Maine offers a vibrant environment for business, with over 160,000 small businesses employing about 54% of the state’s workforce. Whether you’re an established business owner or planning to start a new venture, understanding the tax landscape in Maine is crucial. This guide provides an overview of the various taxes small businesses in Maine must navigate, including tax rates, filing requirements, and deadlines.
Types of Business Taxes in Maine
Maine business owners may be subject to various taxes depending on their business structure, activities, and revenue. Here’s a breakdown of the main types of taxes:
Corporate Income Tax
Applicable Entities: All entities organized as corporations
Tax Rate: Varies based on adjusted federal taxable income
Filing Requirements: File Form 1120ME by the 15th day of the fourth month after the tax year ends.
Estimated Payments: Required unless liability for the current or prior tax year is less than $1,000. Payments are due quarterly on the 15th day of the fourth, sixth, ninth, and 12th months of the tax year.
Sales and Use Tax
Service Provider Tax
Withholding Tax
Applicable Entities: Employers with employees
Tax Rate: Varies
Filing Requirements: File Form 941ME and make payments semi-weekly or quarterly based on withholding amounts.
Unemployment Insurance Tax
Applicable Entities: Employers that pay workers $1,500 or more in gross wages in a calendar quarter or for work performed in employment in any part of the day in 20 weeks in the calendar year
Tax Rate: Varies based on the business’s experience rating
Filing Requirements: File quarterly reports (Schedule 2) and payments (Form ME-UC1) by April 30, July 31, October 31, and January 31.
Personal Property Tax
Applicable Entities: Businesses using personal property (exemptions or reimbursement available for most qualified business property)
Tax Rate: Based on property type and value
Filing Requirements: Report annually to the county assessor by April 1.
Pass-Through Entity Withholding Tax
How to File and Pay Maine Business Taxes
Business taxes in Maine can be filed and paid through various methods:
Online Filing and Payment: Use the Maine Tax Portal for electronic submissions and payments.
Mail: Send forms and payments to the address provided on the form.
Important Deadlines
Keep track of these key dates to avoid penalties:
Corporate Income Tax Returns: Due by the 15th day of the fourth month after the tax year ends.
Estimated Tax Payments: Due quarterly on the 15th day of the fourth, sixth, ninth, and 12th months of the tax year.
Sales and Use Tax Returns: Monthly, quarterly, semi-annually, or annually based on sales volume.
Withholding Tax Returns: Due semi-weekly or quarterly.
Unemployment Insurance Reports: Due quarterly by April 30, July 31, October 31, and January 31.
Tax Credits and Incentives
Maine offers several tax credits and incentives for small businesses, including:
Credit for Wellness Programs: Available to businesses that employ no more than 20 employees and develop, institute, or maintain an employee wellness program. The total credit (including the carryover of unused credit amounts from prior years) is limited to the lesser of $100 per employee or $2,000 total per employer, and can’t reduce tax liability to less than zero.
Employer Credit for Family and Medical Leave: Available to employers that qualify for the federal credit for paid family and medical leave. The credit equals the amount of the federal credit related to wages paid to qualifying employees based in Maine while on leave, is nonrefundable, and can’t be carried back or forward.
Maine Capital Investment Credit: Available to businesses that invest in certain depreciable property and claim federal bonus depreciation. The credit equals a percentage of the net increase in the depreciation attributable to the bonus depreciation deduction claimed for property placed in service in Maine and can be carried forward 20 years. (This credit has been repealed for 2025 except for carryforwards.)
Research Expense Tax Credit: Available to businesses that spend money on research in the state. The credit equals 1) 5% of qualified research expenses in excess of the base amount, plus 2) 7.5% of basic research payments. The credit can’t reduce tax liability below zero and, for corporations, is limited to 100% of the first $25,000 of income tax before the application of other credits, plus 75% of the excess tax. Unused credits can be carried forward for 15 years.
For more information, check out our article on business tax credits for Main businesses.
Maine’s business tax breakdown by business type
Business taxes can get complicated, so we’ve included a chart that breaks down which taxes different business structures usually pay.
Remember that pass-through entities don’t pay federal income taxes themselves—the obligation is passed on to their business owners or shareholders, who pay them through their personal income tax returns.
Business type | Personal income tax | Corporate income tax | Sales, use, and service provider taxes | Withholding tax | Unemployment tax | Federal income taxes |
C corporation | No | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes |
S corporation | Yes (pass-through) | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
LLC | Yes (pass-through) | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Partnership | Yes (pass-through) | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Sole proprietorship | Yes (pass-through) | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes, by way of individual income tax |
File your Maine small business taxes with Gusto
As a business owner, your time and energy are valuable, finite resources. So, instead of managing your taxes manually, let Gusto give you a hand. Our easy-to-use software automatically files all your payroll taxes each time you run payroll—freeing up your bandwidth for the work that matters most.
Learn how else Gusto can simplify the operations of your small business by creating an account today.
Maine Small Business Taxes: The Employer’s 2024 Guide
Maine offers a vibrant environment for business, with over 151,000 small businesses employing about 56% of the state’s workforce. Whether you’re an established business owner or planning to start a new venture, understanding the tax landscape in Maine is crucial. This guide provides an overview of the various taxes small businesses in Maine must navigate, including tax rates, filing requirements, and deadlines.
Types of Business Taxes in Maine
Maine business owners may be subject to various taxes depending on their business structure, activities, and revenue. Here’s a breakdown of the main types of taxes:
Corporate Income Tax
Applicable Entities: All entities organized as corporations
Tax Rate: Varies based on adjusted federal taxable income
Filing Requirements: File Form 1120ME by the 15th day of the fourth month after the tax year ends.
Estimated Payments: Required unless liability for the current or prior tax year is less than $1,000. Payments are due quarterly on the 15th day of the fourth, sixth, ninth, and 12th months of the tax year.
Sales and Use Tax
Service Provider Tax
Withholding Tax
Applicable Entities: Employers with employees
Tax Rate: Varies
Filing Requirements: File Form 941ME and make payments semi-weekly or quarterly based on withholding amounts.
Unemployment Insurance Tax
Applicable Entities: Employers that pay workers $1,500 or more in gross wages in a calendar quarter or for work performed in employment in any part of the day in 20 weeks in the calendar year
Tax Rate: Varies based on business’s experience rating
Filing Requirements: File quarterly reports (Schedule 2) and payments (Form ME-UC1) by April 30, July 31, October 31, and January 31.
Personal Property Tax
Applicable Entities: Businesses using personal property (exemptions or reimbursement available for most qualified business property)
Tax Rate: Based on property type and value
Filing Requirements: Report annually to the county assessor by April 1.
Pass-Through Entity Withholding Tax
How to File and Pay Maine Business Taxes
Business taxes in Maine can be filed and paid through various methods:
Online Filing and Payment: Use the Maine Tax Portal for electronic submissions and payments.
Mail: Send forms and payments to the address provided on the form.
Important Deadlines
Keep track of these key dates to avoid penalties:
Corporate Income Tax Returns: Due by the 15th day of the fourth month after the tax year ends.
Estimated Tax Payments: Due quarterly on the 15th day of the fourth, sixth, ninth, and 12th months of the tax year.
Sales and Use Tax Returns: Monthly, quarterly, semi-annually, or annually based on sales volume.
Withholding Tax Returns: Due semi-weekly or quarterly.
Unemployment Insurance Reports: Due quarterly by April 30, July 31, October 31, and January 31.
Tax Credits and Incentives
Maine offers several tax credits and incentives for small businesses, including:
Credit for Wellness Programs: Available to businesses that employ no more than 20 employees and develop, institute, or maintain an employee wellness program. The total credit (including the carryover of unused credit amounts from prior years) is limited to the lesser of $100 per employee or $2,000 total per employer, and can’t reduce tax liability to less than zero.
Employer Credit for Family and Medical Leave: Available to employers that qualify for the federal credit for paid family and medical leave. The credit equals the amount of the federal credit related to wages paid to qualifying employees based in Maine while on leave, is nonrefundable, and can’t be carried back or forward.
Maine Capital Investment Credit: Available to businesses that invest in certain depreciable property and claim federal bonus depreciation. The credit equals a percentage of the net increase in the depreciation attributable to the bonus depreciation deduction claimed for property placed in service in Maine and can be carried forward 20 years. (This credit has been repealed for 2025 except for carryforwards.)
Research Expense Tax Credit: Available to businesses that spend money for research in the state. The credit equals 1) 5% of qualified research expenses in excess of the base amount, plus 2) 7.5% of basic research payments. The credit can’t reduce tax liability below zero and, for corporations, is limited to 100% of the first $25,000 of income tax before the application of other credits, plus 75% of the excess tax. Unused credits can be carried forward for 15 years.
For more information, check out our article on business tax credits for Main businesses.
Maine’s business tax breakdown by business type
Business taxes can get complicated, so we’ve included a chart that breaks down which taxes different business structures usually pay.
Remember that pass-through entities don’t pay federal income taxes themselves—the obligation is passed on to their business owners or shareholders, who pay them through their personal income tax returns.
Business type | Personal income tax | Corporate income tax | Sales, use, and service provider taxes | Withholding tax | Unemployment tax | Federal income taxes |
C corporation | No | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes |
S corporation | Yes (pass-through) | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
LLC | Yes (pass-through) | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Partnership | Yes (pass-through) | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Sole proprietorship | Yes (pass-through) | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes, by way of individual income tax |
File your Maine small business taxes with Gusto
As a business owner, your time and energy are valuable, finite resources. So, instead of managing your taxes manually, let Gusto give you a hand. Our easy-to-use software automatically files all your payroll taxes each time you run payroll—freeing up your bandwidth for the work that matters most.
Learn how else Gusto can simplify the operations of your small business by creating an account today.
