Maine vacation rental tax guide
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With a bounty of popular destinations including Portland, Bar Harbor, and Acadia National Park, the Pine Tree State offers ample opportunity for short-term rental (STR) businesses.
But these opportunities come with tax obligations. Like hotel stays, STR stays in Maine are subject to lodging tax. Failure to comply with state and local tax laws can result in fines and penalties. Tax jurisdictions are increasingly making STR tax compliance a priority, so it’s important to address compliance before tax authorities address it for you.
Avalara MyLodgeTax put together this guide to help you comply with Maine lodging tax laws at the state level. For more information on the tax rates and jurisdictions that apply to your rental’s specific location, use our lodging tax lookup tool.
No lodging tax guide is a substitute for professional tax advice. Consider this an asset to help you understand and prioritize your STR questions and concerns. Questions pertaining to specific situations or out-of-the-ordinary conditions are best solved with a certified tax professional familiar with Maine tax laws.
Lodging tax basics
Lodging taxes are calculated as a percentage of the cost of your guest’s stay and added to the price on the bill. The guest pays the tax, but the STR operator is responsible for collecting and paying it to the proper tax authority.
What’s the definition of “short-term rental” in Maine?
Maine imposes lodging taxes on “rental of living quarters in any hotel, rooming house, tourist or trailer camp” for a period of 27 days or less.
Who’s required to collect and file lodging taxes on short-term rentals in Maine?
If you collect payment from short-term guests renting out a room, apartment, house, or other dwelling, you’re likely responsible for collecting, filing, and remitting lodging taxes to Maine tax authorities.
However, if you have only one rental property and rent it out for fewer than 15 days per year, you’re not required to collect lodging taxes on those stays.
If a real estate agent or other person is engaged in the business of renting or managing rentals of living quarters, the agent must collect and report lodging tax.
Location is key to compliance
The location of your rental is a crucial piece of information for lodging tax compliance. Your address determines which tax jurisdictions you’re required to report to, which taxes you need to collect, and the appropriate tax rates.
Use our lodging tax lookup tool to get a rate report specific to your Maine rental’s address. The report includes the estimated total tax rate to collect from guests, number of required registrations, number and frequency of returns per year, and minimum number of rented days to qualify as a taxable stay.
It should be noted that tax rates and the rules governing them change frequently. Please consider your tax rate report to be informative rather than authoritative.
Local short-term rental regulations
STR operators in Maine should be aware of the local regulations that apply to them, including rules covering:
- Legality
- Permits, licenses, and registration
- Zoning
- Advertising
- Neighborhood notification
- Building and housing standards
Homeowner associations (HOAs), condominium communities, co-ops, and landlords may also have specific rules regarding STRs. It’s your responsibility to be aware of STR policies that apply to your property.
Registering with state tax authorities
STR operators in Maine are legally required to register with Maine Revenue Services. You can register online to receive a Retailer’s Certificate.
Collecting lodging tax
Once you’ve registered with tax authorities, you’re ready to start collecting lodging taxes, which you’ll add to your guest’s bill when they pay for their stay.
Which taxes apply to Maine short-term rentals?
In Maine, STRs are subject to state sales tax.
| Tax name | File and remit to |
|---|---|
| State sales tax | Maine Revenue Services |
Tax rates
Before you can begin collecting sales tax, you need to know the correct rate to charge to avoid compliance issues. Our lodging tax lookup tool can give you a rate report specific to your Maine address.
What charges are taxable?
In Maine, all charges that are mandatory for a guest to stay at a rental are taxable. This includes items such as cleaning fees, pet fees, rollaway bed fees, extra person fees, etc. However, optional extra fees, such as for laundry services, are not subject to sales tax. Cancellation fees are also not subject to tax, as long as the guest cancels on or before the scheduled date of arrival. However, any deposit forfeited because the guest does not show up is taxable.
What happens when my short-term rental marketplace (such as Airbnb or Vrbo) collects lodging taxes for me?
“Transient rental platforms” such as Airbnb and Vrbo are required to collect sales tax from Maine guests when listings are booked. If taxes aren’t being collected for you, you’re responsible for collecting and remitting them to state tax authorities.
Are guests ever exempt from taxes?
There are situations in which you aren’t required to collect sales tax in Maine. For example, a guest who rents for 28 days or more who doesn’t have another primary residence, or who is living away from their primary residence in connection with school or work, is exempt from lodging taxes. In Maine, purchases of accommodations by federal, state, or local government agencies, exempt organizations, or students for school attendance may be exempt from state sales taxes.
Filing short-term rental tax returns
After you’ve collected taxes from your guests, it’s time to file your tax returns with Maine Revenue Services. In Maine, you can file returns and pay the tax amount due online. Maine Revenue Services allows credit card payments, but you may be charged convenience fees for this type of payment.
When do I need to file my returns?
You’ll be assigned a filing frequency and due dates when you register with the tax authority. For filing with Maine Revenue Services, due dates are as follows:
| Filing frequency | Due date |
|---|---|
| Monthly | Due the 15th day of the month following the end of the filing period |
| Quarterly | Due the 15th day of the month following the end of the filing period |
| Semiannually | Due the 15th day of the month following the end of the filing period |
| Annually | Due the 15th day of the month following the end of the filing period |
I didn’t rent my property during this filing period. Am I still required to file a lodging tax return with Maine Revenue Services?
Yes. STR operators registered with Maine Revenue Services are required to file returns each assigned filing period, regardless of whether you had any STR income or collected sales tax. Such returns are commonly known as “zero dollar returns.”
Are there penalties for filing taxes late?
Whether you choose to offer STRs through a marketplace like Airbnb or Vrbo, or directly to guests, you open the door to tax liability at the state and local level. As tax revenue is a major source of local funding, tax authorities are becoming more aggressive in their efforts to identify individuals and businesses not in compliance with tax laws. Failure to register with tax authorities and file STR tax returns in Maine on time may result in late fees, interest payments, and in extreme cases, legal action.
I’ve been offering short-term rentals without collecting lodging tax. What options do I have?
If you’re already operating an STR but not collecting lodging taxes, you may be in violation of Maine tax laws. Take the time to review your legal responsibility (with a tax professional, if necessary) and understand the risk of continuing to not collect tax.
STR hosts in Maine may be able to take advantage of a voluntary disclosure agreement (VDA). A VDA offers an opportunity for hosts to proactively disclose prior period tax liabilities in accordance with a binding agreement with Maine Revenue Services. VDAs are offered to encourage cooperation with state tax laws and may result in some or all penalty and interest payments being waived.
Are there options for outsourcing lodging tax filing?
Yes. Many STR operators in Maine file several state and local lodging tax returns every year. Filing solutions such as Avalara MyLodgeTax can relieve this burden.
