Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for Maine.
February 18, 2025
Maine – Credit Claim for Registered Retailer
Authored by: Courtney Easterday, MSA and Ryan Schupp
Maine Revenue Services recently announced registered retailers may no longer claim a credit for sales tax paid on items that are later sold at retail. Prior to this announcement, the law allowed a retailer to take credit for sales tax paid by the retailer on items when they are later sold at retail. This credit was originally designed to be used by retailers that report less than $3,000 in gross sales annually and may not have a resale certificate in the state.
Effective February 2025, registered retailers and businesses that have a resale certificate from Maine Revenue Services will no longer be able to claim credit for sales tax paid on goods purchased for resale on their returns. If a retailer is unable to issue a resale certificate, then a refund can be requested for the sales tax paid on a Sales Tax Refund Application.
If you have questions about how sales for resale exemptions affect your business, please contact a member of the Withum SALT Team.
February 7, 2025
Maine Shifting to “Lease Stream” Sales Taxation Starting January 1, 2025
Authored by: Emilia Jarrin and Katie Nguyen, CPA
Starting January 1, 2025, Maine will shift its sales tax imposition on tangible personal property, including electronically transferred products, leased or rented within the state, to apply to each periodic lease or rental payment made by the lessee. For leases initiated, renewed, or in effect on or after this date, lessors will be required to charge and collect Maine sales tax on each payment made by the lessee. Each lease or rental period for which a payment is charged will be treated as a separate sale. The sale price of a lease or rental of tangible personal property, including electronically transferred products, will generally include the total amount paid. It will also cover various charges such as maintenance, setup, transportation, administrative fees, late return charges, and others, regardless of whether they are separately stated.
Additionally, beginning January 1, 2025, the sale, lease, rental, or license of canned computer software or electronically transferred products will be considered taxable sales of tangible personal property. For additional information on Maine’s change to “lease stream” taxation, please refer to the Department’s Notice.
If you have questions about sales tax collections, please reach out to a member of the Withum SALT Team.
June 25, 2021
Maine Adopts Nexus Standards for Corporate Income Tax Purposes, and Modifies Economic Nexus Rule
Effective January 1, 2022, a corporation has nexus in Maine if it is (1) organized or commercially domiciled in Maine, or (2) organized or commercially domiciled outside of Maine, but the corporation has (a) property or payroll in Maine that exceeds $250,000, (b) sales in Maine that exceed $500,000, (c) 25% of the corporation’s property, payroll, or sales are in Maine, and/or (d) a corporation holds interest in a partnership and the partnership meets any of the thresholds listed above. Further, the State’s current economic nexus rules provide that persons selling tangible personal property or taxable services in at least 200 separate transactions will be subject to sales and use tax. Effective January 1, 2022, the 200 separate transaction element will be repealed, but the economic nexus threshold for gross sales exceeding $100,000 in the previous calendar year or the current calendar year threshold will continue to be in effect.
April 14, 2021
Maine Now Conforms to Most Federal Tax Law Changes Enacted on or before December 31, 2020
Maine’s income and estate tax laws now conform to the federal Internal Revenue Code (“IRC”) as amended through December 31, 2020. This includes conformity to the federal treatment of the Paycheck Protection Program (“PPP”) loan forgiveness (exclusion from income and the allowance of the deduction for related expenses). The Maine Legislature has not yet considered conformity with federal tax laws enacted after December 31, 2020, including the American Rescue Plan Act of 2021 (“ARPA”), except for the federal exclusion of up to $10,200 of unemployment compensation reportable for tax years beginning in 2020. Up to $10,200 of unemployment benefits, to the extent excluded from federal adjusted gross income, is also excludable for Maine income tax purposes.
March 25, 2021
Maine Amends Regulation on Sales for Resales
Effective March 15, 2021, Maine’s regulation addressing sales for resale and sales of packaging materials is amended to clarify that a sale for resale is not an “exemption”; rather it is an exclusion from the definition of “retail sale.” As such, the State will no longer issues “provisional” resale certificates. If you or your business is making resale sales into Maine, make sure you are aware of any administrative related changes that may result from this technical change.
March 23, 2021
Maine Update on Extension of Filing Deadline
The filing and payment deadline for tax year 2020 individual income tax returns is extended to May 17, 2021, from the usual April 15, 2021, deadline in order to correspond to the federal tax extension. The extension is automatic; taxpayers do not need to do anything to receive the extension. However, the extended deadline does not apply to corporate returns and payments and it does not apply to personal and corporate income tax estimated payments; the due date for those remains April 15, 2021. Maine Revenue Services is expected to provide formal guidance shortly. ( Press Release: Governor Mills Announces Extension of State Income Tax Deadline to May 17, 2021, Office of Governor Janet T. Mills, 03/18/2021 .)
March 9, 2021
Recent Maine Ruling Held Discounted Phone Pricing Was Subject to Sales Tax
A phone manufacturer offered discounts on iPhone purchases to customers who signed up for a wireless plan with certain unrelated wireless carriers. However, the contracts with the wireless carriers called for the phone manufacturer to be reimbursed for the amount discounted on the phone purchases. While true discounts are generally excluded from the definition of “sales price” for purposes of sales tax in Maine, in this case the State’s Judicial Court ruled that because the retailer expected to be reimbursed for the discount at the time of the sale—making it a recoup of profits rather than a discount—such “discount” should have been part of the taxable sales price.
More on Taxes and the Coronavirus Pandemic.
Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.
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The State and Local Tax (SALT) laws vary from state to state and are constantly changing. Reach out to Withum’s SALT Team for guidance on how to navigate your state’s local tax laws.
