Portland, Maine’s Disposable Bag Fee: Guilt-Inducing or Inspirational?
- Sales Tax News
- Jul 2, 2015 | Gail Cole
How does a city encourage the use of reusable bags? By imposing a fee on disposable bags, of course. So that’s what Portland, Maine did on April 15, 2015, joining approximately 150 other localities around the country.
Proponents of the Reusable Bag Ordinance hope the five-cent bag fee will raise awareness and reduce waste. In announcing the program, the City of Portland provided several good reasons to use reusable bags:
- “Shopping with a reusable bag is an effective way to reduce your environmental footprint.”
- Discarded bags represent “a waste of natural resources” and reinforce “’throw away’ habits rather than conservation.”
- "Plastic bags are very problematic sources of litter."
For some, bringing bags to the grocery store has become second nature. When bags are forgotten or unavailable due to the spontaneous nature of a shopping trip, the bag charge is a reminder to be more vigilant in the future.
For others, such fees go largely unnoticed and don’t impact behavior at all. That’s why many cities charge higher fees, 10-cents and even 25-cents per bag, as in Capitola, California. The higher the fee, the more likely it is to impact behavior.
Hand-picked reusable bag ordinance FAQs
Not all disposable bags are subject to the fee. Those used “to carry goods to the point of sale,” such as the bags in the produce aisle, are exempt. Also exempt are bags provided by pharmacists for prescription drugs.
Not all stores must impose the fee. Restaurants are exempt, as are stores “at which the sale of food items makes up less than 2% of gross sales.” However, the following must impose the fee:
- Convenience stores
- Gas stations
- Grocery stores
- Pharmacies and other vendors selling food item
The skinny on sales tax
At the outset, the 5-cent bag fee was subject to sales tax. However, the enactment of LD 590 exempts the fee from the taxable sale. The fee—taxable from April 15 through June 8, 2015—became exempt from sales tax on June 9, 2015.
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