Rocky Mengle
Maine state tax: Overview
If you've ever wondered how Maine stacks up when it comes to taxes, here's what you need to know: 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—no local sales taxes anywhere in the state, which means what you see is what you pay at the register.
And if you're thinking long term, Maine does have an estate tax, though estates under $7 million are in the clear.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
[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.
More From Kiplinger
-
How to Turn Your Retirement Dreams into Reality (Despite Your Fears)Stressing over shrinking savings, rising healthcare costs, or losing your purpose can give you chills, but smart money moves can lead to financial freedom and a happy retirement.
-
Figma IPO: Should You Buy FIG Stock?The Figma IPO has plenty of buzz building around it, with the design software company expected to start trading next week.
-
New SALT Deduction Could Put Thousands Back in California Homeowners’ PocketsTax Breaks The federal state and local sales tax (SALT) deduction cap is higher this year, and could translate into bigger savings for Golden State homeowners.
-
Three Surprising Ways Trump’s New Tax Law Could Change Your Child’s Money StoryTax Tips The Trump tax bill could help your child with future education and homebuying costs. Here’s how.
-
Why Your Summer Budget Feels Tighter: Tariffs Push Up InflationTariffs Your summer holiday just got more expensive, and tariffs are partially to blame, economists say.
-
Alabama Tax-Free Weekend 2025Tax Holiday Here’s everything you need to know about the 2025 back-to-school Alabama sales tax holiday.
-
Parents Prepare: Trump's Megabill Brings Three Crucial Tax ChangesTax Changes Are you a parent? The so-called ‘One Big Beautiful Bill’ (OBBB) impacts several key tax incentives that can affect your family this year and beyond.
-
‘I Play Pickleball in Retirement.’ Is It HSA-Eligible?Retirement Tax Staying active after you retire may be easier with these HSA expenses. But there’s a big catch.
-
Mississippi Tax-Free Weekend 2025Tax Holiday Just in time for Prime Day, Mississippi celebrated a tax holiday in July. Find out what back-to-school essentials were included.
-
Ten Cheapest Places to Live in VirginiaProperty Taxes The Commonwealth of Virginia has some cheap places to live. Here are a few if you hate paying property taxes.
