Maine ~ Sales and Use Tax: Budget Bill Enacts Temporary Tax Increases, Taxes Products Transferred Electronically

The Maine budget bill, enacted in an override of Gov. Paul LePage’s veto, enacts temporary sales and other tax increases, creates provisions for taxing products transferred electronically, and repeals the exemption for sales of certain publications. Income tax provisions (TAXDAY, 2013/06/27, S. 14 ) and other tax provisions (TAXDAY, 2013/06/27, S.13 ) are covered in separate stories. The governor’s veto was reported previously. (TAXDAY, 2013/06/26, S.18 )

Sales and Other Tax Increases

Effective from October 1, 2013, to June 30, 2015, Maine’s sales tax rate will increase from 5% to 5.5%, the hotel room tax rate will increase from 7% to 8%, the tax on prepared food will increase from 7% to 8%, and the tax on liquor sold in licensed establishments will increase from 7% to 8%.

Products Transferred Electronically

The Maine sales tax will apply to “products transferred electronically,” effective June 26, 2013. A “product transferred electronically” is sold in Maine if:

the product is delivered electronically to a purchaser located in Maine;

— the product is received by the purchaser at the seller’s location in Maine;

— a Maine billing address is provided by the purchaser in connection with the transaction; or

— a Maine billing address is indicated in the seller’s business records.

A “product transferred electronically” is a digital product transferred to a purchaser electronically, the sale of which in nondigital physical form would be subject to tax as a sale of tangible personal property.

Exemption for Publications

The exemption for sales of any publication regularly issued at average intervals not exceeding three months is repealed effective for sales on or after October 1, 2013.

L.D. 1509 (H.P. 1079 ), Laws 2013, effective as noted


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