Key Differences Between Origin and Destination-Based Sales Tax:**

1. Tax Rate Determination: Origin-Based: Sales tax is determined by the seller's location. All sales within the same origin area (e.g., city) apply the same tax rate. Destination-Based: Sales tax is determined by the buyer's location. The tax rate corresponds to the destination where the product is delivered or the service is provided.

2. Complexity for Sellers: Origin-Based: Simpler for sellers with a single tax rate within their origin area. Destination-Based: More complex as sellers must apply different rates based on the buyer’s location.

3. Revenue Distribution: Origin-Based: Revenue goes to the seller's location (city/county/state). Destination-Based: Revenue is directed to the buyer's location (city/county/state).

4. Impact on Remote Sellers: Origin-Based: Remote sellers might not need to collect taxes unless they have a presence in the origin area. Destination-Based: Remote sellers must collect taxes based on each buyer’s location, potentially increasing their tax obligations.

Why Maine Uses Destination-Based Sales Tax:

Maine’s choice of a destination-based sales tax aligns with the broader trend among states to follow this model, especially post the South Dakota v. Wayfair, Inc. decision, which allows states to require out-of-state sellers to collect sales tax based on the destination of goods. The destination-based system ensures that tax revenue supports the localities where consumers reside and use the products or services, promoting fairness and local funding for public services. It also encourages uniformity in tax application, benefiting consumers by standardizing tax rates based on where they shop, regardless of the seller’s location.