Maine Tax Rates

This post provides an overview of the primary taxes levied at the state level in Maine. The information contained here is intended for general reference. For individuals or businesses seeking comprehensive support with tax filings, compliance, or strategic planning, indinero offers expert services. We encourage all who utilize this summary to explore the tailored tax support available through indinero.

Individual Income Tax

Maine imposes a graduated state individual income tax system with three tax brackets.

  • Tax Rates: Rates range from a low of 5.80% to a top marginal rate of 7.15% (for tax year 2025). The income thresholds for these rates are subject to annual inflation adjustments.
    • For single filers (2025), the top rate of 7.15% applies to taxable income over approximately $63,450.
    • For married couples filing jointly (2025), the top rate of 7.15% applies to taxable income over approximately $126,900.
  • Retirement Income: Social Security benefits are not taxable in Maine. The state also allows a subtraction from income for certain eligible pension and retirement payments.
  • Personal Exemption: Maine allows taxpayers to claim a personal exemption and a standard deduction, which help reduce the amount of income subject to tax.

Sales and Use Tax

Sales tax is a key revenue source in Maine, which is unique in that it has a uniform rate statewide.

  • State Rate: The general state sales tax rate is 5.50% on the retail sale of tangible personal property.
  • No Local Sales Tax: Maine does not allow local, county, or municipal sales taxes. Therefore, the combined state and local sales tax rate is uniformly 5.50% throughout the state, making its combined rate one of the lowest in the nation.
  • Variable Rates: A higher rate of 8% is levied on certain items and services, most notably prepared food and liquor sold in establishments, and transient rentals (lodging).
  • Exemptions: Essential items like groceries (unprepared food) and prescription drugs are exempt from the general sales tax.
  • Use Tax: A state use tax of 5.50% applies to taxable items purchased outside of Maine but used, stored, or consumed in the state if Maine sales tax was not collected.

Property Tax (Ad Valorem Tax)

Property taxes in Maine are administered and collected exclusively at the local level by municipalities, and they generally account for the majority of local revenue. Maine’s effective property tax rate is above the national average.

  • Assessment: Municipalities are required to assess property at or near fair market value (or “just value”).
  • Tax Calculation: The tax is determined by applying the local mill rate (set by town and school budgets) to the assessed value. The mill rates vary significantly between municipalities.
  • Homestead Exemption: The state mandates a Homestead Exemption on the assessed value of an owner’s primary residence, which reduces the property’s taxable value and subsequent tax bill for qualifying residents.

Corporate Income Tax

Maine imposes a tax on the net income of corporations that conduct business in the state, utilizing a graduated rate structure.

  • Tax Rates: Corporate tax rates range from a low of 3.50% on the lowest bracket of income up to a top marginal rate of 8.93%. The top rate applies to corporate income exceeding $250,000.
  • Apportionment: For multi-state corporations, Maine uses a single sales factor apportionment method to determine the amount of income subject to the tax.
  • Minimum Tax: The state imposes a minimum tax that must be paid regardless of the calculated income tax liability.

Unique Taxes: Estate Tax

  • Estate Tax: Maine is one of the states that imposes a state-level estate tax. This tax is levied on the estates of residents and nonresidents owning property in Maine that exceed a statutory exemption amount. The rate is graduated and is applied to the taxable portion of the estate.
  • Motor Fuel Tax: A per-gallon tax is levied on motor fuels, set at approximately 31.4 cents per gallon for gasoline.

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.