Maine's sales tax rate and what it covers

Maine has a 5.5% sales tax on most goods and services. This is the statewide rate that applies across all counties and municipalities — Maine does not allow local sales taxes on top of the state rate.

The tax applies to tangible personal property (things you can touch and take home) and certain services. Clothing under $175 per item is exempt, which is unusual among states. Groceries, prescription medications, and medical devices are not taxed. Services like haircuts, repairs, and professional fees are generally taxed at 5.5%.

Some items fall into a middle category: prepared food and restaurant meals are taxed at 7%, which is higher than the standard rate. This includes takeout, delivery, and food from food trucks. Unprepared groceries remain at 0%.

Key Takeaways

  • Maine's statewide sales tax is 5.5% on most goods and services, with no additional local taxes.
  • Clothing items under $175 are not taxed, but items $175 and over are taxed at the full rate.
  • Prepared food and restaurant meals are taxed at 7%, while unprepared groceries have no sales tax.
  • Prescription medications, medical devices, and certain services like healthcare are exempt from sales tax.
  • The tax is collected by the seller at the point of sale and sent to the Maine Department of Revenue Services.

Items that are not taxed in Maine

Maine exempts a longer list of items than many states. Beyond groceries and prescription drugs, the exemptions include durable medical equipment (wheelchairs, walkers, oxygen equipment), prosthetics, and hearing aids. Newspapers and magazines are not taxed. Certain fuels used for heating are exempt, though gasoline and diesel for vehicles are taxed.

Agricultural equipment and seeds used directly in farming operations are exempt. If you buy something for resale (you are a business buying inventory), you do not pay sales tax — you provide a resale certificate instead. Educational materials and textbooks purchased by schools or students for school use may be exempt depending on the context.

The $175 clothing exemption explained

Maine's clothing exemption is one of the most generous in the country, but it has a threshold. Any single article of clothing that costs less than $175 is not taxed. A $100 shirt is exempt. A $200 winter coat is taxed at 5.5%. A $174.99 pair of shoes is exempt; a $175.01 pair is taxed.

The exemption applies to the item itself, not the total purchase. If you buy five shirts for $30 each, none of them are taxed because each one is under $175. If you buy one item for $500, the full amount is taxed. Accessories like belts, hats, and gloves are treated as clothing and follow the same rule. Footwear, including shoes and boots, is also covered by this exemption.

Services that are taxed

Most services in Maine are subject to the 5.5% sales tax. This includes haircuts and salon services, auto repairs and maintenance, appliance repairs, plumbing and electrical work, and consulting fees. Laundry and dry cleaning services are taxed. Pet grooming and veterinary services are taxed. Rental of tangible property — like equipment rental or car rental — is taxed.

Some services are exempt. Medical and dental services performed by licensed practitioners are not taxed. Legal services are not taxed. Educational services provided by schools and colleges are not taxed. Certain nonprofit services may be exempt if the organization holds a nonprofit status. If you are unsure whether a specific service is taxed, the Maine Department of Revenue Services publishes guidance on their website.

How sales tax is collected and reported

The seller collects sales tax from the buyer at the point of sale. The seller then holds that money and sends it to the Maine Department of Revenue Services on a regular schedule. Most businesses file and pay sales tax monthly, though some file quarterly or annually depending on their sales volume and the department's information.

Businesses register for a sales tax account with the state before they begin collecting. They receive a sales tax registration certificate. When a customer makes a purchase, the seller calculates the tax based on the sale price and the applicable rate (5.5% or 7% for prepared food), adds it to the bill, and collects it from the customer. The seller keeps records of all sales and taxes collected.

If you buy something online from an out-of-state seller, Maine law requires that seller to collect and remit Maine sales tax if they have a physical presence in Maine or meet certain sales thresholds. If they do not, you may owe "use tax" — which is the same rate as sales tax — when you file your Maine income tax return, though most individuals do not report this.

Resale certificates and business purchases

If you own a business and buy inventory or materials for resale, you do not pay sales tax on those purchases. Instead, you provide the seller with a resale certificate (also called a resale permit or exemption certificate). This document proves you are a registered business buying for resale, not for personal use.

To get a resale certificate, you must register with the Maine Department of Revenue Services and receive a sales tax registration number. You then provide that number to your suppliers. The supplier keeps the certificate on file and does not charge you sales tax. You are responsible for collecting sales tax from your customers when you sell those items.

Misusing a resale certificate — buying personal items with one, or providing one when you are not actually reselling — is tax fraud. The state can assess penalties and back taxes. If you are unsure whether a purchase qualifies for resale exemption, contact the Maine Department of Revenue Services before buying.

Special situations and exceptions

Certain transactions have special rules. Trade-ins are handled differently depending on the item — for vehicles, the trade-in value is typically subtracted from the purchase price before tax is calculated. Gift cards are not taxed when purchased, but the purchase made with the card is taxed normally. Shipping and handling charges are usually taxed as part of the sale.

Nonprofit organizations with a valid exemption certificate do not pay sales tax on purchases directly related to their mission. Religious organizations may have exemptions for certain purchases. If your organization believes it qualifies for an exemption, you must apply to the Maine Department of Revenue Services and receive written approval before claiming it.

Frequently Asked Questions

Do I pay sales tax on online purchases from Maine sellers?

Yes. If you buy from a Maine-based online seller, they must collect and remit Maine sales tax. The tax is added to your total before checkout. If you buy from an out-of-state seller without a Maine presence, they typically do not collect Maine tax, though Maine law technically requires you to report and pay use tax on your state income tax return.

Is gasoline taxed in Maine?

Gasoline and diesel fuel for vehicles are not subject to the 5.5% sales tax. However, Maine has a separate fuel tax (excise tax) that is added at the pump. This is a different tax from sales tax and is set by the state. Heating fuel oil is also exempt from sales tax.

What happens if a clothing item costs exactly $175?

An item priced at exactly $175.00 is taxed at 5.5%. The exemption applies only to items under $175. Once the price reaches $175 or higher, the full item is subject to sales tax.

Do I have to pay sales tax on used items?

Yes, used items are taxed the same way as new items when sold by a business. If you buy a used car from a dealer, you pay sales tax. If you buy a used item from an individual in a private sale, sales tax does not apply — it is only collected when a business makes the sale.

Are streaming services and digital subscriptions taxed?

Maine taxes digital goods and services, including streaming subscriptions, e-books, and digital downloads. The 5.5% sales tax applies to these purchases the same way it does to physical goods.