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Dec 19, 2024
Which categories of products and services are taxable in Maine, and what exemptions exist for businesses?
Taxable Products and Services in Maine:**
Tangible Personal Property:
Clothing and footwear
Furniture
Electronics (e.g., TVs, computers, phones)
Household appliances
Tools and hardware
Office supplies
Prepared Food and Beverages:
Restaurant meals
Takeout food
Catering services
Lodging:
Hotel, motel, bed and breakfast accommodations
Campground fees
Automotive:
New and used vehicles
Parts and accessories
Service and repair labor (if separately stated)
Utilities:
Electricity
Natural gas
Telephone and communication services
Certain Digital Goods and Services:
Digital books
Digital movies and music
Online subscriptions and streaming services
Recreational Services:
Admission to amusement parks, concerts, sports events
Fitness club memberships
Fabrication and Installation Services:
Custom manufacturing
Installation of items like countertops or computer systems
Exemptions for Businesses:
Groceries for Home Consumption:
Most grocery items are exempt, except prepared foods and certain snack items.
Medical Items and Supplies:
Prescription medications
Over-the-counter drugs with a prescription
Certain medical devices and supplies
Clothing:
Generally exempt, though specific types or accessories may be taxed.
Residential Utilities:
Electricity, water, and fuel used for residential heating purposes are exempt.
Manufacturing Equipment:
Machinery and equipment used in manufacturing tangible personal property intended for sale are exempt.
Educational Materials:
Textbooks and learning materials purchased by students or educational institutions.
Agricultural Supplies:
Certain supplies used in farming and aquaculture are exempt.
Resale Certificates:
Businesses purchasing goods for resale can use resale certificates to avoid paying sales tax on those purchases.
Implications for Businesses:
Businesses must identify which of their products and services are taxable and which are exempt, ensuring correct tax application. Proper documentation for exemptions is necessary to maintain compliance and support claims during audits. Understanding these categories allows businesses to price their offerings appropriately and manage tax collection accurately.
