Maine deleted a tax on 1 January 2026 — here's what replaced it
On 1 January 2026 Maine deleted a tax. The Service Provider Tax — 6%, with its own registration and its own return, a thing no other state had — was repealed, and the services it covered moved into the ordinary 5.5% sales tax. If you are reading an older guide to doing business in Maine, that part of it is wrong. Here is what replaced it, and what else the state actually asks of a small business, which is less than you would expect from New England.
Maine used to run two consumption taxes side by side. The sales tax did what sales taxes do; the Service Provider Tax sat next to it at 6%, covering a specific list of services, with a separate registration, a separate return and a separate rate to remember. Since 1 January 2026 there is one tax. The services the SPT covered are now taxed at the ordinary 5.5% rate along with everything else.
For a business starting now, that is straightforwardly good news: one registration, one return, one rate. For a business that already existed, it meant closing one account and opening another partway through a cycle — and the half-point difference between the old 6% and the new 5.5% had to show up on invoices in January.
- Sales tax
- 5.5% state · typically 5.5%
- Local income tax
- None
- State business licence
- Not required statewide
- Workers' comp from
- 1 employee
- Formation approved in
- Filed with the Bureau of Corporations; Maine's published turnaround was not confirmed in this pass
- First 90 days, all in
- $250–$1,100 · $175 of it to the state
Official portals: Maine Bureau of Corporations, Elections and Commissions · Maine Revenue Services — Sales, Use & Service Provider Tax · Maine Paid Family and Medical Leave — employer registration. Figures checked September 2026; the portal always wins.
Which businesses this actually moved
The repeal is only interesting if you sell one of the things the Service Provider Tax covered. That list was short and specific:
Cable and satellite television and radio
Providers were registered under the SPT and are now registered for sales tax, charging 5.5% on the same service they charged 6% on in December.
Fabrication services
Making or processing tangible property from a customer's own materials. If you machine, print, sew or assemble on someone else's stock, this is you.
Telecommunications and ancillary services, and the installation and repair of telecoms equipment
Both the service and the work on the kit. A small telecoms installer had an SPT registration and needs a sales tax registration instead.
Rental of video and audio media and equipment
Hire of media and the equipment to play it — a category that has shrunk a great deal since the tax was written, which is part of why it went.
If your business is not on that list, the repeal changed nothing for you and there was never an SPT registration to close. Most personal and professional services in Maine — advice, design, accounting, trades billed as labour — are outside the sales tax altogether, and always were.
The state sets the extra rates, not the towns
There is no local sales tax anywhere in Maine. Kittery and Fort Kent charge the same, and a business selling across the state looks up one rate, holds one certificate and files one return. What Maine does instead of letting towns add points is set higher state rates for hospitality itself.
| What's being sold | Rate |
|---|---|
| General goods and taxable services | 5.5% |
| Services formerly under the Service Provider Tax | 5.5% (was 6%) |
| Prepared food | 8% |
| Lodging rentals | 9% |
| Local add-on, anywhere in the state | None |
Registration is free, on the Maine Tax Portal, and you hold one certificate per place of business. Most filers report monthly, but below roughly $600 of average monthly liability you can ask Maine Revenue Services to put you on a less frequent schedule — worth doing early, because twelve small returns a year is twelve chances to be late.
The rest of the recurring state bill is one line: an $85 annual report due June 1. There is no franchise tax on the entity, no state business licence and no municipal income tax. The formation fees for all fifty states are on the LLC hub; Maine's is $175.
Hiring: paid leave now has two rates, and comp has teeth
Maine Paid Family and Medical Leave is the one payroll obligation here that is not obvious, and it is sized by headcount rather than payroll. An employer with 15 or more employees contributes 1% of wages and may deduct half of that — 0.5% — from the employee. An employer with fewer than 15 contributes 0.5% and may deduct all of it, so the business's own share is nil. Contributions started on 1 January 2025 and benefits became claimable on 1 May 2026, which means staff can now actually take the leave you have been paying into.
Workers' compensation is required from the first employee, with no headcount minimum, but Maine's exemptions are unusually specific: LLC owners are not required to cover themselves, a corporate officer holding 20% or more of the voting stock can waive benefits in writing, and domestic servants in private homes are outside it. Agricultural employers may substitute employers' liability cover — $25,000 for seasonal labour, or $100,000 per employee where there are six or fewer full-time equivalents.
Going without is not a fine you can absorb. Civil penalties reach $10,000 or 108% of the unpaid premium, whichever is larger, and the state can add Class D criminal charges and licence revocation on top. Nobody prices comp against that and decides to risk it.
Common questions
Is the Maine Service Provider Tax still in force?
No. It was repealed with effect from 1 January 2026 and the services it covered — cable and satellite television and radio, fabrication services, telecommunications and ancillary services, installation and repair of telecoms equipment, and rentals of video and audio media and equipment — moved into the ordinary sales tax at 5.5%. Guides written before 2026 that describe a separate 6% tax with its own return are out of date.
What is the sales tax rate in Maine?
5.5% on general goods and taxable services, with no local add-on anywhere in the state. Maine sets higher state rates for hospitality instead: prepared food is 8% and lodging rentals 9% as of 1 January 2026.
Does it cost anything to register for sales tax in Maine?
No. The sales tax registration certificate is free from the Maine Tax Portal, and you hold one per place of business. Most filers report monthly, but if your average monthly liability is under about $600 you can ask Maine Revenue Services for a less frequent filing schedule.
How much is Maine Paid Family and Medical Leave and who pays it?
It depends on headcount. An employer with 15 or more employees contributes 1% of wages and may deduct half — 0.5% — from the employee. An employer with fewer than 15 contributes 0.5% and may deduct all of it, so the employer's own share is nothing. Contributions began on 1 January 2025 and benefits became claimable on 1 May 2026.
Do I need workers' compensation for a one-person LLC in Maine?
Not for yourself — LLC owners are not required to cover themselves. You need it from the first employee you hire. The penalties for going without are among the harshest anywhere: civil penalties of $10,000 or 108% of the unpaid premium, whichever is larger, plus possible Class D criminal charges and licence revocation.
Is there a local business licence or a town income tax in Maine?
No town income tax, and no general municipal business licence. Maine towns license by activity instead — a victualer's licence to serve food, innkeeper and liquor licences, local health and building permits — and fees are set by each municipality.
One rate, one return, and a website that's already taking payments.
Describe your business and Velofound lays out Maine's short list — the tax registration if you need one, the 1 June report, PFML when you hire — beside a live site taking cards into your own Stripe account. Free to start.
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