Bottom Line
Middle-Class Families: Mixed Tax Picture (Go to the Kiplinger Tax Map for Middle-Class Families)
Retirees: Mixed Tax Picture (Go to the Kiplinger Tax Map for Retirees)
Maine's lowest income tax rate of 5.8% is higher than some other states' maximum rate – that should tell you something. The Pine Tree State's median statewide property tax rate is also above average, although it's not outrageous. And Maine also has an estate tax. That's more bad news.
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But the state tries to make up for some of its other taxes by charging a relatively low sales tax. Maine is one of a few states that don't allow cities and towns to impose their own local sales tax – only the state sales tax of 5.5% is due. That's some good news.
Maine Income Taxes
Maine Income Tax Range
Low: 5.8% (on taxable income less than $23,000 for single filers; less than $46,000 for joint filers)
High: 7.15% (on taxable income of $54,450 or more for single filers; $108,900 for joint filers)
For 2023, the 5.8% rate applies to taxable income less than $24,500 for single filers and less than $49,050 for joint filers. The 7.15% rate applies to taxable income over $58,050 for single filers and over $116,100 for joint filers.
Maine Taxation of Social Security Benefits
Social Security benefits are not taxed by the state.
Maine Tax Breaks for Other Retirement Income
Military pensions and Railroad Retirement benefits are fully exempt.
In addition, up to $25,000 of other federally-taxed retirement income (including income from pensions, 401(k) plans and IRAs), minus Social Security and Railroad Retirement benefits, is exempt. The exemption is increased to $30,000 in 2023, and then to $35,000 in 2024 and thereafter.
Maine Sales Tax
5.5% state levy. No local taxes.
- Groceries: Taxable, but "grocery staples" are exempt
- Clothing: Taxable
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
Maine Real Property Taxes
In Maine, the median property tax rate is $1,093 per $100,000 of assessed home value.
Maine Property Tax Breaks for Retirees
Maine residents 65 years of age or older may be able to claim a Property Tax Fairness Credit of up to $1,500 against their state income tax (up to $1,000 for younger residents). For the 2021 tax year, total income for the year couldn't exceed $42,000 (single) or $68,000 (head of household, married filing jointly or qualified widow). (Income limits for the 2022 tax year have not yet been released.)
Residents age 65 or older who have owned a homestead in Maine for at least 10 years can also apply to have their property tax "frozen" so that it doesn't exceed the tax billed for the year before application. A new application is required each year for which a freeze is requested.
In addition, residents age 65 or older may qualify for a state property tax deferral program if their household income is less than $40,000 and their liquid assets are less than $50,000 ($75,000 for couples). Other requirements apply.
Municipalities in Maine may also enact a property tax deferral program for homeowners age 70 or older. The homeowner must reside in their home for at least 10 years before applying for a deferral and have a household income that doesn't exceed 300% of the federal poverty level. Municipalities can enact other property tax assistance programs for seniors, too.
Maine Motor Fuel Taxes
Gasoline: 30.01¢ per gallon.
Diesel: 31.21¢ per gallon.
Maine Sin Taxes
Cigarettes: $2 per pack
Snuff: $2.02 per ounce
Other tobacco products: 43% of wholesale price
Vapor products: 43% of wholesale price
Beer: $0.35 per gallon
Wine: $0.60 per gallon ($1.24 for sparkling)
Liquor: $11.96 per gallon (the liquor tax is an estimate by the Distilled Spirits Council of the United States and published by the Tax Foundation)
Marijuana: 15% excise tax; 10% sales tax
Maine Estate and Inheritance Taxes
Maine has an estate tax with an exemption of $6.41 million for 2023. Tax rates range from 8% to 12%.
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