A Guide to Maine State Taxes
In the United States, most income-earning adults are not only responsible for paying federal taxes, but state taxes as well. These taxes vary depending on the state you live in, which makes it important to understand your state-specific tax obligations.
Understanding the taxes that you owe based on where you live is important, mostly because if you don’t pay your taxes, you could end up owing even more and get in a world of legal trouble. Not paying your taxes could result in fees or penalties such as having your assets frozen. In some cases, not paying your taxes could even lead to jail time.
The IRS can charge you interest fees, put liens on your property, garnish your wages, and intercept a tax refund. To prevent these issues from arising, familiarize yourself with the taxes in your state. This guide to taxes in Maine will explain the many taxes unique to the state of Maine that you are responsible for paying.
Table of Contents
Maine Income Tax
While the federal income tax is the same across the nation, Maine’s income tax is based on graduated rates that range from 5.8% to 7.15%. Maine’s income tax is divided into two categories: single and married. Each category has its own income brackets based on filing status.
|Taxable Income — Single Individuals||Tax|
|Less than $22,200||5.8%|
|$22,200 to $52,600||$1,288 plus 6.75% of the amount you earn over $22,200|
|Greater than $52,600.||$3,340 plus 7.15% of the amount you earn over $52,600|
|Taxable Income — Married Filing Jointly||Tax|
|Less than $44,450||5.8%|
|$44,450 to $105,200.||$2,578 plus 6.75% of the amount you earn over $44,450|
|Greater than $105,200||$6,679 plus 7.15% of the amount you earn over $105,200|
Maine Sales Tax
Maine has a general sales tax of 5.5%. In addition to this sales tax, certain items are also taxed. For example, there is a prepared food tax of 8% and a short-term auto rental tax of 10%. Other product and service-specific sales taxes include:
- Long-term auto rentals — 5.5%.
- Lodging rentals — 9%.
- Short-term auto rentals — 10%.
- Service provider tax — 6%.
- Medical marijuana — 5.5 to 8%.
- Use tax — 5.5%.
Maine Property Tax
Maine’s property tax is assessed at the local level, however, the assessors are governed by the state. These property tax divisions handle the variety of taxes imposed by the local government, including the real estate tax and interest transfer tax, among others.
The division that assesses property is divided into two categories: municipal services and unorganized territory. The municipal division handles the technical aspects associated with the local governments’ need to assess a property for taxpayers.
The unorganized territory division covers the areas of Maine that don’t have a local, incorporated municipal government. There are 429 townships in Maine that are considered unauthorized territories that don’t fall under the municipal sector.
Maine Estate Tax
Maine does not have an inheritance tax, but it does have three brackets of estate tax.
Anyone who passed away on January 1, 2013, or after will be taxed on the value of their estate, regardless of whether there is a federal estate tax. However, the state doesn’t tax an estate unless its value is fairly high. Maine also taxes any gifts that an estate’s executors make to beneficiaries within a year of the decedent’s death. Anyone who died during the year 2020 will face an exclusion amount of $5,800,000.
The estate tax in Maine looks like this:
|Value of Estate||Tax|
|$0 to $5,800,000||No tax|
|$5,800,000 to $8,800,000||Subtract $5,800,000 from the value of the estate and multiply the total by 8% of the estate’s value|
|$8,800,000 to $11,800,000||Subtract $8,800,000 from the value of the estate and multiply the total by 10% of the estate’s value, then add $240,000|
|Greater than $11,800,000||Subtract $11,800,000 from the value of the estate and multiply the total by 12% of the estate’s value, then add $540,000|
Other Taxes in Maine
In addition to the standard state taxes, Maine has a few other taxes that residents are responsible for paying. Maine’s additional taxes include fuel tax, franchise tax, propane tax, and the blueberry tax.
Maine is the largest producer of blueberries in the world, producing 10% of all of the blueberries in North America. As such, there is a tax for commercial sellers of blueberries. These sellers must pay 1.5 cents per pound of blueberries and are responsible for reporting all sales and purchases of blueberries.
Filing Taxes in Maine
While Maine residents can use a financial advisor to file their taxes or submit them the old-fashioned way, the easiest way to file taxes in Maine is online. Users may take advantage of the error-reducing calculators these platforms use and receive their refund via direct deposit faster than they would by filing traditionally.
Generally, you must file your taxes by April 15 to avoid incurring any fees or penalties.
Whether you are currently residing in Maine or plan to move there one day, familiarize yourself with the taxes you will be responsible for paying. That way, when you file your taxes, you’ll avoid penalties and late fees. Reference this guide for an understanding of taxes in Maine when you start filing.
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This post was updated January 28, 2020. It was originally published January 23, 2020.