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Maine: Sales Tax and Exemptions for Fuel, Utilities


Maine has released an updated information bulletin on the sales and use taxation of fuel and utilities, such as coal, oil, wood, electricity, gas and water. The document delineates exemptions, as well. Good to know, since winter is on the way, and winter is notoriously long and chilly in Maine.

The information outlined below is taken from the Maine Revenue Services Instructional Bulletin No. 13. Please refer to the bulletin itself for more complete information regarding Maine sales tax on fuel, and exemptions.

Electricity

The first 750 kilowatt-hours (KWH) per month of residential electricity are exempt. Included in this exemption are transportation and delivery charges for the fuel. The residential exemption does not apply to:

  • Hotels, tourist and trailer camps, and overnight cabins
  • The commercial aspect of a Bed and Breakfast
  • Nursing homes
  • Mobile home parks
  • Outside area lighting when separately metered
  • A home under construction that has not yet been used for human habitation and sleeping
  • All commercial users

"If two or more apartment units are billed on the same meter and the electric utility applies its tariff on a per-unit basis, each unit is allowed" the exemption. However, if "the electric utility does not apply its tariff on a per-unit basis, only one 750KWH allowance applies for all the units collectively."

Thermal Storage Devices

As of May 21, 2012, Maine offers a sales tax exemption "for off-peak residential electricity  used for space heating or water heating by means of an electric thermal storage device." This is in addition to the above mentioned "first 750 KWH per month" exemption.

Exemption for Certain Commercial Activities

"Electricity used by commercial farmers, commercial fisherman and commercial aquacultural businesses in their respective commercial activities or support operations may be purchased exempt from sales tax." Please see Instructional Bulletin No 13. for a list acceptable support operations.

Gas

In Maine, there is no sales tax on gas purchased for "heating or cooking in buildings designed and used for both human habitation and sleeping."

However, sales to hotels, tourist and trailer camps, overnight cabins, motor homes and travel trailers, nursing homes, and most commercial users are not exempt. The commercial aspect of Bed and Breakfasts are not exempt. Sales to a contractor for use in a home under construction are not exempt, nor are sales of gas for heating residential pools or garages.

Coal, Oil, Wood & Other Fuels (Except Gas and Electricity) 

"Sales of coal, oil, wood and all fuels, other than gas and electricity, are exempt when purchased for cooking and heating in buildings designed and used for human habitation." Unlike the case for electricity and gas, this exemption also applies to "mobile homes, apartment houses, boarding homes, nursing homes, overnight cabins, and hotels", as well as both commercial and residential aspects of Bed and Breakfasts. Please see Instructional Bulletin No. 13 for specifics.

Water

"Sales of water (including bottled water) are exempt when purchased for use in buildings designed and used for human habitation and sleeping, with the exception of hotels." The exemption includes deliveries, water for trailer parks and seasonal dwellings, and water for nursing homes, mobile homes, apartments, and boarding homes.

However, "sales of water (including bottled water) are taxable when sold to hotels, tourist and trailer camps, overnight cabins, or to any commercial user" other than those listed above.

Furthermore, "bottled water sold from retail locations" are subject to sales tax in the state of Maine.

Instructional Bulletin No. 13, updated on September 1, 2012, goes on to list partial exemptions and other exempt sales of water, gas, coal, oil, wood, other fuels, and electricity.

It is worth noting that all such bulletins "do not have the same legal force and effect as rules… ." The bulletin states that taxpayers "are responsible for complying with all applicable tax statutes and rules" under Maine law.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.