For the latest news and updates on Maine state and local tax
June 25, 2021
Maine Adopts Nexus Standards for Corporate Income Tax Purposes, and Modifies Economic Nexus Rule
Effective January 1, 2022, a corporation has nexus in Maine if it is (1) organized or commercially domiciled in Maine, or (2) organized or commercially domiciled outside of Maine, but the corporation has (a) property or payroll in Maine that exceeds $250,000, (b) sales in Maine that exceed $500,000, (c) 25% of the corporation’s property, payroll, or sales are in Maine, and/or (d) a corporation holds interest in a partnership and the partnership meets any of the thresholds listed above. Further, the State’s current economic nexus rules provide that persons selling tangible personal property or taxable services in at least 200 separate transactions will be subject to sales and use tax. Effective January 1, 2022, the 200 separate transaction element will be repealed, but the economic nexus threshold for gross sales exceeding $100,000 in the previous calendar year or the current calendar year threshold will continue to be in effect.
April 14, 2021
Maine Now Conforms to Most Federal Tax Law Changes Enacted on or before December 31, 2020
Maine’s income and estate tax laws now conform to the federal Internal Revenue Code (“IRC”) as amended through December 31, 2020. This includes conformity to the federal treatment of the Paycheck Protection Program (“PPP”) loan forgiveness (exclusion from income and the allowance of the deduction for related expenses). The Maine Legislature has not yet considered conformity with federal tax laws enacted after December 31, 2020, including the American Rescue Plan Act of 2021 (“ARPA”), except for the federal exclusion of up to $10,200 of unemployment compensation reportable for tax years beginning in 2020. Up to $10,200 of unemployment benefits, to the extent excluded from federal adjusted gross income, is also excludable for Maine income tax purposes.
March 25, 2021
Maine Amends Regulation on Sales for Resales
Effective March 15, 2021, Maine’s regulation addressing sales for resale and sales of packaging materials is amended to clarify that a sale for resale is not an “exemption”; rather it is an exclusion from the definition of “retail sale.” As such, the State will no longer issues “provisional” resale certificates. If you or your business is making resale sales into Maine, make sure you are aware of any administrative related changes that may result from this technical change.
March 23, 2021
Maine Update on Extension of Filing Deadline
The filing and payment deadline for tax year 2020 individual income tax returns is extended to May 17, 2021, from the usual April 15, 2021, deadline in order to correspond to the federal tax extension. The extension is automatic; taxpayers do not need to do anything to receive the extension. However, the extended deadline does not apply to corporate returns and payments and it does not apply to personal and corporate income tax estimated payments; the due date for those remains April 15, 2021. Maine Revenue Services is expected to provide formal guidance shortly. ( Press Release: Governor Mills Announces Extension of State Income Tax Deadline to May 17, 2021, Office of Governor Janet T. Mills, 03/18/2021 .)
March 9, 2021
Recent Maine Ruling Held Discounted Phone Pricing Was Subject to Sales Tax
A phone manufacturer offered discounts on iPhone purchases to customers who signed up for a wireless plan with certain unrelated wireless carriers. However, the contracts with the wireless carriers called for the phone manufacturer to be reimbursed for the amount discounted on the phone purchases. While true discounts are generally excluded from the definition of “sales price” for purposes of sales tax in Maine, in this case the State’s Judicial Court ruled that because the retailer expected to be reimbursed for the discount at the time of the sale—making it a recoup of profits rather than a discount—such “discount” should have been part of the taxable sales price.
Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.