Maine residents and businesses should apply use tax to out-of-state purchases when sales tax was not paid at the time of purchase for tangible personal property or certain services used, stored, or consumed within Maine. The use tax rate matches the state sales tax rate of 5.5%.

When to Apply:

• Purchasing goods online or from out-of-state sellers who do not collect Maine sales tax.

• Bringing goods purchased out-of-state into Maine for use.

How to Apply:

1. Determine Taxable Purchases: Identify purchases subject to use tax, excluding exempt items like groceries or prescription medications.

2. Calculate Use Tax: Multiply the purchase price by the 5.5% use tax rate.

3. Report and Pay: Individuals: Report use tax on their state income tax return using Schedule U. Businesses: Report on their sales tax return or through a separate use tax return, depending on their specific circumstances.

4. Maintain Records: Keep documentation of purchases and tax calculations for potential audits.

5. Timely Payment: Ensure use tax is reported and paid by the deadlines to avoid penalties and interest.

Proper application of use tax ensures compliance with Maine tax laws, avoiding potential penalties for non-payment.