Navigating the complexities of state taxes can be daunting, but understanding Maine's tax landscape is essential for residents and newcomers alike.
In this guide, we'll explore key components of The Pine Tree State's tax system, from income and sales taxes to property taxes and retirement benefits.
Maine state tax: Overview
Maine's state income tax starts at 5.8%, which puts it on the higher end compared to much of the country.
But there's an upside. There are no local sales taxes in the state, which means what you see is what you pay at the register.
And if you're thinking long term, Maine has an estate tax, though estates under $7 million are in the clear.
Here's more of what you need to know.
[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Maine income tax
Maine has a graduate state individual income tax rate that ranges from 5.80% to 7.15%, according to the Tax Foundation.
Maine retirement taxes
Maine Tax on Retirement Benefits: Maine does not tax Social Security or Railroad Retirement benefits. Military benefits are also tax-exempt. Retirees who receive MainePERS benefits may qualify for a pension exclusion of up to $45,864.
- Social Security: Not taxable
- Pensions: Partially taxable (Federal pension income is exempt)
- 401(k) and IRA Distributions: Taxable
Maine sales tax
The statewide sales tax in Maine is 5.50%, and there are no additional local sales taxes, according to the Tax Foundation.
- Grocery: Exempt
- Prescription drugs: Exempt
- Clothing: Taxable
How much are property taxes in Maine?
In Maine, the effective tax rate is 0.94%, which is about average compared to other states.
Source: Tax Foundation
Maine Property Tax Breaks for Retirees
Property Tax Stabilization Program: Eligible homeowners may have their property taxes frozen, preventing tax increases. Homeowners may transfer the property tax freeze if they move (as long as they qualify). Maine residents must apply for property tax stabilization program.
Homestead Exemption: Maine offers a homestead exemption of up to $25,000 to eligible homeowners. To qualify, homeowners must have owned a home in Maine for at least 12 months.
(Note: Homeowners may need to meet additional criteria to qualify for property tax breaks. Additional tax breaks may be available.)
Maine gas tax
Gasoline |
$0.30 per gallon |
Diesel |
$0.31 per gallon |
Source: Sales Tax Handbook
Maine taxes on alcohol and tobacco
Product |
Tax Amount |
|---|---|
Cigarettes |
$2.00 per pack |
Chewing tobacco/snuff |
$2.02 per ounce |
Smoking tobacco/cigars |
20% of wholesale price |
Medical marijuana |
5.50% |
Recreational marijuana |
10% |
Source: Sales Tax Handbook
Product |
Tax Amount |
|---|---|
Wine |
$0.60 per gallon |
Beer |
$0.35 per gallon |
Liquor |
state-controlled |
Source: Sales Tax Handbook
Maine estate and inheritance taxes
Maine has an estate tax with an exemption of $7 million for 2025. Tax rates range from 8% to 12%. Gifts given up to one year before the decedent’s death are considered part of the estate.
