Maine Car Sales Tax: Rate, Trade-Ins, and Exemptions

Maine car sales tax is 5.5% of the purchase price, whether you buy from a dealership or a private seller. The taxable amount is reduced by any trade-in value, but not by manufacturer rebates. There is no local add-on, so the rate is the same in every town.

The 5.5% Rate

Maine imposes the 5.5% tax on motor vehicle sales under Title 36, Section 1811 of the Maine Revised Statutes.¹ The rate applies to dealership and private-party sales alike. On a $25,000 vehicle, that comes to $1,375. On a $40,000 vehicle, $2,200.

The math is simple. What changes the number you actually pay are the adjustments to the taxable amount.

What Reduces the Taxable Price, and What Doesn’t

Trade-Ins Reduce It

Trade in a vehicle toward the purchase of another and the trade-in value is subtracted from the sale price before tax is calculated. Buy a $30,000 car, trade your old one in for $10,000, and you pay 5.5% on $20,000. That’s a $550 savings.²

The trade-in has to be in the same category as the vehicle you’re buying. Car for car works. Boat traded toward a car does not.

Manufacturer Rebates Don’t

Rebates from the manufacturer do not reduce the taxable price. Even when the dealer applies the rebate directly to your purchase, Maine treats it as a payment method, not a price cut. A $30,000 vehicle with a $3,000 manufacturer rebate is still taxed on the full $30,000.³

Lowballing a Private Sale Doesn’t Work

When you register a vehicle bought from a private seller, Maine Revenue Services can review whether the price on your bill of sale looks reasonable. If the state decides the price was understated, it can assess additional use tax plus interest and penalties.⁴ Keep the stated price honest and hold on to documentation of what you actually paid.

Buying a Vehicle Out of State

Crossing a border to buy doesn’t avoid the tax. If you bring the vehicle back to Maine and register it, you owe a use tax at the same 5.5%. Maine checks this at registration; you cannot get plates without either proof that a dealer collected the tax or payment of the use tax through a use tax certificate.⁵

This hits New Hampshire shoppers in particular. New Hampshire has no sales tax, so the sticker looks friendlier, but the 5.5% arrives when you register the car in Maine. If you did pay sales tax to another state on the same vehicle, you may be entitled to a credit against the Maine use tax for the amount already paid. Ask at the registration office and bring proof of what you paid elsewhere.

Leases

Since January 1, 2025, Maine collects the 5.5% on each monthly lease payment rather than on the full vehicle value up front. On a $400 base monthly payment, expect to add $22 in sales tax each month.⁶

Short-term rentals of automobiles for less than one year are taxed at a higher 10% rate, so a weekend rental car carries a steeper rate than a multi-year lease.¹

When You Owe No Sales Tax

Genuine Gifts

A bona fide gift, where no money changes hands, is not a sale, and no sales tax applies. This comes up most often with family transfers. You’ll still need to show at the registration office that the vehicle was a genuine gift and that no payment was made. If the state decides the “gift” was a disguised sale, the full use tax plus penalties can be assessed.

Nonresidents

If you aren’t a Maine resident and buy a vehicle in the state, you’re exempt from the sales tax as long as you take the vehicle out of state immediately after the seller delivers it. The catch: if the vehicle returns to Maine within the first 12 months after purchase, you may owe use tax on the original purchase price.⁴

Qualifying Nonprofits

Organizations with federal 501(c)(3) status, along with certain other qualifying groups, can purchase vehicles free of sales tax by presenting a Maine exemption certificate at the time of purchase. The vehicle must be used primarily in the exempt activity. A van for a charity’s meal delivery program qualifies; a vehicle used mainly for personal errands by a board member does not.⁷

Adaptive Equipment

Equipment installed in or on a vehicle to make it operable or accessible for a person with a disability is exempt. The buyer must hold a disability plate or placard issued by the Secretary of State. The exemption covers the adaptive equipment, not the vehicle itself.⁸

How You Actually Pay It

At the Dealer

A licensed Maine dealer is required to collect the 5.5% at the point of sale, remit it to the state, and send you off with temporary plates. You don’t handle the tax separately at a registration office, and the dealer has no option to let you pay later.⁴

At Registration

If you buy from a private party or an out-of-state dealer, you handle the tax yourself when you register. Bring a signed bill of sale to a Bureau of Motor Vehicles office or your town’s municipal office. The clerk calculates the 5.5% use tax from the purchase price, and you pay it along with your title and registration fees before plates are issued.⁹ You’ll also complete a use tax certificate.

The Other Charges at Registration

Sales tax is the biggest line, but not the only one. A title application for vehicles 25 years old or newer costs $33.¹⁰ Standard passenger registration is $35 per year.¹¹

Separate from all of this, every Maine vehicle owner pays an annual municipal excise tax to their town before registering each year. Excise is based on the vehicle’s original MSRP, not what you paid, and the mill rate drops as the vehicle ages, starting at 24.0 mills in year one and falling to 4.0 mills by year six.¹² For a vehicle with a $35,000 MSRP, that’s $840 in the first year. It’s a different tax from the 5.5% sales tax covered here, but it’s the other number you’ll see on your first registration bill.

If You Return the Vehicle

A full refund of the purchase price gets you a full refund of the sales tax. Partial refunds are trickier: tax generally isn’t refundable on a partial return unless the refund is made under the terms of a warranty, in which case the tax on the refunded portion comes back to you.³

1
Maine State Legislature. Maine Code Title 36 – Sales Tax
2
Maine State Legislature. Maine Code Title 36 1765 – Trade-In Credit
3
Maine Revenue Services. Instructional Bulletin No. 24 Vehicle Dealers
4
Maine Revenue Services. Instructional Bulletin No. 42 – Registration of Vehicles – Taxable and Exempt
5
Maine Legislature. Maine Code 29-A 409 – Collection of Taxes
6
Maine Revenue Services. Notice to Lessors of Tangible Personal Property
7
Maine Revenue Services. Maine Sales Tax Exempt Organizations
8
Maine Legislature. Maine Code Title 36 1760 – Exemptions
9
Maine Secretary of State. Register A Passenger Vehicle
10
Maine Secretary of State. Title Fees
11
Maine Secretary of State. Registration Fees
12
Maine Revenue Services. Excise Tax