RATE OF SALES TAX:
5.50%
LOCAL & COUNTY MAXIMUM RATES:
None
Table of Contents
What Are the Taxable Goods and Services?
The first step in sales tax compliance is determining if the items or services your firm offers are taxable in Maine.
Traditional Products and Services
Physical property, such as furniture, household appliances, and automobiles, is subject to sales tax in Maine.
Groceries, prescription medications, and fuel are all free from sales tax.
Some Maine services are subject to sales tax. View the Maine Sales Tax Reference Guide on the Maine Revenue Services website for a comprehensive list of taxable services.
Digital Products and Services
A digital item or service is anything that is supplied electronically, such as a music downloaded from iTunes or a movie bought from Amazon.
Maine, on the other hand, has one exemption to this restriction. Businesses are required to collect sales tax on pre-written computer software offered online.
How to Register for Sales Tax in Maine
If you have concluded that you must charge sales tax on part or all of the products and services that your company sells, the next step is to apply for a seller’s licence.
This enables your company to collect sales tax on behalf of the municipal and state governments.
You will need the following information to register:
Personal identifying information (SSN, address, etc.)
Identification information for a business (EIN, address, etc.)
Type of business entity
Describe what your company sells.
A Resale Certificate might help you save money.
When acquiring items for resale, your firm does not have to pay sales tax if you obtain a resale certificate, also known as a reseller’s permit.
Sales Tax Collection
After obtaining your seller’s licence and starting your company, you’ll need to figure out how much sales tax to charge various consumers. It is critical for company owners to collect the right rate of sales tax to avoid penalties and the danger of expensive audits.
When computing sales tax, consider the following types of transactions:
Store Sales Shipping Within-State Sales Outside-State Sales
Sales inside the state
It is simple to calculate sales tax on products sold in Maine. Simply apply a flat 5.500% sales tax rate to all products, whether sold in-store or sent across the state.
Out-of-State Purchases
Maine firms must only pay sales tax on out-of-state transactions if they have a presence in other states.
Nexus indicates that the company has a physical presence in another state.
Common nexus types include:
A physical place, such as an office, retail shop, or warehouse.
An employee who works from home or as a roaming sales representative.
An affiliate marketer
Dropshipping from a third-party vendor.
A temporary physical site, such as a festival or fair booth.
Submit Your Sales Tax Return
You’re ready to submit your sales tax return now that you’ve obtained your Maine seller’s permit and understand how to charge the correct amount of sales tax to all of your customers. You avoid penalties and fines, be sure to meet all filing dates.
How to File a Claim
Businesses in Maine are required to file sales tax forms and make sales tax payments online.
How Frequently Should You File?
The frequency with which you must submit is determined by the total amount of sales tax collected by your firm.
Annual filing: If your company earns less than $4.16 in sales tax each month, you should submit returns on an annual basis.
Semi-annual filing: If your company receives between $4.16 and $100 in sales tax each month, you should submit returns on a semi-annual basis.
Quarterly filing: If your company receives between $100 and $599.99 in sales tax each month, you should choose to submit quarterly returns.
Monthly filing: If your company receives more than $600 in sales tax every month, you must submit returns on a monthly basis.
Seasonal filing: If your company closes for one or more calendar months on a regular basis, you may register as a seasonal filer. You must specify which months the company will be open and pay taxes on a monthly basis for those months.
Deadlines for Filing
The deadline for all Maine sales tax returns is the 20th of the month, unless it is a weekend or federal holiday, in which case the deadline is postponed to the following working day.
Penalties for Filing Late
Maine assesses a late filing penalty of $25 or 10% of the unpaid tax, whichever is larger.
Maine additionally imposes a late payment penalty of 1% every month or partial month, up to a maximum of 25% of the unpaid tax.
For any unpaid tax or penalty, the state levies a compounding interest rate of 7.0% per year or 0.58% every month or half month.