Maine: Sales Tax Handbook
What purchases are taxable in Maine?
The taxability of various transactions (like services and shipping) can vary from state to state, as do policies on subjects such as whether excise taxes or installation fees included in the purchase price are also subject sales tax. This reference is here to help answer your questions about what is and is not subject to the Maine sales tax.
Contents1.) Taxability of Goods and Services
- General Maine taxability guidelines
- Are services subject to sales tax?
- Is shipping & handling subject to sales tax?
- Are drop shipped items taxable?
Section 1: Taxability of Goods and Services
What transactions are generally subject to sales tax in Maine?
In the state of Maine, legally sales tax is required to be collected from tangible, physical products being sold to a consumer. Several examples of exceptions to this tax are most grocery products, certain types of prescription medication, some medical equipment, and certain items associated with commerce.
This means that someone selling furniture would be required to charge sales tax, but an individual who sells groceries would not be required to charge sales tax on most products.
Are services subject to sales tax in Maine?
In the state of Maine, services are not generally taxable. While most services are exempt, there are a few exceptions. For example, a service who's work includes creating or manufacturing a product is very likely considered to be taxable, and thus you would most likely have to pay sales tax on the service.
You can find a table describing the taxability of common types of services later on this page.Top
Are shipping & handling subject to sales tax in Maine?
In the state of Maine, the laws regarding tax on shipping and handling are fairly simple. The state does not usually require sales tax on the shipping costs. So long as the shipping costs are stated separately on the invoice, the product is delivered directly to the buyer and the shipping transportation is handles through the use of common carrier(the contract carrier of the US mail), no tax on the cost is necessary.
However, it must be noted that if you choose to include the cost of shipping in the price of the product being sold, the shipping cost is considered to have become a part of the total taxable transaction, and sales tax must be collected in this case.
Are drop shipments subject to sales tax in Maine?
"Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product which is shipped to the end-user by a third party supplier hired by the initial vendor. In Maine, drop shipments are generally subject to state sales taxes.
Section 2: Taxability of Various Items in Maine
This table shows the taxability of various goods and services in Maine. If you are interested in the sales tax on vehicle sales, see the car sales tax page instead. Scroll to view the full table, and click any category for more details.
|Products on Amazon.com||EXEMPT|
|Food and Meals|
|Grocery Food||EXEMPT *|
|Leases and Rentals|
|Motor Vehicles||TAXABLE *|
|Tangible Media Property||TAXABLE *|
|Manufacturing and Machinery|
|Utilities & Fuel||EXEMPT *|
|Medical Goods and Services|
|Newspapers and Magazines|
|General Occasional Sales||EXEMPT *|
|Motor Vehicles||TAXABLE *|
|Optional Maintenance Contracts|
|General Optional Maintenance Contracts||EXEMPT *|
|Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts||TAXABLE|
|Pollution Control Equipment|
|General Pollution Control Equipment||TAXABLE *|
|Software and Digital Products|
|Canned Software - Delivered on Tangible Media||TAXABLE|
|Canned Software - Downloaded||TAXABLE|
|Custom Software - Delivered on Tangible Media||EXEMPT|
|Custom Software - Downloaded||EXEMPT|
|Customization of Canned Software||TAXABLE *|
|General Trade-Ins||TAXABLE *|
|Vending Machine Sales|
* See notes in category taxability page for details
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