Maine’s state income tax rates start at 5.8%. Estates under $6.41 million are exempt from estate tax. Social Security and military benefits are tax-exempt. Massachusetts and other New England states have higher tax rates than Maine. New Hampshire has lower total taxes. Maine ranked the safest state with lowest crime. Some retirement income is taxed in Maine. Maine has 11th highest total tax burden. Reasons for higher Maine taxes include changed tax structure, inflation, proposed reforms, refined tax brackets.
Maine taxes groceries and prescription drugs.
Property Taxes in Maine
Maine’s median property tax is $1,936 per year for a home valued at $177,500. Maine ranks 17th for property taxes as a percentage of median income. Hancock County has the state’s lowest average property tax rate at 1%. Androscoggin County has the highest at 1.65%. The average bill in Hancock County is $2,240. In Cumberland County, with higher home values, the average payment exceeds $4,200.
Property taxes pay for local services like schools and roads. Factors determining rates include property value, municipality, and exemptions. The Homestead Exemption saves eligible residents $25,000 in value. The Renewable Energy Investment Exemption is available too. The average rent in Maine is $934 a month.
Comparing Tax Burdens
Maine has a progressive income tax system with rates from 5.8% to 7.15%. Maine ranks 35th overall for state business taxes. Maine ranks 17th for property taxes as a percentage of median income.
New York, Hawaii, and Vermont have higher total tax burdens than Maine.
The ten states with the highest tax burdens are:
- New York
- Connecticut
- Hawaii
- Vermont
- California
- New Jersey
- Illinois
- Virginia
- Delaware
- Maine
New York has the highest taxes at 15.90% of income. Only New Hampshire has lower total taxes than Maine in New England. States with flat income tax rates are generally lower except for Idaho at 5.80%.