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Tax Reform FAQ's
Recent Determinations regarding
TAX RATES
- Rentals of cabins, park models and other RVs at a campground are taxable at 7% while rentals of RVs by an RV dealer are taxable at 5%
- If a motel also has a campground, motel rentals are taxable at 8.5% while the campground rentals are taxable at 7%
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Recent Determinations regarding
CANDY
- Examples of candy items taxed at 8.5%
- Fruit snacks
- Candied or glazed fruit
- Sweetened nuts
- Baking chips
- Baking bars (sweetened)
- Confectionary cake decorations
- Marshmallows
- Fudge
- Lozenges
- Breath mints
- Gum
- Chocolate bars
- Examples of items not subject to the tax imposed on “candy”
- Kit Kat®
- Take 5®
- Twix®
- Twizzlers®
- Caramel Creams
- Whoppers®
- Nestle’s Crunch ®
- Reece’s Crunchy Cookie Cups ®
- Milky Way Crispy Rolls®
- Chocolate covered pretzels
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Recent Determinations regarding
SOFT DRINKS
- Examples of Taxable Soft Drinks
- Carbonated soda
- Sports drinks
- Vitamin, energy, power, sports drinks
- Sweetened Teas, fruit punch drinks, lemonade
- Juice drinks and juice cocktails
- Pedialyte®
- Examples of items not subject to the tax imposed on “soft drinks”
- Yoo-hoo®
- Powder drink mixes
- Coffee drinks containing milk
- Drinks containing more than 50% fruit or vegetable juice
- Concentrates, whether liquid or frozen
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Recent Determinations regarding
AIRPORT TRANSPORTATION FEE
- Commercial airport means any airport with regularly scheduled commercial passenger service
- A hotel or rental car company offering free shuttle service to/from the airport is not subject to this fee nor is an airport shuttle to/from the parking lot
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Recent Determinations regarding
LEASE and RENTALS
- Charges to use a computer/internet at an internet café is not taxable as it is not a rental of tangible personal property
- The right to use a photograph, art, software, etc. is taxable as a lease/rental
- If property being leased is located and used outside of Maine, no tax applies in Maine even though lease is executed in Maine
- The rental of a bucket of golf balls at a driving range is a taxable rental
- Tax does not apply on leases/rentals to a sales tax exempt organization
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Recent Determinations regarding
AMUSEMENT, ENTERTAINMENT and RECREATION SERVICES
- Tax only applies to amusements occurring in Maine
- Advance ticket sales the occur prior to January 1, 2010 are not taxable even if the tickets are for an event that occurs in 2010
- Cover charges to a bar, nightclub, etc. are taxable admission fees IF entertainment is being provided
- Tax does not apply to ski lift tickets, bowling strings, greens fees at a golf course, swimming pool, skating rink, tennis and racquetball court fees and arcade machine receipts
- Receipts from coin-operated pool tables at bowling alleys or arcades are not taxable as these facilities are not “billiard parlors”
- A haunted hay ride is a taxable scenic or sight-seeing excursion
- Scenic or sight-seeing excursions are taxable in Maine whenever the excursion begins in Maine
- Federally navigable waters include all tidal waters and their tributaries, the Kennebec River to Moosehead Lake, the Penobscot River to Medway and Lake Umbagog
- If an admission is charged to see a performance, the admission is taxed but the performer’s fee to the facility is exempt as a sale for resale
- Taxable entertainment services include exotic dancers, adult entertainment, magicians and hypnotists
- A gate fee to an agricultural fair is exempt. Admissions for other events taking place at the fairgrounds are taxable
- If a gate fee includes fees for carnival rides (such as an all-day pass or pay one price), only the gate fee portion is exempt; the carnival rides are taxable
- Lessons in yoga, pilates, golf and other sports are exempt under “other athletic pursuits”
- Exemptions for activities by a school not only applies to a primary or secondary school but also a post-secondary school
- Concerts, dance productions, theatrical productions and sports activities organized by a governmental entity are taxable
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Recent Determinations regarding
INSTALLATION, REPAIR AND MAINTENANCE SERVICES
- Electronic equipment includes TVs, VCRs, audio equipment, etc.
- Mechanical equipment includes pumps, generators, stationary engines, etc.
- Lawn and garden equipment includes lawnmowers (both push and riding), weed wackers, rototillers, etc.
- Office equipment includes office furniture
- Vehicles include those that carry persons or property over the highway and ATVs and snowmobiles
- Repair labor associated with warranty work is taxable if the warranty was sold prior to January 1, 2010 (September 20, 2007 on automobiles)
- Repair labor associated with warranty work is exempt if the warranty was sold on or after January 1, 2010 (September 20, 2007 on automobiles)
- Contractors who act as retailers will be required to apply tax to their labor
- Repair labor is taxable when repairing a component part to a vehicle that is otherwise exempt. Example: repairs to a boat motor is taxable but repairs to a watercraft is exempt
- Software maintenance agreements are exempt if updates are not included. If updates are included, the entire amount is taxable unless the update is separately stated
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Recent Determinations regarding
PERSONAL PROPERTY SERVICES
- Embroidery and monogramming includes screen printing
- Car washing includes interior and exterior cleaning
- Boarding of horses is not taxable
- Picture framing also includes framing a certificate, art, poster, jersey, etc.
- Domestic services are those performed in a home (not a commercial building) to care for the home or to perform activities within the home
- Domestic services do not include janitorial services for a business
- Interior decoration i ncludes developing of a design/plan, wallpapering, painting, and staging a home
- If a personal chef only provides labor to prepare a meal, the chef’s labor is subject to a 5% tax. But if the chef provides all the food ingredients, the entire charge is taxed at 8.5% as “prepared food”
- Art restoration i ncludes photographic restoration
- The “rental” of a safe deposit box is taxable as a storage unit
- Moving services are taxable when the service commences in Maine
- Vehicle towing is taxable w hether paid by the owner of the vehicle or another party
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Recent Determinations regarding
TRANSPORTATION AND COURIER SERVICES
- Taxi service is exempt
- Tax only applies to service to and from points within Maine
- Courier service does not include postal services such as USPS, FedEx, UPS, DHL.
- Fees charged by funeral home for use of a limousine are exempt
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