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Official Tax Guide

Maine Taxes 2025: Income, Sales, and Property Tax Guide

Complete guide to Maine state taxes. Income tax (5.8% - 7.15%), sales tax, and what you need to know before moving.

Updated January 15, 2026
5 min read

Maine State Tax Guide 2025

Moving to Maine offers stunning coastlines, vibrant communities, and a slower pace of life. However, understanding the state’s tax structure is crucial for budgeting your move. This guide breaks down Maine’s tax landscape for 2025, focusing on income, sales, and property taxes.

1. Income Tax

Maine utilizes a progressive income tax system, meaning tax rates increase as income rises. Maine does not have a flat tax rate; instead, it uses brackets to determine your liability.

  • Tax Structure: Progressive
  • Rate Range: 5.8% – 7.15% (for tax year 2025)

Tax Brackets (Estimates)

While specific income thresholds are adjusted annually for inflation, the general structure for 2025 follows these rates:

  • 5.8%: Applies to income up to the lowest bracket threshold.
  • 6.7%: Applies to income exceeding the first threshold but below the next.
  • 7.15%: Applies to income exceeding the highest threshold (typically over $25,000 for single filers, though exact figures depend on filing status and annual adjustments).

Note: Maine taxes most forms of earned income, including wages, salaries, and self-employment income.

2. Sales Tax

Maine’s sales tax is relatively straightforward compared to many other states, though you should be aware of potential local additions.

  • State Sales Tax Rate: 5.5%
  • Local Taxes: Most municipalities in Maine do not levy additional sales taxes. However, specific districts (such as the Metro Transit District in the Greater Portland area) may add a small percentage (usually 0.5% to 1%) for local transit or infrastructure projects. Always check local rates if you are moving to a major urban center.

Common Exemptions:

  • Groceries (unprepared food)
  • Prescription drugs
  • Clothing (items under $100 per item)

3. Property Tax

Property taxes in Maine are generally considered high relative to the national average, though they vary significantly by municipality.

  • Context: Maine relies heavily on property taxes to fund local services, such as schools and public safety, due to the absence of a statewide sales tax on most goods.
  • Effective Rate: While rates vary, Maine’s median effective property tax rate typically hovers around 1.2% to 1.5% of assessed home value.
  • Valuation: Property is assessed at 100% of its just value (market value).
  • Homestead Exemption: Maine offers a Homestead Exemption for permanent residents, which reduces the taxable value of your primary residence by $25,000. You must apply for this through your local tax assessor.

4. Other Taxes

Beyond income and sales, there are a few other taxes to consider when planning your move.

  • Gas Tax: Maine uses a cents-per-gallon tax system for gasoline and diesel. As of 2025, the state gas tax is approximately 30 cents per gallon (indexed for inflation).
  • "Sin" Taxes: Maine imposes excise taxes on specific goods:
    • Alcohol: Excise taxes vary by type (beer, wine, spirits).
    • Tobacco/Nicotine: A state excise tax applies to cigarettes, tobacco products, and vaping products.
  • Inheritance/Estate Tax: Maine is one of the few states that levies an inheritance tax. However, it applies only to property located in Maine and is paid by the beneficiary, not the estate.
    • Exemption: Spouses are fully exempt. Direct lineal descendants (children, grandchildren) and ascendants (parents, grandparents) are also exempt up to $50,000 per beneficiary. More distant relatives and non-relatives face tax rates ranging from 8% to 12% on amounts above the exemption.

5. Retiree Taxes

Maine is moderately tax-friendly for retirees, but specific rules apply to retirement income.

  • Social Security: Social Security benefits are exempt from Maine state income tax if your federal adjusted gross income (AGI) is below certain thresholds. If your AGI exceeds the limit, a portion of your benefits may be taxable.
  • Pensions and 401(k)s: Most pension income and distributions from 401(k)s and IRAs are taxable in Maine. However, Maine offers a pension deduction for taxpayers age 65 or older.
    • Pension Deduction: For 2025, taxpayers 65+ may be eligible for a deduction of up to $10,000 of pension income (including IRA distributions) on their Maine return.
  • Other Income: Investment income and wages from part-time work are fully taxable.

6. Comparison to Neighbors

How does Maine stack up against its New England neighbors?

  • New Hampshire: No state income tax on wages and no sales tax. However, NH has some of the highest property taxes in the nation. Maine is generally more favorable for retirees relying on pensions (due to NH's lack of pension exclusion) but has a broader income tax base.
  • Massachusetts: MA has a flat income tax rate (currently 5%, subject to change by voter initiative) and a 6.25% sales tax. Maine’s income tax is progressive (up to 7.15%), but its sales tax is lower (5.5%).
  • Vermont: Vermont has a progressive income tax with a top rate of 8.75% and a 6% sales tax. Maine’s top income rate (7.15%) is slightly lower than Vermont’s.
  • Connecticut: CT has a progressive income tax with a top rate of 6.99% and a 6.35% sales tax. Maine’s rates are similar but structured differently regarding brackets.

Disclaimer: Tax laws change frequently and are subject to legislative updates and inflation adjustments. The information provided in this guide is for educational purposes only and should not be considered legal or financial advice. Consult a Certified Public Accountant (CPA) or tax professional for advice specific to your financial situation.