Maine’s sales tax on cars is 5.5% of the sale price, and it applies statewide whether you buy from a dealer or a private seller. There are no local or county add-ons, so the rate is the same in Portland, Bangor, or Presque Isle. The tax is set under Title 36, Section 1811 and has been at 5.5% since October 1, 2019.1Maine State Legislature. Maine Code Title 36 Section 1811 – Sales Tax What changes from one buyer to the next is how the taxable amount is calculated and when you actually hand over the money.
How a Trade-In Lowers the Tax
If you trade a vehicle in at a dealership, Maine taxes only the difference between the new vehicle’s sale price and the trade-in allowance. Buy a car for $30,000 and get $10,000 for your trade, and you pay 5.5% on $20,000. That is a $550 savings compared with paying tax on the full price. The credit comes from Title 36, Section 1765.2Maine State Legislature. Maine Code Title 36 Section 1765 – Trade-In Credit
Two conditions matter. The traded item and the purchased item have to be in the same category, so you cannot trade a boat toward a car and claim the credit. And the trade has to happen as part of the same transaction.2Maine State Legislature. Maine Code Title 36 Section 1765 – Trade-In Credit
Buying From a Private Seller
The 5.5% still applies when you buy from a private individual, but no one collects it at the sale. You pay it as use tax when you register the car, using a Use Tax Certificate (Form STMV6U) that goes to the registering agent.3Maine Revenue Services. Instructional Bulletin 42 – Registration of Vehicles Bring a signed bill of sale showing the price, both parties’ names and signatures, and the vehicle details.4Maine.gov. Motor Vehicle Bill of Sale
Maine usually accepts the negotiated price as the taxable amount. If the reported price is undocumented or looks inconsistent with what the vehicle is actually worth, Maine Revenue Services can tax you on fair market value instead.3Maine Revenue Services. Instructional Bulletin 42 – Registration of Vehicles Writing a suspiciously low number on the bill of sale to shave the tax is the kind of shortcut that tends to backfire.
Gifts and Family Transfers
Passing a car to a family member does not automatically avoid the tax. Maine Revenue Services is direct on this point: the fact that the parties are related or married does not, by itself, change whether a taxable sale has occurred.3Maine Revenue Services. Instructional Bulletin 42 – Registration of Vehicles
What matters is whether any consideration changed hands. A true gift, where the recipient pays nothing, assumes no loan, and provides nothing in return, is not a taxable sale. A parent handing a car to a child with no strings attached owes no tax. But if the child takes over the remaining loan balance, that assumed debt counts as consideration, and use tax applies to that amount. Equity transfers between spouses under a court-ordered divorce decree are also not taxable.3Maine Revenue Services. Instructional Bulletin 42 – Registration of Vehicles
Cars Bought Out of State or Brought Into Maine
Buy a car in another state and bring it home, and you owe Maine use tax at the same 5.5% rate. Use tax exists so that crossing a state line to shop does not sidestep sales tax.5Maine Revenue Services. Use Tax Certificate
Maine credits you for sales or use tax already paid to another state. If you paid a 6% tax somewhere else, you owe Maine nothing more. If you paid less, you pay the difference. Attach a copy of the bill of sale or receipt showing the tax paid when you submit the Use Tax Certificate at registration.3Maine Revenue Services. Instructional Bulletin 42 – Registration of Vehicles
People moving to Maine get a separate break. If you purchased and used the vehicle while you were a permanent legal resident of another state, no Maine use tax applies. “Permanent” is the operative word. You had to actually live there when you bought the car, not simply be passing through.5Maine Revenue Services. Use Tax Certificate
Leases
Maine changed how it taxes vehicle leases on January 1, 2025. For long-term leases of a year or more, the taxable value is the total monthly payment multiplied by the number of payments, plus trade-in equity and any cash down payment. The full sales tax on that total is due in the month the lease starts, not spread across monthly bills.6Maine Revenue Services. Notice to Lessors of Tangible Personal Property
That upfront bill catches people off guard. A 36-month lease at $400 a month has a taxable base of at least $14,400 before any down payment or trade equity, and 5.5% of that runs close to $800 due at signing. Short-term automobile rentals under a year face a higher 10% rate instead.1Maine State Legislature. Maine Code Title 36 Section 1811 – Sales Tax
The Annual Excise Tax Is Separate
Do not confuse the one-time 5.5% sales tax with Maine’s annual excise tax. The excise tax is a yearly charge paid to your local town office before you can register or renew, and it is calculated from the vehicle’s original MSRP times a mill rate that steps down as the car ages. A first-year vehicle with a $35,000 MSRP owes $840 in excise; by year six, that drops to $140.7Maine Revenue Services. Excise Tax You will owe this every year you own and register the vehicle, on top of the sales or use tax paid once at purchase.
Electric Vehicles
Maine does not exempt EVs from the 5.5% sales tax. What it offers instead are purchase rebates through Efficiency Maine’s Off-Peak Charging EV Rebates program, which requires pairing the vehicle with an eligible off-peak Level 2 charger. For 2025 the rebates are $7,000 for a new EV bought by a low-income buyer, $5,000 for moderate-income buyers, and $3,000 for businesses and government. Used EV rebates run $3,000 for low-income buyers and $2,000 for moderate-income buyers, businesses, and government.8Alternative Fuels Data Center. Maine Laws and Incentives
A $1,000 bonus rebate is available to all participants through September 30, 2026. The car has to come from a participating Maine dealership or directly from the manufacturer. Price caps apply: $55,000 for most new vehicles, $80,000 for pickups and commercial vans, and $40,000 for used EVs. Leased vehicles do not qualify, and pre-approval with income verification is required.8Alternative Fuels Data Center. Maine Laws and Incentives
Where and How You Pay
Dealers in Maine typically collect the 5.5% at the time of sale and handle the registration paperwork for you. For private sales and out-of-state purchases, you pay the tax yourself when you register. That means two stops: your local town office to pay the annual excise tax, then either the same town office (if it issues registrations) or a Bureau of Motor Vehicles branch to complete registration and pay the use tax.9Maine Secretary of State. Register A Passenger Vehicle
Bring the signed bill of sale, a completed Use Tax Certificate (Form STMV6U) for non-dealer purchases, proof of insurance, and the excise tax receipt from the town office. If you are claiming credit for tax already paid to another state, include a copy of that receipt too.3Maine Revenue Services. Instructional Bulletin 42 – Registration of Vehicles You cannot register the vehicle before paying excise, so the town office visit is not optional.