As an e-commerce seller, you will need to collect sales tax in Maine if you have:
(1) Gross sales exceeding $100,000 in the previous calendar year or current calendar year (economic nexus), or
(2) Physical presence in Maine (physical nexus).
Below, we will highlight some of the basic provisions of Maine sales tax law.
What is the tax rate range for Maine?
State: Maine’s general sales tax rate is 5.5%. Maine has different rates for prepared food, auto rentals, lodging, and marijuana. In addition, Maine imposes a 6% services provider tax on certain services. Maine Sales and Use Tax Rates
Local: Maine does not have local sales tax jurisdictions.
Do you have physical or economic nexus in Maine?
Physical nexus. Certain business activities create physical nexus in Maine. If you have physical nexus, you are required to collect and remit sales tax on all taxable sales that are shipped to Maine. Examples of business activities that can create physical nexus in Maine include:
- Maintaining a place of business in Maine, including any office, manufacturing facility, distribution facility, warehouse or storage facility, or sales or sample room
- Making retail sales in Maine, or soliciting orders for such sales through salespeople in Maine. “Salespeople” includes employees as well as any persons who act as representatives, solicitors, salespersons, or independent selling agents for the seller.
- Leasing tangible personal property that is located in Maine. A lessor is engaged in making retail sales in Maine when it executes a “lease in lieu of purchase” in Maine, accepts a lessee’s option to purchase in Maine, or sells previously rented property in Maine.
- Delivery of tangible personal property by the seller into Maine by means of the seller’s own vehicles, or by means of a third-party carrier other than an interstate common carrier.
- Repair or installation of tangible personal property by the seller’s own employees or by a third party contracted by the seller.
Part 1 and 2 of INSTRUCTIONAL BULLETIN NO. 43
Economic nexus. Maine recognizes economic nexus for any vendor with more than $100,000 in gross sales in Maine of tangible personal property or taxable services in the previous calendar year or current calendar year. Once you have economic nexus established, you will be obligated to collect sales tax from buyers in the state.
- Gross sales do not include a remote seller’s sales made through a marketplace
- Gross sales for marketplace facilitators include sales facilitated on behalf of marketplace sellers and direct sales made by the marketplace facilitator
- Remote sellers and marketplace facilitators must register and begin collecting by the 1st of the month that is 30 days after exceeding the threshold. For example, a remote seller that exceeds the threshold on May 15 is required to register and collect on July 1.
What are examples of sales of taxable items?
- Tangible personal property, unless an exemption applies
- Specific services
- Products transferred electronically
- Prepared food (tax rate is 8%)
- Home appliances
- Motor vehicles
What are examples of sales of nontaxable/exempt items?
- Most services, unless specifically subject to tax or the service provider tax
- Grocery staples for human consumption
- Prescription drugs (does not include medial cannabis)
- Certain medical equipment and supplies
- Software as a Service (SaaS)
Are there any sales tax holidays?
Currently, Maine does not recognize and sales tax holidays
Is Maine a member of the SST (Streamlined Sales Tax)?
Currently, Maine is not a full or associate member of the Streamlined Sales Tax (SST) project.
How to get a sales tax permit / links to register in this state?
You can register online at: Maine Revenue Services - Tax Portal
Maine is a one-rate state but has different rates based on the product or service sold. Maine Sales and Use Tax Rates & Due Dates Table