Maine – Guidance on Sales of Fuels and Utilities

SALT Report 3081 – Maine Revenue Services updated its sales and use tax bulletin for sales of fuel and utilities to reflect that sales of electricity, water, and gas to nursing homes and purchases of wood pellets or 100% compressed wood products are exempt from tax.

Electricity

The bulletin provides that all charges by an electric utility for the first 750 kilowatt-hours of residential electricity sold per month are exempt.  The exemption includes charges for transportation and delivery and fuel adjustment charges whether they are separately stated or not.

In addition, the following uses of residential electricity will qualify for this exemption:

  • Electricity used in homes, mobile homes, boarding homes, nursing homes, and apartment houses,
  • Electricity provided through common meters in apartment houses for the purpose of lighting hallways, laundry rooms, etc.,
  • Electricity used in seasonal dwellings, and
  • A “minimum residential billing,” even if no electricity was used

Gas

Sales of gas are exempt from sales tax when bought for heating or cooking in buildings designed and used for both human habitation and sleeping.  Also, gas consumed by a generator that is used to create electricity during a power outage is exempt from tax, when used by an exempt residential user.

Water

Sales of water, including bottled water, are exempt when purchased for use in buildings designed and used for human habitation and sleeping, with the exception of hotels.

Wood

Effective October 1, 2013, purchases of any amount of wood pellets or other 100% compressed wood products intended for use in a wood stove or fireplace are presumed to be a purchase for use in residential cooking or heating and therefore, are exempt.  In addition, purchases of one cord of wood or less are also exempt.

The bulletin also addresses taxable sales and uses of fuel, water, and electricity; commercial exemptions; sales by competitive electricity providers; direct billing; partial exemptions; and other exempt sales.

For Further Information

Maine Revenue Services – Sales and Use Tax Instructional Bulletin No. 13