Maine’s state sales tax rate is 5.5%, with no local sales tax rates. Small businesses that do business in Maine are likely to run into several state taxes imposed by Maine Revenue Services and other branches of the state government.
State Corporate and Income Tax
Maine collects a state corporate income tax at a maximum marginal tax rate of 8.930%, spread across four tax brackets. As a business owner, you’ll need to pay Maine income tax on any money you pay to yourself. These earnings flow through to your personal tax return. You’ll be taxed at Maine’s standard rates, and you’ll also be able to apply regular allowances and deductions.
Sales and Use Tax
Maine’s sales tax is collected at the point of purchase. You’ll typically need to collect Maine sales and use tax on qualifying sales. Maine offers tax incentive programs and benefits to encourage business growth and expansion in the state, attracting new companies and fostering their success. For example, Pine Tree Development Zones provide income and payroll tax benefits, as well as other incentives, for locating or expanding within designated zones. Calculate Maine’s retail sales tax by multiplying the percentage as a decimal by the purchase price of each item the business sells.
Taxes on an LLC in Maine
Members of an LLC are taxed at the 15.3% federal self-employment tax rate (12.4% for social security and 2.9% for Medicare). For LLCs that have C-corp tax election, they’ll have to pay the state’s corporate income tax rate.
By default, LLCs in Maine are taxed as pass-through businesses, meaning the LLC passes on its revenues and losses to its members, who then pay the state’s graduated personal income tax rate.
Starting an LLC in Maine
An LLC provides personal liability protection for its owners while giving them flexibility in managing and taxing the business. If you wish to start an LLC in Maine, you must file your Certificate of Formation with the State and pay a filing fee of $175.
Maine is one of the best locations to start a new business in the United States. Registering your business as an LLC can offer many advantages.
Sales Tax for Small Businesses in Maine
What is the sales tax in Maine for small business?
Maine’s sales tax rate is 5.50%. This tax is collected at the state level with no local or county taxes applying in Maine’s counties or municipalities.
It is recommended to consult a tax professional or the Maine Revenue Services for more information on tax deadlines and any additional forms or schedules that may apply to your LLC. Maintain accurate and updated records of your business income and expenses to simplify the tax filing process and to provide clear documentation of your financial transactions.
Navigating Sales Tax Returns
As a small business owner in Maine, you will be required to file and remit sales tax either monthly, quarterly, semiannually, or annually. Maine sales tax returns are almost always due the 15th day of the month following the reporting period.
Municipal governments in Maine can levy a local-option sales tax, which can range from 0% to 0% across the state, for a total of 5.5 percent when combined with the state sales tax. Maine’s state sales tax rate is 5.5 percent on retail sales. Maine also charges other specific taxes and excise fees.