Maine Tax Guide: Progressive Brackets & Deductions

Navigate Maine's income tax brackets, sales tax rates, and property tax obligations for the 2025 tax year.

7.15%

Top Income Tax Rate

5.50%

Sales Tax Rate

1.24%

Property Tax Rate

#11

Tax Burden Rank

Tax Overview

Maine has a progressive income tax system with three brackets, reaching a top rate of 7.15% on income above approximately $58,050 for single filers. This top rate is among the higher state income tax rates in the nation and applies at a relatively modest income level. Maine uses federal adjusted gross income as a starting point, with various additions and subtractions to determine state taxable income.

Sales tax in Maine is moderate at 5.5% with no local additions, providing a uniform rate statewide. Maine exempts groceries and prescription drugs from sales tax. The state does, however, impose higher rates on prepared food (8%), short-term lodging (9%), and auto rentals (10%), which particularly affect the tourism industry.

Property taxes in Maine are above the national average, with effective rates around 1.24%. The state offers a Homestead Exemption that reduces the taxable value of a primary residence by $25,000. Maine also has a Property Tax Fairness Credit that provides refundable tax credits to qualifying homeowners and renters based on income. The combination of high income taxes and above-average property taxes gives Maine one of the higher tax burdens in New England.

Income Tax

Maine's top rate of 7.15% kicks in at a relatively low income threshold, making it one of the higher-tax states for middle and upper-income residents.

Income Range	Tax Rate
$0 – $26,050	5.8%
$26,051 – $58,050	6.75%
$58,051 +	7.15%

Sales Tax

State Rate5.50%

Avg. Local Rate0.00%

Combined Rate5.50%

Property Tax

Effective Rate1.24%

Median Annual Bill$2,756

Key Deductions in Maine

✓Standard deduction matching federal amounts
✓Maine Homestead Exemption ($25,000 off assessed value)
✓Property Tax Fairness Credit (refundable, income-based)
✓Pension income deduction (up to $25,000 for qualifying plans)
✓Earned income tax credit (12% of federal EITC)
✓Maine 529 plan contribution deduction

Filing Information

Filing Deadline: April 15

Tax Authority: Maine Revenue Services

Phone: (207) 624-9693

Website: https://www.maine.gov/revenue

Frequently Asked Questions

What is Maine's Property Tax Fairness Credit?

This is a refundable tax credit available to Maine homeowners and renters based on income and property tax (or rent) paid. It helps offset property tax burden for lower and middle-income residents. The credit is claimed on your state income tax return.

Does Maine tax retirement income?

Maine provides a pension income deduction of up to $25,000 for qualifying retirement plan distributions. Social Security benefits are taxed following the federal formula, but a deduction is available for lower-income recipients.

Are groceries taxed in Maine?

No, Maine exempts grocery food items from the 5.5% sales tax. However, prepared food is taxed at an 8% rate, and restaurant meals are also subject to this higher rate.

What is the Maine Homestead Exemption?

Maine homeowners who have owned and occupied their home as a primary residence for at least 12 months can claim a $25,000 reduction in their property's taxable value. The exemption is applied automatically once you apply through your town.

Neighboring State Guides

New Hampshire

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