How to Calculate the Taxable Sale Price in Maine

Maine Revenue Services has released an information bulletin entitled, “Sale Price Upon Which Tax is Based.” It should remove any confusion regarding how to calculate the taxable amount of a sales transaction in Maine.

Sales (and use) tax is based on the sale price. Under Maine law, sale price includes:

• “The full price, valued in money, whether paid in money or otherwise, including the value of traded in property;”
• “The amount charged for any services that are a part of the sale” (assembly, alteration, etc) whether separately stated or not. However, “separately stated charges for labor or services used in installing, applying or repairing the property sold are not subject to tax;” and
• “Federal manufacturers’ or importers’ excise taxes with respect to automobiles, tires, firearms, tobacco, sporting goods, etc., even though this federal tax is separately stated.”

Under Maine law, taxable sale priced does not include:

• "Cash discounts allowed by seller;
• Separately stated charges for labor or services involving installing, applying or repairing the property sold;
• Separately stated charges for transportation of goods to the purchaser by common or contract carrier or by mail;
• Certain service charges in lieu of tips;
• The Recycling Assistance Fee;
• The premium on motor vehicle oil;
• The lead-acid battery deposit;
• The ‘lemon law’ arbitration program and consumer mediation service fees; and
• Any amount charged for the disposal of used tires."

The bulletin delves into additional detail regarding sales tax and trade-ins, installment and layaway sales, and how to account for sales tax on receipts. Retailers in Maine would do well to read it thoroughly.

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