A Maine Tax Guide for Individuals & Small Businesses

Maine Income Tax

Maine has a graduated state income tax with three brackets. For 2026, single filers pay:

5.8% on taxable income up to $27,400
6.75% on income from $27,400 to $64,850
7.15% on income above $64,850

Head-of-household and married brackets are wider, but the same three rates apply. The 2026 standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly.

One nice thing about Maine: there’s no county or city income tax. Your state return is the whole state-level picture — unlike states where you also have to file a separate local return.

Maine Property Taxes & Relief

Maine’s property taxes run higher than the national average, but the state offers two programs many residents miss:

Homestead Exemption — reduces the assessed value of your primary Maine home by $25,000, as long as you’ve owned a home in Maine for at least 12 months and it’s your permanent residence as of April 1.
Property Tax Fairness Credit — a refundable income-tax credit for residents whose property tax (or 25% of their rent) exceeds an income-based threshold. It’s worth up to $2,000, or $2,500 if you’re 65 or older. Because it’s refundable, you can receive it even if you owe no income tax.

If you own a home in Maine and aren’t claiming these, you may be leaving money on the table.

Maine Sales Tax

Maine’s general sales tax is 5.5%, and groceries and most clothing are exempt. But watch the special rates: prepared food and lodging are taxed at a higher rate (currently 8%), and short-term vehicle rentals higher still. If you run a restaurant, a seasonal rental, or any hospitality business, those rates — and the rules around collecting and remitting them — matter for how you price and file.

Maine Small Business Considerations

Maine’s economy runs on small operators — restaurants and retailers, tradespeople and contractors, seasonal and hospitality businesses, and a growing base of remote professionals and real estate investors. A few things we regularly help Maine business owners navigate:

Entity choice — whether an LLC, S-corp, or sole proprietorship makes sense depends on your income and goals, and the right structure can meaningfully cut both your Maine and federal tax.
Seasonal income — tourism and hospitality businesses have lumpy cash flow, which changes how you should handle estimated payments and payroll.
Pass-through planning — most small businesses pass income through to the owner’s personal return, so your business and personal tax planning need to work together, not separately.

Maine Estate Tax

This one catches people off guard: Maine has its own estate tax, separate from the federal one, with a much lower exemption (roughly $7 million for 2026). If you hold significant Maine real estate or other assets, your estate could owe Maine tax even if it falls under the federal threshold — which is worth planning for well in advance.

The Bottom Line

Maine’s tax rules reward people who plan ahead — the property tax credits, the entity choices, the estate thresholds all favor those who understand them going in. If you’d like a team that knows Maine tax inside and out, reach out — we help individuals and businesses across Maine year-round from our Portland office, with personal and business tax services. Ready to go beyond the guide? Work with our Maine accountants.

Thanks,
– Nick