Maine Business Taxes at a Glance
Maine's economy has strong seasonal patterns, with summer tourism, fishing, and forestry shaping much of the work. Its tax system reflects that, with separate sales tax rates for meals and lodging, residency questions for people who split the year between Maine and other states, and programs that reduce property tax on business equipment. Since 2025, employers and employees have also contributed to Maine's paid family and medical leave program. BOMCAS helps Maine individuals and businesses manage these requirements.
Individual Income Tax and Residency
Maine uses graduated brackets: residents report all income, and nonresidents report income sourced to Maine. Maine starts from federal adjusted gross income with its own adjustments, including a deduction for pension income up to a limit and no tax on Social Security.
Residency is a frequent question. A person domiciled elsewhere can be a Maine resident for tax purposes if they keep a permanent place of abode in Maine and spend more than 183 days in the state. Summer residents and people who retire to Maine but spend winters elsewhere need records of where they spend their time. We prepare Maine returns and part-year and nonresident filings.
Corporate Income Tax and Pass-Throughs
Corporations doing business in Maine pay corporate income tax on apportioned income, and Maine uses combined reporting for unitary groups. Financial institutions pay a franchise tax instead. Partnerships and S corporations file Maine returns and withhold on nonresident owners. We prepare corporate and entity returns.
Sales, Meals, and Lodging Tax
Maine's sales and use tax has a general rate, with higher rates for prepared food, short-term lodging, and short-term auto rentals. There are no local sales taxes. Many services are not taxable, but Maine has a separate service provider tax on certain services, such as some cable and extended cable services and group residential services.
Restaurants, inns, and vacation rental owners collect the higher meals and lodging rates. Vacation rental platforms may collect tax for hosts, but owners should confirm what is covered and register if needed. We help businesses register, apply the right rates, and file returns.
Business Equipment Tax Programs
Maine's property tax applies to business equipment, but two programs reduce it:
- BETE (Business Equipment Tax Exemption): exempts qualifying business equipment placed in service after a certain date from local property tax, with the business filing an application with the municipal assessor each year
- BETR (Business Equipment Tax Reimbursement): reimburses property taxes paid on certain equipment that does not qualify for BETE, through a claim filed with Maine Revenue Services
Both require accurate records of equipment placed in service and taxes paid. We keep fixed asset records by location and prepare the applications and claims.
Maine Paid Family and Medical Leave
Maine's paid family and medical leave program began contributions on January 1, 2025, with benefits available starting in 2026. Employers and employees share the contribution, and smaller employers are not required to pay the employer share. Employers report wages and pay contributions quarterly to the Maine Department of Labor. We set up contributions in payroll, file the reports, and reconcile them to the books.
Selling Maine Real Estate
Maine imposes a real estate transfer tax, generally split between the buyer and seller. When a nonresident sells Maine real property, the buyer generally must withhold a percentage of the price for Maine income tax unless an exemption or waiver applies. The withholding is credited on the seller's Maine nonresident return. We help sellers estimate the tax, request waivers where appropriate, and file the return.
Payroll in Maine
Maine employers withhold state income tax, pay paid family and medical leave contributions, and report unemployment insurance to the Maine Department of Labor. Seasonal employers in tourism and fishing have specific rules for unemployment coverage. We run payroll, file reports, and reconcile them to the books.
Estate Tax
Maine has its own estate tax, with an exemption amount below the federal exemption. Estates that owe no federal tax can still owe Maine tax. We help executors with estate accounting and final returns, working with estate counsel.
Lobstering, Tourism, Forestry, and Farming
- Lobstering and commercial fishing: seasonal income, boat and gear depreciation, and federal estimated taxes
- Tourism and hospitality: meals and lodging tax and seasonal payroll
- Forestry and wood products: timber accounting and equipment programs
- Agriculture: potatoes, blueberries, and dairy, with farm reporting
- Shipbuilding and manufacturing: inventory and BETE and BETR claims
Summer Residents and Retirees
Retirees who move to Maine full time can use Maine's pension deduction from the date they become residents. Those who still spend winters in Florida or another state need a clear record of which state is their domicile, because Maine may treat them as residents if they keep a home in Maine and spend more than 183 days there. Summer residents who rent their Maine home to others for part of the year have Maine-source rental income and usually a Maine nonresident return. We help with each situation.
Books Split by Tax Rate
Maine bookkeeping should separate meals, lodging, and general sales for tax rates, track equipment for BETE and BETR, and record wages for paid leave contributions. We build these breakdowns into the chart of accounts and check them at each month-end close.
Contact BOMCAS About Maine
Restaurants and inns collecting the higher meals and lodging rates, employers setting up paid leave contributions, and seasonal residents sorting out where they live for tax purposes can contact BOMCAS for a remote review. Local pages for Maine cities and services are planned under this section. Visit the BOMCAS home page or our United States services for more. This page is general information only.
Talk to BOMCAS About Your Maine Taxes
Have a question about your Maine filings, payroll or bookkeeping? Contact BOMCAS or use the contact form below, and we will get back to you as soon as possible. You can also browse all United States services.