Maine Sales Tax Rates

Total Range for 2024

5.5%

maine department of revenue services

Why do you need to collect sales tax in Maine?

If you’re selling goods and services in Maine then sales tax might apply! To determine your obligation, you need to understand “nexus,” which ties businesses to states for tax purposes.

Two types of nexus exist:

  1. Physical Nexus: Having a physical presence, like an office, warehouse, or employees in Maine, triggers this type. If you do, you likely need to collect sales tax.
  2. Economic Nexus: This kicks in when your sales within Maine exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.

Is what you’re selling taxable in Maine?

Now that you’ve grasped the basics of Maine’s sales tax and nexus thresholds, let’s delve into whether your specific products or services are taxable.

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How to register for sales tax in Maine

There are two ways to register for a sales tax permit in Maine:

  1. Online: This is the faster and recommended method.
  2. Paper Application:
    • Download the application forms from the Maine Revenue Services website
    • Fill them out and send them back

How to collect sales tax in Maine

Here’s how to collect sales tax in Maine:

  1. Determine Taxable Sales
  2. Charge the Correct Rate
  3. Collect the Tax:
  • Include the 5.5% sales tax in your product or service price during checkout.
  • Most Point-of-Sale (POS) systems can automate this calculation and collection.

4. Keep Records:

  • Maintain good records of your sales and the sales tax collected for each transaction.
  • This will be crucial when filing your sales tax returns.

5. File and Pay Sales Tax:

  • Maine Revenue Services offers various options for filing and paying sales tax:
    • Online: File through the Maine I-File system with online payment options.
    • Mail: Submit paper forms (ST-7) with a check or money order.
    • Third-Party Filers: Use a tax software provider that can handle filing for you.
Example:
  • Buying a $60 jacket in Maine with a 5.5% sales tax adds ($60 x 5.5%) = $3.30 in tax.
  • You’d pay $60 + $3.30 = $63.30 total.

FAQs

Do you have a physical nexus in Maine?

A business has a physical nexus in Maine, which requires them to register for and collect sales tax, if they have any of the following:

  • Physical Presence: 
    • A store, office, warehouse, or any other place of business in Maine.
    • Employees, salespeople, contractors, or other representatives who regularly work within Maine. This includes employees who work remotely in Maine for your business.
Do you have an economic nexus in Maine?

If your business makes more than $100,000 in total sales of taxable goods or services to Maine customers in a year, you likely have economic nexus and need to register for and collect Maine sales tax.

What is use tax in Maine?

In Maine, use tax acts as a counterpart to the sales tax. Here’s a breakdown of what it is and how it applies:

  • Purpose: Use tax ensures fairness in the sales tax system. It applies to purchases made for use in Maine, but where the seller did not collect sales tax at the time of purchase.
  • Who Pays It:
    • Maine residents who buy items out-of-state (including online) and bring them to Maine for use are liable for use tax.
    • Businesses that withdraw taxable goods from their inventory for their own use within Maine also owe use tax.
  • Use Tax Rate: The use tax rate in Maine is generally the same as the sales tax rate, which is currently 5.5%.
Do you need a seller/reseller permit?

In Maine, the terms “seller’s permit” and “reseller certificate” are actually two sides of the same coin for sales tax purposes. Here’s how it works:

  • Retailer Certificate: This is what you get when you register for a sales tax permit in Maine. It allows you to collect sales tax from your customers.
  • Resale Certificate: This is a certificate you can provide to your suppliers to exempt yourself from paying sales tax on purchases you intend to resell.  However, to get a resale certificate, you typically need to have an active retailer certificate (meaning you’re registered to collect sales tax).

So, in essence, you don’t directly apply for a “seller’s permit.”  Instead, you register for a retailer certificate, which grants you both the ability to collect sales tax and the ability to obtain a resale certificate for tax-exempt purchases.

How to get a sales tax permit/license in Maine?

Get your sales tax permit (retailer certificate) in Maine with these quick steps:

Online (Faster & Recommended):

  1. Head to the Maine Revenue Service’s website
  2. Look for the “Online Sales & Use…” registration service.
  3. Have your personal ID (SSN), business info (EIN), and business type handy.

By Mail (Takes Longer):

  1. Download the application forms from the same Maine Revenue Service website.
  2. Find the “For paper applications…” section.
  3. Fill out the forms and mail them in.
When are Maine's Returns Due?

Maine sales tax returns are due on the 15th day of the month following the reporting period. This applies regardless of whether you file monthly, quarterly, semiannually, or annually.

Here’s a breakdown for clarity:

  • Sold items in January: File and pay by February 15th.
  • Sold items in February: File and pay by March 15th, and so on.

Important Note: If the 15th falls on a weekend or holiday, the due date is typically the next business day.

How to file sales tax in Maine

There are several ways to file and pay your Maine sales tax:

  1. Online Filing (Recommended):

This is the fastest and most convenient method.  Here’s what you need to do:

  • Maine I-File System:
    • Visit the Maine Revenue Services website: https://www.maine.gov/revenue/
    • Look for the “Maine I-File” system and log in (you’ll need to register for an account if you haven’t already).
    • The system will guide you through the filing process and allow for online payment.
  1. Mail-in Filing:
  • Form ST-7:
    • Download and complete form ST-7 (Sales and Use Tax Return) from the Maine Revenue Services website:
    • Include your payment (check or money order) made payable to the “Treasurer, State of Maine.”
    • Mail both the completed form and payment to the address provided on the form.
  1. Third-Party Filers:

You can utilize a tax software provider (like us!) that can handle filing your Maine sales tax returns for you.  These services often come with a fee, but they can save you time and ensure accuracy.

Is anyone exempt from sales tax in Maine?

Exempt Customers:

  • The state of Maine does not offer a blanket exemption for all 501(c) nonprofits.
  • Only specific organizations qualify, such as hospitals, schools, churches, and libraries.
  • These organizations need to apply to Maine Revenue Services for an exemption certificate. They cannot simply claim exemption at the time of purchase.

Tax-Exempt Goods:

  • Maine exempts the sale of certain goods from sales tax, including:
    • Most groceries (excluding prepared food)
    • Prescription drugs and certain medical devices
    • Some clothing and footwear (exceptions may apply)

Contact Yonda Tax Today

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