If you’re starting a business in Maine, you need to register for several things. Perhaps one of the most common registrations is the Maine sales tax license. This license is sometimes called a retailer certificate, seller’s permit, sales tax permit, sales and use tax number or sales tax registration.
Keep reading this guide to learn about who needs a sales tax permit, what kinds of products and services are taxable, how to register, and what to do for reporting.
Related: Maine Startup Checklist
Who needs a sales tax license in Maine?
A business must register for a sales tax license in Maine when:
- A business has sales tax nexus (also called economic nexus). Nexus means having a physical presence in the state, such as having a physical location like a retail store or office or using a warehouse or fulfillment center to store inventory.
- Occasionally selling items at craft shows, fairs, seminars, conventions, etc. in Maine.
- Hiring employees in Maine (including remote employees, sales representatives, or agents)
- A Maine business sells taxable services or products to Maine residents.
- A remote seller sells over $100,000 in physical goods or has over 200 transactions annually to residents in Maine.
What products and services are taxable in Maine?
Physical Products
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 are tax-exempt.
Digital Products
Digital products are subject to sales tax if the non-digital physical form is taxable. For example, the sale of digital music, books, movies, etc., is taxable since selling a CD, paper book, or DVD is taxable.
Services
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 under a rental-purchase agreement
How to register for a sales tax license in Maine
A sales tax license can be obtained 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
- Employer Identification Number (EIN) from the IRS or owner’s Social Security Number if a sole proprietorship with no employees
- Primary mailing address, phone, email
- The physical location of the business
- Type of business entity: sole proprietorship, general partnership, corporation, Limited Liability Company (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
Sales tax reporting
How is sales tax collected?
When a business sells a taxable product or service, it charges the appropriate sales tax rate to the customer. The business collects this tax, which is then sent to the Maine Revenue Services.
How much is sales tax in Maine?
The sales tax rate charged varies depending on the business address, whether the purchase is made or shipped from a business in the state, or where the transaction occurred, such as at a fair or tradeshow.
In addition to the statewide tax, cities, and municipalities may add additional sales taxes. 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 annual sales volume, monthly, quarterly, semiannually, or annually. Generally, a business that collects over $600 monthly in sales taxes will file monthly.
Filings are due on the 15th day of the month following the reporting period unless the 15th falls on a weekend or federal holiday, which would move to the next business day.
A filing indicating no sales is still required even if the business had no sales during the reporting period.
Maine Sales Tax License FAQs
How much does a Naune sales tax license cost?
There is no cost for a sales tax license in the state of Maine.
How long does it take to get a Maine sales tax license?
When filing online, expect to receive a sales tax number in 2-3 business days or up to 3 weeks. A physical Retailer Certificate will be mailed a few weeks after registration.
Do you have to renew a 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.
How do I get a wholesale license in Maine?
A business can 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 a copy of the buyer’s Maine Resale Certificate (also referred to as a wholesale license, seller’s permit, or sales tax exemption certificate). To qualify, a retailer must have an active Retailer Certificate and report gross sales of $3,000 or more annually.
Is a business license the same thing as a sales tax license?
No – A business license and a sales tax permit serve different purposes and are not the same.
A business license authorizes you to conduct business within a particular locality, ensuring compliance with local regulations. Conversely, a sales tax permit enables your business to legally collect sales tax on sales, which you then remit to the state government.
Generally, businesses require both a license and a permit to operate legally and handle taxes correctly.
