Maine – Guidance on Casual and Infrequent Sales Updated

SALT Report 3107 – Maine Revenue Services updated an information bulletin that addresses the application of sales and use tax to casual or infrequent sales.  The bulletin states that casual sales are those that involve isolated transactions in which tangible personal property or taxable services are sold outside the ordinary course business.  For example:

  • The sale of an entire business by the owner
  • Sales of a nonrecurring nature by a person who is not engaged in the business of selling tangible personal property or taxable services
  • Sales by a manufacturer of used machinery, fixtures, equipment or other items when the seller is not engaged in the business of selling those items

Generally, casual sales of tangible personal property or taxable services are not subject to sales or use tax.  However, section 1764 imposes tax on sales of casual rentals of living quarters in a hotel, rooming house, tourist camp, or trailer camp as well as the following types of property:

  • Motor vehicles, including snowmobiles and all-terrain vehicles
  • Trailers
  • Special mobile equipment, except farm tractors, lumber harvesting vehicles or loaders, and lawn and garden tractors
  • Truck Campers, and
  • Watercraft

If an individual sells its own used household items at a yard sale, or sells them after placing an ad in the classified section of a newspaper, they are making a casual sale and are not required to register as a retailer or to collect sales or use tax from their customers. However, if the property sold is a motor vehicle, watercraft, trailer, or special mobile equipment, the purchaser will be responsible for paying tax directly to the State.

The bulletin warns, that if these sales are operated on a continual basis, or include items that are produced or acquired for resale by the seller, they are not casual sales. In this situation, the person is required to register as a retailer and collect, report, and remit sales tax.  Also, if used household items are sold with items produced or acquired for resale, then all items sold will be subject to tax.

Finally, the bulletin was updated to include new examples and to remove a section that discusses casual sales by nonprofit organizations.

For Further Information

Maine Revenue Services – Sales and Use Tax Instructional Bulletin No. 9