Maine Tax: Guide to Income, Sales, Property, and Retirement Taxes

Maine flag flying in the sky for Maine state tax guide

(Image credit: Getty Images)

Navigating the complexities of state taxes can be daunting, but understanding Maine's tax landscape is essential for residents and newcomers alike.

In this guide, we'll explore key components of The Pine Tree State's tax system, from income and sales taxes to property taxes and retirement benefits.

Maine state tax: Overview

Maine's state income tax starts at 5.8%, which puts it on the higher end compared to much of the country.

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But there's an upside. There are no local sales taxes in the state, which means what you see is what you pay at the register.

And if you're thinking long term, Maine has an estate tax, though estates under $7 million are in the clear.

Here's more of what you need to know.

[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]

Maine income tax

Maine has a graduate state individual income tax rate that ranges from 5.80% to 7.15%, according to the Tax Foundation.

Maine retirement taxes

Maine Tax on Retirement Benefits: Maine does not tax Social Security or Railroad Retirement benefits. Military benefits are also tax-exempt. Retirees who receive MainePERS benefits may qualify for a pension exclusion of up to $45,864.

Social Security: Not taxable
Pensions: Partially taxable (Federal pension income is exempt)
401(k) and IRA Distributions: Taxable

Maine sales tax

Still life of a small shopping cart with $1 USD bills

The statewide sales tax in Maine is 5.50%, and there are no additional local sales taxes, according to the Tax Foundation.

Grocery: Exempt
Prescription drugs: Exempt
Clothing: Taxable

How much are property taxes in Maine?

In Maine, the effective tax rate is 0.94%, which is about average compared to other states.

Source: Tax Foundation

Maine Property Tax Breaks for Retirees

Property Tax Stabilization Program: Eligible homeowners may have their property taxes frozen, preventing tax increases. Homeowners may transfer the property tax freeze if they move (as long as they qualify). Maine residents must apply for property tax stabilization program.

Homestead Exemption: Maine offers a homestead exemption of up to $25,000 to eligible homeowners. To qualify, homeowners must have owned a home in Maine for at least 12 months.

(Note: Homeowners may need to meet additional criteria to qualify for property tax breaks. Additional tax breaks may be available.)

Maine gas tax

rendering of a yellow car against a yellow background

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Gasoline	$0.30 per gallon
Diesel	$0.31 per gallon

Source: Sales Tax Handbook

Maine taxes on alcohol and tobacco

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Maine tobacco taxes
Product	Tax Amount
Cigarettes	$2.00 per pack
Chewing tobacco/snuff	$2.02 per ounce
Smoking tobacco/cigars	20% of wholesale price
Medical marijuana	5.50%
Recreational marijuana	10%

Source: Sales Tax Handbook

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Maine alcohol taxes
Product	Tax Amount
Wine	$0.60 per gallon
Beer	$0.35 per gallon
Liquor	state-controlled

Source: Sales Tax Handbook

Maine estate and inheritance taxes

Maine has an estate tax with an exemption of $7 million for 2025. Tax rates range from 8% to 12%. Gifts given up to one year before the decedent’s death are considered part of the estate.

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Katelyn has more than 6 years of experience working in tax and finance. While she specialized in tax content while working at Kiplinger from 2023 to 2024, Katelyn has also written for digital publications on topics including insurance, retirement, and financial planning and had financial advice commissioned by national print publications. She believes knowledge is the key to success and enjoys providing content that educates and informs.

With contributions from

Rocky Mengle