Research Areas
Maine
The Facts on Maine's Tax Climate
Last updated July 1, 2009
Here are some basic facts on Maine's tax system and how it compares to other states:
Tax Freedom Day Arrives on April 6 in Maine
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2009, Maine taxpayers had to work until April 6 (ranked 33rd highest nationally) to pay their total tax bill, three days before Tax Freedom Day for the nation as a whole on April 13. The Tax Freedom Days of neighboring states are: New Hampshire on April 10 (22nd nationally) and Massachusetts on April 16 (7th nationally).
Full study of Tax Freedom Day, nationwide and in each state
Maine's State/Local Tax Burden Above National Average
During the past two decades Maine has consistently had one of the highest state and local tax burdens. Its current burden of 10.0% of income is above the national average of 9.7%. Maine has risen 20 places in the rankings, from 35th in 1977 to 15th in 2008. It reached 5th highest in 2005, but it has dropped 10 places since then due to property tax reforms. Maine taxpayers pay $3,835 per capita in state and local taxes.
Maine's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2008
Maine's 2010 Business Tax Climate Ranks 34th
Maine ranks 34th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: New Hampshire (7th) and Massachusetts (36th).
50-State Comparison of Business Tax Climates (data only)
2009 State Business Tax Climate Index, Sixth Edition (full study)
Maine's Individual Income Tax System
Maine's personal income tax system consists of four brackets with a top rate of 8.5%, kicking in at an income level of $20,150. Among states levying personal income taxes, Maine's top rate ranks 9th highest nationally. Maine's 2006 individual income tax collections were $1,042 per person, which ranked 15th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita
Maine's Corporate Income Tax System
Maine's corporate tax structure consists of four brackets with a top rate of 8.93%, kicking in at an income level of $250,000. Among states levying corporate income taxes, Maine's top rate ranked 8th highest nationally. In 2007, state-level corporate tax collections (excluding local taxes) were $140 per capita and ranked 29th nationally.
50-State Table of Corporate Income Tax Rates
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household
50-State Table of State Corporate Income Tax Collections Per Capita
Maine Levies Sales Tax below National Median; Cigarette Taxes among Highest in the Nation
Maine levies a 5% general sales or use tax on consumers, below the national median of 6 percent. State and local governments combined collected approximately $793 per capita in sales taxes in 2006, which ranks 31st highest nationally. Maine's gasoline tax stands at 29.9 cents per gallon and ranks 15th highest nationally. Maine's cigarette tax stands at $2.00 per pack of twenty, which ranks 9th highest nationally. The sales tax was adopted in 1951, the gasoline tax in 1923 and the cigarette tax in 1941.
50-State Table of Sales and Excise Tax Rates
50-State Table of State and Local General Sales Tax Collections Per Capita and Per Household
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita
Maine Property Taxes among Nation's Highest
Maine collected $1,651.47 per capita in local property taxes during fiscal year 2006, which is the latest year the Census Bureau published state-by-state property tax collections. As in most states, the amount collected by the state government of Maine was fairly small. In fiscal year 2006, Maine collected $31.36 per capita at the state level. Combined state/local property tax collections totaled $1,682.83 in FY 2006, which ranked 9th nationwide.
State property tax collections per capita by state
Federal Tax Burdens and Expenditures: Maine is a Beneficiary State:
Maine taxpayers receive more federal funding per dollar of federal taxes paid than the average state. Per dollar of federal tax collected in 2005, Maine citizens received approximately $1.41 in the way of federal spending. This ranks the state 13th highest nationally and represents a rise from 1992, when Maine received $1.30 per dollar of taxes in federal spending and ranked 9th highest nationally. Neighboring states and the federal spending received per dollar of federal taxes collected were: New Hampshire ($0.82) and Massachusetts ($0.71).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state
