a tax upon persons carrying on or exercising within such municipality any trade, business, profession, vocation or commercial activity measured by the gross receipts or gross income from such activities" and (2) "may grant the right to a municipality to specify by reasonable classifications exemptions from such tax." Opinion of the Justices, 159 Me. 420, 428-429, 191 A.2d 627, 632-633 (1963). The Opinion made clear, however, that the Justices' approval of this delegation of the right to a municipality to craft tax exemptions did not apply to property taxes in light of Article IX, Section 8. See id.

Thus, in light of Article IX, Sections 8 and 9, and the Law Court's interpretation of those provisions, we are concerned that the Law Court may conclude that LD 824 runs afoul of the Constitution's prohibition against "surrendering" the power of taxation.

I hope that this information is useful. Please let me know if you have further questions.

Sincerely,

Aaron M. Frey
ATTORNEY GENERAL

AMF/lsf
Enclosures
cc: Senator Benjamin Chipman, Senate Chair Taxation Committee
Representative Ryan Tipping, House Chair Taxation Committee