Maine taxes personal income on a three-bracket schedule running from 5.8% to 7.15%, charges a 5.5% statewide sales tax (with higher rates on lodging, prepared food, and short-term vehicle rentals), lets municipalities assess and collect property tax at locally set mill rates, taxes corporate income up to 8.93%, and imposes its own estate tax on estates above $7,160,000 for 2026 deaths. Maine Revenue Services administers most of this; cities and towns run property tax on their own.
Individual Income Tax Rates
For tax year 2025, a single filer pays 5.8% on taxable income up to $26,800, 6.75% from $26,800 to $63,450, and 7.15% above $63,450. Married couples filing jointly get wider brackets: 5.8% on the first $53,600, 6.75% up to $126,900, and 7.15% above that. Head-of-household thresholds sit between the two, at $40,200 and $95,150. The bracket cutoffs are adjusted each year for inflation under 36 M.R.S. § 5403.1Maine Revenue Services. Individual Income Tax 2025 Rates
Maine has its own standard deduction, separate from the federal one. For 2025 it is $15,000 for single filers, $30,000 for joint filers, and $22,500 for head of household. There is also a $5,150 personal exemption per qualifying person, which phases out at higher incomes.1Maine Revenue Services. Individual Income Tax 2025 Rates
Who Has to File
Full-year residents owe Maine tax on all income no matter where it was earned. Part-year residents and nonresidents owe tax only on income sourced to Maine, such as wages for work done in the state, rent from Maine property, or profits from a Maine business.2Maine Revenue Services. Individual Income Tax 1040ME
Residency isn’t just about where you say you live. If you keep a permanent home in Maine and spend more than 183 days in the state during the year, Maine can treat you as a statutory resident even if you claim domicile somewhere else. People in that situation should keep records showing where they actually were.3Legal Information Institute. 18-125 CMR ch 807 – Statutory Residency
Everyone who owes Maine income tax files Form 1040ME by April 15 following the close of the tax year.4Maine Revenue Services. Individual Income Tax Forms – 2025
How Maine Taxes Retirement Income
Military retirement pay, including survivor benefits paid under a military retirement plan, is fully exempt from Maine income tax. There is no cap and no phaseout.5Maine Revenue Services. 2025 Income Tax Instructions
Other pension and retirement plan income gets a smaller break. Each qualifying recipient can deduct up to $48,216 of eligible pension income included in federal adjusted gross income, but that cap is reduced dollar-for-dollar by any Social Security or railroad retirement benefits you receive, taxable or not. Someone collecting $30,000 in Social Security could deduct at most $18,216 of pension income.5Maine Revenue Services. 2025 Income Tax Instructions
Starting in tax year 2025, the pension deduction also phases out at higher incomes: $125,000 of federal adjusted gross income for single filers, $187,500 for head of household, and $250,000 for joint filers, with inflation adjustments in later years. Distributions taken before age 55 that aren’t part of a substantially equal periodic payment schedule don’t qualify for the deduction at all.5Maine Revenue Services. 2025 Income Tax Instructions
Sales and Use Tax
Maine charges 5.5% on most retail sales of goods and taxable services. There are no local sales taxes added on top, so the rate is the same everywhere in the state.6Maine State Legislature. Maine Code Title 36 Section 1811 – Sales Tax
Some categories pay more. Prepared food and liquor served at licensed establishments are taxed at 8%. Short-term lodging — hotels, motels, bed-and-breakfasts, and short-term vacation rentals — is taxed at 9%. Car rentals for less than a year are taxed at 10%.6Maine State Legislature. Maine Code Title 36 Section 1811 – Sales Tax
What’s Exempt
Grocery staples, prescription medications, and prosthetic and orthotic devices are exempt. The grocery exemption covers basic food, not prepared meals. Prescription drugs qualify only when sold on a doctor’s order; over-the-counter medications are taxable. Crutches and wheelchairs for people with injuries or disabilities are also exempt.7Maine Legislature. Maine Code Title 36 Section 1760 – Exemptions
Use Tax on Out-of-State Purchases
When you buy a taxable item from an out-of-state seller that doesn’t collect Maine sales tax, you owe use tax at the same 5.5% rate. Individuals report it on their income tax return for items costing $5,000 or less. If you don’t want to track every purchase, Maine lets you pay an estimated use tax of 0.04% of your Maine adjusted gross income, but that shortcut covers only items costing $1,000 or less each. For any single item over $1,000, calculate the actual tax and add it on top.8Maine State Legislature. Maine Code Title 36 Section 1861-A – Reporting Use Tax on Individual Income Tax Returns
Out-of-state businesses that sell into Maine must register and collect sales tax once they exceed $100,000 in gross Maine sales or complete 200 or more separate Maine transactions during the current or previous calendar year. Marketplace facilitators such as large online platforms generally handle collection for their third-party sellers.9Maine Revenue Services. Guidance for Remote Sellers
Property Tax
Property tax in Maine is entirely local. Municipal assessors value the real and personal property in their jurisdiction, and each town sets its own mill rate — the tax per $1,000 of assessed value — based on its budget.10Maine State Legislature. Maine Code Title 36 Section 502 – Property Taxable; Tax Year Two homes with the same market value can produce very different tax bills depending on the town.
Homestead Exemption
The Homestead Exemption reduces the taxable value of your primary residence by up to $25,000. You must be a permanent Maine resident and have owned a home in the state for at least the preceding 12 months. File the application with your municipality by April 1.11Maine Revenue Services. Homestead Exemption Program FAQ The $25,000 combines a $10,000 base exemption with a $15,000 additional exemption for property tax years beginning on or after April 1, 2020.12Maine Legislature. Maine Code Title 36 Section 683 – Exemption of Homesteads
Veteran Exemption
Veterans who served during a federally recognized war period can exempt up to $6,000 of assessed value, and the same amount extends to unremarried surviving spouses and minor children of qualifying veterans. Veterans with federally funded specially adapted housing can exempt up to $50,000. These exemptions stack on top of the Homestead Exemption.13Maine Legislature. Maine Code Title 36 Section 653 – Estates of Veterans
Challenging Your Assessment
If you think your property has been overvalued, you can file a written abatement application with your municipal assessors within 185 days of the tax commitment date. State the grounds in the application. Assessors can also start an abatement on their own within one year of commitment to fix errors.14Maine State Legislature. Maine Code Title 36 Section 841 – Abatement Procedures
Credits That Can Lower Your Bill
Two refundable credits are worth checking before you file. The Property Tax Fairness Credit refunds part of the property taxes or rent you paid on your primary residence. Homeowners and renters both qualify, filers 65 and older get higher maximums, and the credit is income-limited. You claim it on Schedule PTFC/STFC with your Form 1040ME.15Maine Revenue Services. Property Tax Fairness Credit Summary
The Student Loan Repayment Tax Credit is worth up to $2,500 per year, with a $25,000 lifetime cap, if you graduated from an accredited college or university after 2007 and are paying off loans used for an associate, bachelor’s, or graduate degree. You have to live and work in Maine, and the credit is based on actual loan payments made during the tax year.16Maine Revenue Services. Student Loan Repayment Tax Credit FAQ
Estate Tax
Maine is one of a small number of states with its own estate tax, and the exclusion is well below the federal threshold. For deaths in 2026, estates valued at $7,160,000 or less owe nothing. The exclusion is adjusted annually for inflation using the Chained Consumer Price Index.17Maine Revenue Services. Estate Tax 706ME18Maine Legislature. Maine Code Title 36 Section 4119 – Annual Adjustments for Inflation
Above the exclusion, the tax runs in three tiers: 8% on the first $3,000,000 over the exclusion, 10% on the next $3,000,000, and 12% on anything above that. The tax applies to the full estate of a Maine resident. For nonresidents, it applies only to the portion made up of real and tangible personal property located in Maine.19Maine Legislature. Maine Code Title 36 Section 4103 – Tax on Estate of Resident
The personal representative files Form 706ME within nine months of death. Maine grants an automatic extension of up to six months (longer if a federal extension applies), but it only extends filing, not payment. Tax owed must be paid by the original nine-month deadline, and interest accrues from that date on any unpaid balance.20Maine Revenue Services. Estate Tax FAQ
Corporate Income Tax
Maine taxes corporate income on a four-bracket progressive scale: 3.5% on the first $350,000, stepping up through 7.93% and 8.33%, and reaching 8.93% on income above $3,500,000. Affiliated groups in a unitary business file on a combined basis.
A corporation doesn’t need an office in Maine to owe tax. For tax years beginning on or after January 1, 2022, Maine uses factor-presence thresholds: a filing obligation kicks in at $250,000 in Maine property, $250,000 in Maine payroll, $500,000 in Maine sales, or when 25% or more of total property, payroll, or sales is attributable to Maine.21Maine Revenue Services. Corporate Income Tax FAQ
Penalties for Filing or Paying Late
Maine charges separate penalties for filing late and paying late. Late filing costs $25 or 10% of the tax due, whichever is greater. If Maine Revenue Services sends a formal demand notice and you still don’t file, the penalty rises to $25 or 25% of the tax due.22Maine Revenue Services. Your Rights as a Taxpayer
Late payment adds 1% of the unpaid tax for each month the balance remains outstanding, capped at 25%, with interest on top.23Maine State Legislature. Maine Code Title 36 Section 187-B – Penalties
Deliberately evading tax is a crime. Under 36 M.R.S. § 184-A, intentionally evading a tax of $2,000 or less is a Class D crime, carrying up to 364 days in jail. Evading more than $2,000 is a Class C crime, with higher potential penalties. Criminal exposure comes on top of civil penalties and interest.24Maine State Legislature. Maine Code Title 36 Section 184-A – Intentional Evasion of Tax