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Most businesses starting in Maine that are selling a product or offering certain services will need to register for a sales tax license. This is commonly referred to as a retailer certificate, seller’s permit, sales tax permit, sales tax number or sales tax registration.
Check out the rest of this guide to find out who needs a sales tax license, what products and services are taxable, how to register for a permit and reporting requirements.
Who needs a sales tax license in Maine?
A business must register for a sales tax license in Maine when:
- A business has “nexus” (significant presence in the state) such as a retail store, office or warehouse where products are produced, stored and/or delivered
- Occasionally selling items at craft shows, fairs, seminars, conventions, etc in Maine
- Employees (including sales representatives or agents) are working in Maine
- An online business located in Maine is selling taxable products to Maine residents
- An out-of-state business selling to Maine residents and one of the
- Total sales of tangible personal property to Maine residents is $100,000 or more; or
- Having 200 or more transactions to Maine residents.
What products and services are taxable in Maine?
There are a few exceptions, but almost all physical products are taxable when sold at retail in Maine. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Some grocery items, prescriptions, medical equipment and certain manufacturing equipment is tax-exempt.
Labor in most cases isn’t taxable in Maine, provided the sales receipt separates the cost of parts from labor. For instance, let’s say you broke the screen to your cell phone and take it to a cell phone repair shop to have it fixed. Sales tax would be added to the selling price of the new screen and any additional parts to fix the phone. The labor to replace the screen isn’t taxable. However, a business that makes furniture will indirectly have sales tax on labor. In this instance, let’s say this business is building a dining room table for a customer. Through labor, the pieces of wood are shaped, sanded and painted to build this piece of furniture. While the labor isn’t directly taxable, sales tax is charged to the final selling price of the table.
Digital products are subject to sales tax if the nondigital physical form would be taxable. For example, the sale of digital music, books, movies, etc. are taxable since the sale of a CD, paper book or DVD are taxable.
Most services aren’t taxable in Maine, however there are a few exceptions, some of which include:
- Short-term lodging
- Rental of video media and video equipment
- rental of furniture, audio media and equipment pursuant to a rental-purchase agreement
How to register for a sales tax license in Maine
A sales tax license can be obtained by using the Sales & Use, Withholding and Service Provider Tax Registration Service through Maine Revenue Services or by mailing in the 1110910 Form.
Information needed to register includes:
- Legal business name
- Social Security Number
- Federal Employer Identification Number (FEIN)
- Primary mailing address, phone, email
- Physical location of business
- Type of business entity (Sole Proprietorship, Partnership, Corporation, LLC)
- Description of what products or services are being sold
- North American Industry Classification System (NAICS) code
- Names and addresses of owners/officers/members
- Date business activities began or will begin
- Projected monthly sales
- Projected monthly taxable sales
- Employee information
How much does a sales tax license cost in Maine?
There is no cost for a sales tax license in Maine.
How long does it take to get a Maine sales tax license?
Expect 2-3 business days when filing online or up to 3 weeks to receive a sales tax number. A physical Retailer Certificate will be mailed a few weeks after registration.
Do you have to renew your Maine sales tax license?
The sales tax license is a one-time registration and no renewals are needed. Be mindful that if any information about the business changes such as the mailing address, additional locations or change in ownership, those changes need to be updated with the Revenue Services.
Sales tax reporting
How is sales tax collected?
When a business makes a sale of a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business who then sends it to the Maine Revenue Services.
How much sales tax is charged?
The sales tax rate that is charged varies depending on the address of the business if the purchase is made or shipped from a business located in the state or where the transaction took place such as a fair or tradeshow.
In addition to the statewide tax, there are additional sales taxes that may be added by cities and municipalities. To find the sales tax for your location, see the sales tax rate table from Maine Revenue Services.
When are Maine sales tax returns due?
Maine Revenue Services will determine a filing frequency based on the expected volume of annual sales, which will be monthly, quarterly, semiannually or annually. Generally, a business collecting over $600 monthly in sales taxes file monthly.
Filings are due the 15th day of the month following the reporting period, unless the 15th falls on a weekend or federal holiday, in which case would move to the next business day.
Even if the business had no sales during the reporting period, a filing is still required indicating no sales occurred.
Sales tax on purchases for resale
A business is able to purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer who will then charge sales tax to the end user of the item.
Wholesalers and distributors will require a sales tax number, and in many cases require the reseller to provide a copy of the Resale Certificate. To qualify, a retailer must have an active Retailer Certificate and report gross sales of $3,000 or more per year.
If you have questions about the sales tax license, Maine Revenue Services has a guide to sales taxes in Maine or can be contacted by calling 207-624-9693 option 4.