Maine Vehicle Sales Tax & Fees [+Calculator]
When it comes to purchasing a vehicle, you have to consider all the costs. That includes the state sales tax that is required in your state. In some cases, the state sales tax can add up to thousands of dollars to the final cost of the vehicle.
In this article, we will look at the state sales tax and other associated fees that come with registering your vehicle in the state of Maine.
Table of Contents
- How Much Is the Car Sales Tax in Maine?
- How to Calculate Maine Sales Tax on a Car
- Maine Sales Tax Calculator
- Do I Have to Pay Sales Tax on a Used Car?
- Which City Has the Highest Tax? Which City Has the Lowest Tax?
- Car Sales Tax for Trade-Ins in Maine
- Car Sales Tax for Private Sales in Maine
- Tax on Rebates & Dealer Incentives
- Other Taxes & Fees for Maine
- When Sales Tax is Exempt in Maine
- Maine EV Rebates & Incentives
- Best Car Deals by Category
- Frequently Asked Questions
How Much Is the Car Sales Tax in Maine?
The car sales tax in Maine is 5.50% of the purchase price of the vehicle. This state sales tax also applies if you purchase the vehicle out of state.
In short, if the vehicle is registered in the state of Maine, then the Maine car sales tax of 5.50% will be applied.
For example, if you purchase a new vehicle in Maine for $40,000, then you will have to pay 5.50% of the purchase price as the state sales tax or $2,200.
How to Calculate Maine Sales Tax on a Car
There are a number of ways that you can calculate the Maine sales tax on a car. Here’s a look at the two top approaches:
Vehicle Purchase Without a Trade-in: If you purchase a vehicle without a trade-in, you take the negotiated price, before incentives and discounts, and multiply that number by 5.50% to get the state sales tax fee.
- As an example, let’s say that you purchase a new vehicle for $50,000. You take the 5.50% sales tax rate and multiply it by the vehicle purchase price of $50,000. This gives you $2,750. That is the sales tax on the vehicle.
Vehicle Purchase With a Trade-in: If you are trading in a vehicle, you will take the negotiated price of the vehicle before incentives and discounts and then subtract the trade-in value. Then take that final number and multiply it by 5.50%.
- For instance, let’s say that you are purchasing a new vehicle for $50,000. You have a trade-in vehicle that is valued at $10,000. You subtract the trade-in value of $10,000 from the vehicle purchase price of $50,000 and get $40,000. You then multiply $40,000 by the state sales tax of 5.50% and get $2,200.
Maine Sales Tax Calculator
Do I Have to Pay Sales Tax on a Used Car?
Yes, the state sales tax in Maine applies to both new and used vehicles.
Which City Has the Highest Tax? Which City Has the Lowest Tax?
All counties and cities in Maine have a flat 5.50% sales tax rate
Car Sales Tax for Trade-Ins in Maine
You only pay the tax on the difference between the value of the trade-in and the sale of the vehicle you are purchasing.
For instance, if you are purchasing a used vehicle for $20,000 and the trade-in value of your vehicle is $5,000, you will pay 5.50% sales tax on the $15,000 difference.
Car Sales Tax for Private Sales in Maine
The 5.50% sales tax rate applies to private sales in Maine.
Tax on Rebates & Dealer Incentives
In the state of Maine, all rebates and dealer incentives are taxed at the 5.50% rate.
Other Taxes & Fees for Maine
Besides the state sales tax on the vehicle's purchase price, there are other fees that will apply. The major fees that you will have to consider are the DMV fees and the dealership fees.
The DMV/state fees can include title, registration, smog transfer, zero-emissions parking, and more. The median doc fee in Maine is $499.
The dealership fees will include documentation fees. This is the fee that the dealership applies to handle the paperwork needed to complete the sale of the vehicle.
In most cases, the cost of these fees can not be negotiated down. However, there are some dealership fees that you may be able to negotiate away. For instance, you may be able to eliminate the advertising fee, which is simply the cost to market the vehicle.
When Sales Tax is Exempt in Maine
In the state of Maine, you can be exempted from sales tax if you transfer the vehicle to a corporation, trust, partnership, or limited liability partnership if the seller owns 50% or more of the common stock.
Also, sales tax is exempt to those who are not a resident of Maine. For instance, if someone from Massachusetts purchases a vehicle in Maine and intends to register the vehicle in Massachusetts, then that person will not be subject to the Maine sales tax.
Finally, the sale tax is exempt for Maine businesses who purchase the vehicle and intend to use the vehicle outside of the state.
Maine EV Rebates & Incentives
Maine provides rebates for purchases of electric vehicles (EVs). For individuals, businesses, and organizations, the rebate is $2,000 for an all-electric vehicle and $1,000 for a hybrid. In addition, qualified low-income residents can get rebates of $5,500 for a new all-electric vehicle, $4,000 for a new hybrid vehicle, $2,500 for a used all-electric vehicle, and $2,500 for a used hybrid vehicle. Eligible used vehicles must be 2015 and newer and can not be a private sale.
For example, let’s say you are purchasing a new Tesla Model 3 for $60,000. You are not in the moderate-income bracket, therefore, your EV rebate is $2,000. You subtract the $2,000 rebate from the $60,000 and get the vehicle for $58,000.
Maine governmental and tribal entities can also get EV rebates. New all-electric vehicles can receive a $7,500 rebate, while new hybrid vehicles can get a $2,000 rebate.
Select Maine non-profit organizations can get EV rebates of $7,500 for new all-electric vehicles and $2,500 for new hybrid vehicles.
Finally, Maine businesses can get an EV rebate of $4,500 for each new all-electric vehicle and $3,500 for each hybrid vehicle. This rebate is good for businesses with a fleet of 2 to 10 vehicles.
Tax information and rates are subject to change, please be sure to verify with your local DMV.
Frequently Asked Questions
What is the sales tax on cars purchased in Maine?
In Maine, new and used vehicle purchases are subject to a flat 5.50% state sales tax in all counties. This state sales tax applies to both dealer and private sales.
Do I have to pay sales tax on a used car in Maine?
Yes. The state sales tax also applies to used car sales in the state of Maine.
Which city in Maine has the lowest tax? Which has the highest?
In the state of Maine, there is a flat 5.50% state sales tax.
Do I have to pay sales tax on a gifted car in Maine?
Yes. Gifted vehicles are subject to Maine’s 5.50% state sales tax. The state will use the fair market value of the vehicle to calculate the tax.
How much is registration in Maine?
Vehicle registration is $35 for most vehicles. However, if you have a vanity plate or a special plate, the vehicle registration can range from $15 to $25.
Does a trade-in reduce sales tax in Maine?
Yes. If you have a trade-in, then the trade-in value will be subtracted from the vehicle's purchase price. So, for instance, if you have a trade-in valued at $5,000 with a vehicle sale that’s $20,000, then the taxable purchase price of the vehicle will be $15,000.
How can I avoid paying sales tax in Maine?
You can avoid paying sales tax for vehicle sales in Maine by transferring the vehicle to a business where you control more than 50% of the outstanding shares. You can also avoid paying state sales tax if you purchase the vehicle for your business and the vehicle is primarily going to be used outside of the state of Maine.