Maine- Budget Bill Creates Temporary Tax Increases, Taxes Products Transferred Electronically

SALT Report 2624 – On June 26, 2013, the Maine Senate overrode Governor Paul LePage’s veto of the state’s budget bill which creates temporary sales tax rate increases and provides that products transferred electronically are now taxable.

Sales Tax Increases

Effective October 1, 2013 through June 30, 2015 the following items will be subject to a temporary sales tax rate increase:

  • Maine’s state sales tax rate will increase from 5% to 5.5%,
  • The hotel room tax rate will increase from 7% to 8%,
  • The prepared food tax will increase from 7% to 8%, and
  • The tax on liquor sold in licensed establishments will increase from 7% to 8%

Products Transferred Electronically

Effective June 26, 2013, sales tax will apply to all products transferred electronically if sold in Main. A product is considered sold in Maine if:

  • The product is delivered electronically to a purchaser located in Maine
  • The product is received by the purchaser at the seller’s location in Maine
  • A Maine billing address is provided by the purchaser in connection with the transaction, or
  • A Maine billing address is listed in the seller’s business records

The Bill defines a product transferred electronically as a digital product transferred to a purchaser electronically and is taxable if the sale of the same item in a non-digital physical form would be subject to tax as a sale of tangible personal property.

For Further Information

Maine State Legislature – H P 1079, Laws 2013