Maine Sales Tax on Services, Installation, etc Maine: Sales Tax Handbook

Maine:

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.

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.

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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.

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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.

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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.

Category Exemption Status
Amazon Purchases
Products on Amazon.com EXEMPT
Clothing
General Clothing TAXABLE
Food and Meals
Catering TAXABLE *
Grocery Food EXEMPT *
Leases and Rentals
Motor Vehicles TAXABLE *
Tangible Media Property TAXABLE *
Manufacturing and Machinery
Machinery EXEMPT *
Raw Materials EXEMPT
Utilities & Fuel EXEMPT *
Medical Goods and Services
Medical Devices EXEMPT
Medical Services EXEMPT
Medicines TAXABLE *
Newspapers and Magazines
Newspapers EXEMPT *
Periodicals EXEMPT *
Occasional Sales
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 *
Services
Janitorial Services EXEMPT
Transportation Services EXEMPT
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 *
Digital Products TAXABLE
Trade-Ins
General Trade-Ins TAXABLE *
Vending Machine Sales
Food TAXABLE *
Merchandise TAXABLE *

* See notes in category taxability page for details



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** This Document Provided By SalesTaxHandbook **
Source: http://www.salestaxhandbook.com/maine/sales-tax-taxability