Maine outperforms many of its Northeastern peers but nevertheless performs below average on the Index, with the property tax and corporate income tax being its least competitive tax types.
Maine’s property tax structure is among the least competitive in the nation due to high rates, its levying of both an estate tax and a real estate transfer tax, and its taxation of tangible personal property without a de minimis exemption. However, Maine’s high property taxes come as a trade-off for its lack of local sales taxes, which enables the state to maintain one of the lowest combined sales tax rates in the nation.
Maine includes global intangible low-taxed income (GILTI) in its corporate tax base, which will transition to a tax on net CFC-tested income (NCTI) when the state updates its conformity statute. Maine’s throwback rule raises the tax burden Maine-based businesses face when they sell tangible property into states with which they do not have nexus. Additionally, Maine’s lack of first-year expensing for C corporations discourages in-state investment, although its conformity to the Section 179 expensing allowance makes its treatment of small business investments more competitive than some of its peers.
| Category | Rank | Rank Change | Score |
|---|---|---|---|
| Overall | 26 | 5 | 5.14 |
| Corporate Taxes | 40 | 0 | 4.71 |
| Individual Income Taxes | 23 | -2 | 5.50 |
| Sales Taxes | 9 | -1 | 5.77 |
| Property Taxes | 45 | 2 | 3.92 |
| Unemployment Insurance Taxes | 21 | -3 | 5.28 |
Get facts about taxes in your state and around the US
Privacy concerns are a primary driver of opposition to vehicle miles traveled (VMT) tax systems, but VMT taxes do not need to invade drivers’ privacy to efficiently fund the roads.
6 min read
As the market share of electric vehicles (EVs) on the road grows, the gas tax’s ability to fund road projects and decrease traffic congestion erodes. Both federal and state real tax revenue per vehicle mile traveled has been on a steady decline for decades, creating a fiscal gap for road expenditures even as the demand for road infrastructure improvements has grown.
6 min read
The highest state tax on cigarettes is levied by New York at $5.35 per pack of 20. The next highest tax jurisdiction is the District of Columbia at $5.07 per pack of cigarettes, followed closely by Maryland at $5.00 per pack, Rhode Island at $4.50 per pack, and Connecticut at $4.35 per pack.
6 min read