Nexus Criteria for Maine
Under current law, Maine does not have a factor presence nexus standard for corporate income tax purposes. Effective July 01, 2018, a corporation will have nexus for corporate income tax purposes in Maine if it meets either of these criteria:
- Is organized or commercially domiciled in Maine.
- Economic nexus is a connection between a state and business when annual sales revenue and/or transaction quantity reach a threshold set by the state requiring you to register for sales tax. Maine enacted legislation on June 11, 2021, to remove the 200 transaction count threshold from the state’s economic nexus rules for remote sellers effective January 1, 2022.
Details of Maine’s Economic Nexus
Key details of the Maine economic nexus:
- Enforcement date: July 1, 2018.
- Sales/transactions threshold: $100,000.
Legislation Impact
The sales and use tax in Maine is a tax on the sale or use of tangible personal property and certain services. If your business is a limited liability company, partnership, or nonprofit corporation, you need to file for licenses and permits from the city or county.
Effective October 1, 2017, Maine’s legislature has enacted legislation requiring remote sellers to collect and remit sales tax on sales of tangible personal property, products transferred electronically or services that are delivered into Maine, if:
- The seller’s gross revenue from such sales into Maine in the previous calendar year or current calendar year exceeds $100,000.
The state may bring a declaratory judgment action against remote sellers to establish the federal and state legal validity of the tax collection obligation. For the purpose of economic nexus assessment in Maine, included transactions encompass taxable delivered services, exempt sales, and gross sales of tangible personal property.
Retailer’s Obligations
Generally speaking, your company needs to remit sales tax to a state (usually its Department of Revenue) when you have a presence, or nexus, with that state. Economic Nexus legislation generally requires an out-of-state retailer to collect and remit sales tax once the retailer meets a set level of sales transactions or gross receipts activity (a threshold) within the state. No physical presence is required.
State Provisions
States with economic nexus sales tax nexus provisions include Alabama, Connecticut, Georgia, Hawaii, Illinois, Indiana, Kentucky, Louisiana, Maine, Minnesota, Mississippi, North Dakota, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Vermont, Washington, and Wyoming.
Confirming Nexus and Next Steps
Here’s a quick rundown of what to do when you confirm you have nexus in a state:
- Check out "The Ultimate Guide to US Economic Nexus" for more information.
- Determine whether you exceed the economic nexus threshold in the state.
- Register for sales tax with the state revenue department if necessary.
- Begin collecting and remitting sales tax for sales in that state.