Tax Tuesday: Sales Tax Increase Hits Mainers

September 30, 2013

For Immediate Release: Monday, Sept. 30
Contact: Adrienne Bennett, Press Secretary, 207-287-2531

AUGUSTA – The state sales tax goes up Tuesday – the result of the state budget passed by the 126th Maine State Legislature, but vetoed by Governor Paul R. LePage earlier this summer. Mainers will be subjected to a state sales tax rate increase of 10 percent. Additionally, the tax on alcoholic beverages and meals at restaurants and lodging costs will increase by 14 percent.

In June, Governor LePage made clear he did not support the budget, which the Legislature presented. Some legislators said Mainers do not care about small increases in sales and lodging tax.

“Retired mill workers living on fixed incomes, elderly widows collecting Social Security and our veterans, who receive nothing more than their military pension—each of them care very much about this tax increase,” Governor LePage said. “We are already one of the highest taxed states in the nation. We have some of the lowest per capita income in the country. Now is not the time to ask Mainers to give more of their income to fund government.”

Effective October 1, the state sales tax rate will increase from 5 percent to 5.5 percent on all taxable goods, and the 7 percent tax rate will jump to 8 percent on liquor and meals at restaurants and rentals of lodging.

Three simple examples of the tax increases include:

$50 Dinner
Old tax = $3.50
New tax = $4

$300 TV
Old tax = $15
New tax = $16.50

$15,000 Car
Old tax = $750
New tax = $825

Governor LePage released a video after the Legislature overrode his veto of the budget. In the five-minute video, the Governor shares his thoughts about how higher taxes will affect Mainers and condemns decreased funding to programs like Jobs for Maine Graduates,which has already suffered from the loss of federal funding.

Rather than making the difficult decisions to prevent tax increases on hard-working Mainers, the Legislature even included tax increases for extended service contracts on trucks and group residential services for persons with brain injuries.

“When I submitted a balanced budget, I knew there would be areas of concern for many legislators,” said the Governor. “That is why we had nearly six months to work together and make the hard decisions while still protecting our most vulnerable. It was an opportunity for our State to do something great, to make real changes to lower the cost of living for Mainers. Unfortunately, it was an opportunity missed.”