Maine Sales and Use Tax: Rates, Taxed Services, and Exemptions

Maine’s sales and use tax is a 5.5% charge on most retail goods and taxable services, with higher rates of 8% on prepared food and liquor served on premises and 9% on short-term lodging. The use tax applies at the same rates when you buy something for use in Maine but the seller doesn’t collect Maine tax at checkout. Maine Revenue Services administers both, and a major change took effect on January 1, 2026: the separate Service Provider Tax was repealed, and the services it covered now fall under the standard sales and use tax.1Maine Revenue Services. Notice to Service Provider Tax Accounts

The Three Rates and What They Cover

The 5.5% baseline rate applies to tangible personal property and taxable services sold at retail.2Maine State Legislature. Maine Code Title 36 – Sales Tax Tangible personal property is defined broadly: anything that can be seen, weighed, measured, felt, or touched, plus electricity, non-custom computer software, and products transferred electronically.3Maine State Legislature. Maine Code Title 36 Section 1752 – Definitions For a consumer, that means clothing, electronics, furniture, appliances, and most everyday purchases.

Two categories carry higher rates, both in place since October 2019:4Maine Revenue Services. Sales and Use Tax Rates and Due Dates

  • 8% on meals, drinks, and liquor sold at restaurants, bars, and other places licensed for on-premises consumption.
  • 9% on short-term rentals at hotels, motels, vacation rentals, and similar lodging.

Services Now Taxed After the 2026 Repeal

Before January 2026, Maine ran a separate Service Provider Tax with its own registration and reporting. It was repealed, and the services it covered are now taxed at the regular 5.5% sales and use rate.1Maine Revenue Services. Notice to Service Provider Tax Accounts Those services include:

  • Telecommunications services and ancillary telecom services
  • Cable and satellite television or radio
  • Fabrication services, where an item is custom-made for a buyer
  • Installation, maintenance, or repair of telecommunications equipment
  • Digital audiovisual and digital audio services
  • Rental of video media and video equipment
  • Rental of furniture, audio media, and audio equipment under a rent-to-own agreement

If you only held a Service Provider Tax account, you need a sales and use tax registration now. Maine Revenue Services sent notices to affected businesses in late 2025, but anyone who missed the transition should register through the Maine Tax Portal to avoid filing gaps.

What’s Exempt

Grocery Staples

Food ordinarily consumed for human nourishment qualifies as a “grocery staple” and is exempt.5Maine Legislature. Maine Code Title 36 Section 1760 – Exemptions Flour, produce, meat, dairy, and canned goods leave the store untaxed when they’re unprepared. The exemption ends where preparation begins. Sandwiches, salads made by the retailer, bakery items ready to eat, and anything else sold ready to eat without further cooking is “prepared food” and taxed at 8%.6Maine Revenue Services. Instructional Bulletin – Retailers of Food Products

Prescription Medicines and Medical Devices

Prescription medicines sold on a doctor’s prescription are exempt. So are prosthetic and orthotic devices ordered by a licensed health care practitioner, and crutches and wheelchairs for sick, injured, or disabled persons when purchased for use rather than rental.5Maine Legislature. Maine Code Title 36 Section 1760 – Exemptions

Resale and Manufacturing

Goods bought for resale aren’t taxed at purchase, so the same item isn’t taxed at every step of the supply chain. The buyer must hold a valid resale certificate issued by Maine Revenue Services and provide a copy to the seller. Once the seller has it on file, the buyer doesn’t need to present it again during the certificate’s valid period.7Maine Legislature. Maine Code Title 36 Section 1754-B – Registration of Sellers Certain industrial materials and fuels used directly in manufacturing are also exempt.

Casual Sales Between Individuals

One-off sales between private individuals are generally not taxable. The important exception: casual sales of motor vehicles, watercraft, aircraft, trailers, truck campers, and special mobile equipment are taxable even between private parties.8Maine State Legislature. Maine Code Title 36 Section 1764 – Tax Against Certain Casual Sales and Rentals Buy a used car from your neighbor, and use tax applies.

When You Owe Use Tax

Use tax covers the gap: you bought something for use in Maine, but no Maine sales tax was collected. The rate matches the sales tax (5.5%, 8%, or 9% depending on the category).9Maine State Legislature. Maine Code Title 36 Section 1861 – Imposition The classic trigger is an online purchase from an out-of-state retailer that doesn’t collect Maine tax, though marketplace facilitator rules have shrunk that category.

Individuals report use tax on their Maine income tax return. If you haven’t tracked every small purchase, you can estimate by multiplying your Maine adjusted gross income by 0.04%. Any single item costing $1,000 or more has to be reported separately at its actual purchase price, not folded into the estimate. Businesses track all untaxed purchases in their records and report them on their regular sales tax returns.

Already paid sales or use tax to another state on the same purchase? Maine credits you for it. You owe only the difference. If the other state’s rate matched or exceeded Maine’s, you owe nothing more.10Maine State Legislature. Maine Code Title 36 Section 1862 – Sales or Use Tax Paid to Another Jurisdiction

Remote Sellers and Marketplaces

An out-of-state seller with no physical presence in Maine must register, collect, and remit if gross revenue from sales delivered into Maine exceeds $100,000 in the current or previous calendar year.7Maine Legislature. Maine Code Title 36 Section 1754-B – Registration of Sellers The threshold uses gross sales, not net after returns or discounts.

Marketplace facilitators like Amazon, eBay, and Etsy are treated as the retailer for sales they facilitate. They register with Maine Revenue Services and collect tax on all tangible personal property and taxable services delivered into Maine, including sales by third-party sellers on their platform. The same $100,000 threshold applies, and the facilitator’s calculation includes both its own direct sales and the sales it facilitates for others.11Maine Revenue Services. Marketplace FAQ

If you sell only through a registered marketplace and have no physical presence in Maine, you generally don’t need your own Maine registration, provided the facilitator gives you written confirmation it’s collecting the tax. Sell both through a marketplace and through your own website, and you have to register independently.

Registering and Filing

Any business making taxable sales in Maine must register with Maine Revenue Services before its first sale. Registration runs through the Maine Tax Portal under “Register a New Business.”12Maine Revenue Services. Sales, Use, and Service Provider Tax FAQ You’ll need a Federal EIN (sole proprietors can use their Social Security Number), the legal business name and any DBAs, the entity type, your business address and a description of activities, and your start date, which sets when your first return is due. Changes to address, ownership, or officer information after registration have to be reported to Central Registration.13Maine Revenue Services. Maine Revenue Services Registration Application

Filing frequency depends on how much tax you collect. Maine Revenue Services assigns one of four schedules based on average monthly liability:14Maine Revenue Services. Chapter 304 – Sales and Use Tax Returns and Payments

  • Monthly for liability of $600 or more per month (the default for retailers unless a lower frequency is assigned)
  • Quarterly for liability between $100 and $600 per month
  • Semiannual for liability under $100 per month but more than $50 per year
  • Annual for liability under $50 per year

You file through the Maine Tax Portal by entering gross sales and taxable sales for the period; the portal calculates what you owe. Payment is by ACH debit or credit card, with credit card payments typically carrying a third-party processing fee. Save the confirmation number the portal generates after submission — it’s your proof of timely filing if questions come up later.

Penalties and Personal Liability

Late filing and late payment penalties stack quickly under Title 36, §187-B:15Maine State Legislature. Maine Code Title 36 Section 187-B – Penalties

  • Return filed before or within 60 days of a formal demand: the greater of $25 or 10% of the tax due
  • Return still not filed 60 days after formal demand: the greater of $25 or 25% of the tax due
  • Late payment: 1% of the unpaid tax for each month or fraction of a month late, up to a 25% maximum

These apply when the return’s liability exceeds $25. Interest accrues on the unpaid tax, though not on the penalty amount.

The provision that catches owners off guard is the trust fund rule. Every dollar of sales tax you collect from a customer is held in trust for the State Tax Assessor under Title 36, §177 and belongs to the state, not your business.16Maine Legislature. Maine Code Title 36 Section 177 – Trust Fund Status of Certain Collections If the business fails to remit, personal liability extends to any officer, director, member, agent, or employee who controlled finances or was responsible for paying taxes. The state has six years from the return’s filing date to assess that personal liability. If no return was ever filed, there’s no time limit at all. Using collected sales tax to cover operating expenses during a cash crunch turns a corporate debt into a personal one.

Recordkeeping

Vendors must keep all records supporting their returns for at least six years from the return’s due date or the date it was actually filed, whichever is later. Maine Revenue Services can require longer retention in some situations.17Maine Revenue Services. Recordkeeping Requirements for Sales Tax Vendors Records means receipts, invoices, purchase orders, exemption certificates, register tapes, and accounting journals. If an auditor asks for documentation on a deduction or exemption you claimed and you can’t produce it, expect the exemption to be disallowed and the tax, penalties, and interest assessed on the deficiency.