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Maine Clarifies Sale Price For Sales Tax Purposes

  • Jan 19, 2012 | Susan McLain

Maine Revenue Services has updated their Sales, Fuel & Special Tax Division Instructional Bulletin No. 39 “Sale Price Upon Which Tax Is Based.” Clarification is given regarding what constitutes sale price and how to apply sales price/sales tax in a number of circumstances.

Basic guidance states that “The sale price on which sales tax is based includes:

  1. Full price…including the value of traded in property.
  2. The amount charged for any services that are a part of the sale…. Separately stated charges for labor or services used in installing, applying or repairing the property sold are not subject to tax. [See details in bulletin to understand how to apply sales tax on these services.]
  3. Federal…excise taxes with respect to automobiles, tires, fire arms, tobacco, liquor, sporting goods, etc., even though this federal tax is separately stated.”

A few critical points to note include how to handle service charges—it matters how you invoice for those services. Labor or services “…used in installing or applying or repairing the property sold, if separately charged or stated” do not have sales tax applied. “In other words, the sales tax normally applies to the full charge for the goods sold, including any charges for services that are a part of the sale, except for separately stated charges for installing, applying or repairing the property sold.” However, there are exceptions to this [page 6 of bulletin].

Delivery charges, transportation charges, warranties, maintenance and service contracts and tips are all covered in the bulletin as well. In addition, coupons, rebates and gift certificates are clearly described, as well as retailer allowances and discounts. Read more here…

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”