State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

Brought to you by:

Maine (ME)

ME Sales Tax - Name of Tax and General Application:

Maine imposes a tax on sales of tangible personal property at the retail level and certain taxable services in the state. This tax is known as a "sales tax". There is also a tax imposed on the use, storage or consumption of tangible personal property or a service when its sale would have been subject to sales tax in Maine. This is known as a "use tax" and is only imposed in the place of sales tax so that only one is imposed on each item.

ME Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

Maine requires retailers who do business in the state and have a substantial physical presence to collect and pay sales and use tax. Having a substantial physical presence includes soliciting business in the state through catalogs, flyers, calls or electronic media when delivered by U.S. mail or other interstate carriers, attending trade shows or seminars in the state, holding meetings for the board of directors or shareholders within the state, maintaining a bank account in Maine or using vendors in Maine for services such as printing, drop shipping, etc.

ME Local Tax - Do Localities Impose Tax?

No, Maine does not impose local sales tax.

ME Resale Certificate Renewal Agreements:

A resale certificate must be presented to the seller by the purchaser where tangible personal property is being purchased for resale in order to be nontaxable. By providing the certificate, the purchaser assumes responsibility for taxes on all tangible personal property not resold.

ME Resale Certificate Renewal Periods

A certificate issued between January 1st and September 30th is valid for the remainder of that year and 2 additional years. A certificate issued between October 1st and December 31st is valid until the end of the third succeeding calendar year.

ME Statute of Limitations

Later of three years from the date the return was due or from the date the return was filed. If tax understated by 50% or more, six years from the date the return was filed.