Maine 2023 Sales Tax Guide

Maine Sales Tax in a Word

Maine Sales Tax Contacts

Sailing through the seas of Maine sales tax can sometimes feel like navigating through a dense fog. To help you stay on course, we've gathered essential contact information for the Maine tax authorities. These trusted navigators will ensure you have the support and guidance needed to master sales tax compliance in the Pine Tree State.

The Maine Revenue Services (MRS), a division of the Maine Department of Administrative and Financial Services, oversees sales tax administration, collection, and enforcement in the state. They're your go-to source for all things related to Maine sales tax, from registration and filing to rates and exemptions.

If you need to get in touch with Maine Revenue Services, you can contact them through various channels:

• Phone: (207) 624-9693

• Email:  sales.tax@maine.gov

• Website:  www.maine.gov/revenue

• Mailing Address:

  Maine Revenue Services

  Sales Tax Division

  P.O. Box 1060

  Augusta, ME 04332-1060

With the Maine Revenue Services' expertise at your side, you'll be well-equipped to tackle any sales tax challenges that come your way. Keep your compass close, trust your navigators, and chart a course for sales tax success in Maine! 

Do You Have Nexus in Maine?

As you sail the seas of Maine sales tax, it's essential to determine whether your business has established nexus in the Pine Tree State. In this section, we'll explore the various ways your business may create a sales tax nexus in Maine, from physical and economic presence to affiliate and click-through relationships. We'll also discuss the marketplace nexus, which impacts online sellers and marketplace facilitators.

What Creates Sales Tax Nexus in Maine?

In the world of sales tax, "nexus" refers to a connection or presence that a business has in a particular state. When a business has nexus in Maine, it is required to collect and remit sales tax on taxable sales made within the state. Let's delve into the different types of nexus and how they may apply to your business.

physical nexus in Maine

Physical nexus is established when a business has a tangible presence in Maine, such as:

• Owning or leasing property, including offices, warehouses, or retail locations

• Having employees, agents, or sales representatives in the state

• Storing inventory or merchandise in the state, even in a third-party warehouse

economic nexus in Maine

Economic nexus is triggered when a business has a significant economic presence in Maine, even without a physical presence. In Maine, economic nexus is established if, during the current or previous calendar year:

• Your gross revenue from sales of tangible personal property, products transferred electronically, or services delivered into Maine exceeds $100,000, or

• You conducted 200 or more separate transactions for the delivery of tangible personal property, products transferred electronically, or services into the state

affiliate nexus in Maine

Affiliate nexus occurs when a business has a relationship with an in-state entity that conducts activities on its behalf. In Maine, affiliate nexus is established if your business:

• Has a substantial ownership interest in, or is owned by, a company with physical presence in Maine, or

• Shares management, business systems, or employees with a Maine-based company

click-through nexus in Maine

Click-through nexus is established when a business has an agreement with a Maine-based affiliate who refers customers to the business through a website link or other means, and the business generates over $10,000 in sales from those referrals during the previous calendar year.

marketplace nexus in Maine

Marketplace nexus impacts businesses that sell through online marketplaces, as well as the marketplace facilitators themselves. In Maine, marketplace facilitators are required to collect and remit sales tax on behalf of their sellers if the facilitator's sales, or the combined sales of the facilitator and its marketplace sellers, meet the state's economic nexus thresholds.

By understanding the various ways your business may establish nexus in Maine, you'll be better equipped to navigate the waters of sales tax compliance and ensure smooth sailing for your business endeavors. Better yet, hire a Maine sales tax expert like Accountingprose, and get back to adventuring around your beautiful state.  

Maine Sales Tax Registration

Before you can set sail on your Maine sales tax journey, you'll need to ensure your vessel is properly registered. In this section, we'll provide a detailed guide on how to register for sales tax in Maine, as well as important information about registration costs, federal tax ID numbers, and additional agency registrations.

How to Register for Sales Tax in Maine

To help you navigate the registration process with ease, we've outlined the key steps to register for a Maine sales tax license:

1. Gather necessary information: Before you begin the registration process, gather important information such as your business name, address, and contact information, as well as your federal tax ID number (EIN) or Social Security number.

2. Create an online account: Visit the Maine Revenue Services (MRS) Online Services Portal and click on "Register a New Business" to create an online account. You will need to provide a valid email address and create a unique username and password.

3. Complete the online application: After logging in, follow the prompts to complete the online application for a sales tax license. You will need to provide information about your business structure, ownership, business activities, and estimated monthly sales tax liability.

4. Review and submit your application: Carefully review your application for accuracy, and submit it electronically to the MRS. You will receive an email confirmation upon successful submission.

5. Wait for approval: The MRS will review your application and, if approved, issue your Maine sales tax license. This process typically takes 7-10 business days. Once you receive your license, you are authorized to collect and remit sales tax on taxable sales made within the state.

How Much Does it Cost to Register for a Maine Sales Tax License?

Good news, tax adventurers! Registering for a Maine sales tax license is completely free! There are no registration fees or hidden costs, allowing you to focus your resources on navigating the seas of sales tax compliance.

Do I Need a Federal Tax ID Number or EIN to Register for a Maine Sales Tax License?

Which Agencies in Maine Might I Need to Register With Additionally?

Collecting Sales Tax in Maine

Is Maine aN Origin or Destination Sales Tax State? 

Maine is a destination-based sales tax state. This means that sales tax is based on the location where the buyer takes possession of the item or where it is delivered. For businesses with a physical presence in Maine, you'll need to collect sales tax at the rate applicable to the buyer's location, regardless of where your business is located.

What Sales are Subject to Sales Tax in Maine?

In Maine, sales tax applies to the sale of most tangible personal property, as well as certain services. Some examples of taxable sales include:

• Furniture, appliances, and electronics

• Clothing and accessories

• Motor vehicles and parts

• Prepared food and restaurant meals

• Hotel and lodging accommodations

• Certain repair, installation, and maintenance services

Is Software as a Service (SaaS) taxed in Maine?

What is Exempt from Maine Sales Tax?

There are several items and services exempt from sales tax in Maine, including:

• Groceries and unprepared food

• Prescription drugs and over-the-counter medications

• Newspapers, magazines, and periodicals

• Certain agricultural and manufacturing machinery and equipment

• Sales to qualified nonprofit organizations, government entities, and schools

Who is Eligible for Maine Sales Tax Exemptions?

What Should I Do If My Customer is Exempt from Sales Tax in Maine?

If you have a customer who is exempt from sales tax in Maine, you must obtain a completed Maine Sales Tax Exemption Certificate from the customer. Keep this certificate on file as documentation of the tax-exempt sale.

What Happens If I Lose a Maine Sales Tax Exemption Certificate?

If you lose a Maine Sales Tax Exemption Certificate, you should contact the exempt customer and request a new, completed certificate. It is essential to keep accurate records of all tax-exempt sales and corresponding exemption certificates to stay compliant with Maine sales tax regulations.

By understanding how to collect sales tax and navigate exemptions in Maine, you'll be well-prepared to conquer the sales tax seas and ensure smooth sailing for your business.

Filing and Paying Sales Taxes in Maine

Congratulations, tax adventurer! You've successfully navigated the waters of collecting sales tax in Maine. Now it's time to dock your ship, file your sales tax return, and pay the taxes you've collected. In this section, we'll guide you through the filing and payment process, including key deadlines, filing procedures, penalties, and incentives.

What If a Maine Sales Tax Filing Date Falls on a Weekend or Holiday?

How Do I File a Maine Sales Tax Return?

Filing a Maine sales tax return is a crucial step to ensure compliance and avoid penalties. To make this process as smooth as possible, follow these steps and choose the method that works best for you: electronic filing or paper filing.

Step 1: Gather your records

Before you begin filing your sales tax return, gather all the necessary records for the filing period. These records should include:

• Total sales, including exempt sales

• Taxable sales

• Sales tax collected by jurisdiction

• Sales tax exemptions and exemption certificates

• Copies of any invoices, receipts, or other documentation related to your sales

Step 2: Choose your filing method

There are two methods for filing a Maine sales tax return: electronic filing through the MRS Online Services Portal or paper filing using Form ST-3.

Electronic Filing:

To file electronically, follow these steps:

1. Visit the MRS Online Services Portal and log in to your account. If you don't have an account, you'll need to complete the registration process first.

2. Once you're logged in, click on the "File a Return" link under the "Sales Tax" section.

3. Select the appropriate filing period and click "Next."

4. Enter your total sales, taxable sales, and sales tax collected for each jurisdiction in the designated fields. Be sure to include any sales tax exemptions or credits that apply.

5. Review your return for accuracy and make any necessary corrections.

6. Submit your return electronically by clicking "Submit." You'll receive a confirmation number as proof of submission.

7. If you have a tax liability, you can make an electronic payment through the portal using ACH debit, credit card, or e-check.

Paper Filing:

To file your sales tax return by mail using Form ST-3, follow these steps:

1. Download and print Form ST-3 from the MRS website.

2. Fill out the necessary information, including your business identification number, filing period, total sales, taxable sales, and sales tax collected for each jurisdiction. Be sure to include any sales tax exemptions or credits that apply.

3. Double-check your return for accuracy and make any necessary corrections.

4. Sign and date the form, then make a copy for your records.

5. Mail the completed form to the following address:

   Sales Tax Division
   P.O. Box 1064
   Augusta, ME 04332-1064

6. Include a check or money order for the tax due, made payable to "Treasurer, State of Maine." Be sure to write your business identification number and the filing period on the check or money order.

By following these steps and choosing the filing method that works best for you, you'll be well-prepared to file your Maine sales tax return accurately and on time.

Happy filing, tax adventurers! 

What are the various penalties that can be assessed for sales tax filing in Maine?

If you fail to file or pay your Maine sales tax on time, you may be subject to the following penalties:

• Late filing penalty: A penalty of $25 or 10% of the tax due, whichever is greater, will be assessed for filing your return late.

• Late payment penalty: A penalty of 1% per month (or fraction thereof) of the tax due will be assessed for late payments.

• Negligence penalty: If the MRS determines that your failure to file or pay was due to negligence, a penalty of 25% of the tax due may be assessed.

• Fraud penalty: If the MRS determines that your failure to file or pay was due to fraud, a penalty of 50% of the tax due may be assessed.

5 Tips to Avoid Common Mistakes When Filing Maine Sales Tax Returns

Have sales tax in more than one state?

Check out All of our Sales Tax Guides

And don't forget to check out our blog about Economic Nexus, which serves as an invaluable resource for businesses who have sales that are subject to sales tax. 

This blog is for informational purposes only and the information is accurate as of 2023-06-19. If you want legal advice on sales tax law for your business, please contact a State and Local Tax (SALT) professional. Keep in mind that sales tax regulations and laws are subject to change at any time. While we strive to keep our blog current, this blog possibly may be out of date by the time you review it.