How Much are Used Car Sales Taxes in Maine?

While buying a used car in Maine is a great way to save some money, there's one thing you can't overlook—sales tax.

Quick links:

How much tax will I pay?

Sales tax vs use tax

How does Maine calculate taxes?

How do I pay the Maine car sales tax?

Can I avoid paying sales tax in Maine?

Is it better to go to a dealer?

Maine's vehicle sales tax is 5.5% of the vehicle's purchase price. Unlike many other states, Maine has no local sales tax on vehicle purchases. This makes Maine one of the easier states in which to manage sales tax collection, filing, and remittance.

Keep reading to get the full scoop on Maine sales tax liabilities for your used car purchase.

When buying a car in Maine, you’ll pay 5.5% of the vehicle’s purchase price, whether you buy from a private seller or a car dealer. Maine tax law does not discriminate between the two. Unless you qualify for a tax exemption (covered below), you’ll owe tax on your vehicle purchase.

Sales tax is a percentage of a car's purchase price, as we’ve already discussed. You owe it to the state of Maine when you buy a vehicle and register it in Maine.

Use taxes are pretty much the same thing, but for out-of-state vehicles. When you buy a vehicle out-of-state and register it in Maine, the state will levy a 5.5% use tax (the use tax rate is the same as the sales tax rate). The use tax essentially levels the playing field by ensuring that cars purchased in the state and cars brought into the state are taxed the same.

If you paid sales tax on your vehicle purchase in another state, Maine will usually deduct the other state’s tax so that you aren’t double-taxed. There are four potential scenarios.

1. You paid exactly 5.5% sales tax in Nebraska (the only other state with the same tax rate as Maine), in which case Maine will give you a pass.
2. You paid no sales tax in another state, in which case you owe the full 5.5% Maine sales tax. Let's say you bought a used car in Alaska and didn’t pay any sales tax, given Alaska's 0% tax rate. You’ll pay Maine’s full 5.5% sales tax.
3. You paid less than 5.5% sales tax in another state, in which case Maine charges you the difference. Let’s say you bought a used Jeep Wrangler in North Dakota for $20,000. North Dakota’s tax rate is 4%, so you paid $800 (.04 X $20,000) in North Dakota tax. When you go to register the car in Maine, your total tax bill will be $1,100 minus the $800 you already paid in North Dakota, for a total due of $300 to Maine.
4. You paid more than 5.5% in the other state (for example, Rhode Island levies a 7% tax on vehicle purchases). We wish we could tell you Maine will give you a refund, but no. At least they won’t charge you any more tax.

To report sales and use tax, fill out the use tax certificate (Form STMV-6U).

In addition to the state sales tax, you may owe other fees when buying a car and registering it in Maine, such as vehicle registration fees and car title fees.

To register your vehicle at the Bureau of Motor Vehicles (BMV) branch office, you must show proof of car insurance. The first time you register a passenger vehicle, it will cost you $35, plus the $33 title transfer fee.

Maine's standard license plate fee is included in the registration fee. A vanity plate will cost an additional $25.

Sales tax in Maine is calculated based on the vehicle's purchase price. There are people who think they can outsmart the government by negotiating a low "official" purchase price and paying the rest in a side transaction. But Maine Revenue Services can’t be fooled so easily.

If Revenue Services suspects that the purchase price of the vehicle was artificially decreased, they will calculate sales tax based on the car’s fair market value.

Revenue Services establishes what the car is worth on the open market by referring to Kelley Blue Book or other reliable sources on used car prices. If they conclude that the car's fair market value is greater than its purchase price, they can opt to base sales tax on the fair market value.

It is important to note that underreporting the purchase price of a vehicle in order to avoid paying sales tax is illegal. If you are caught doing this, you could be subject to a fine of up to $5,000.

Here's how to pay Maine car sales tax after buying a used car from a private seller:

1. To transfer ownership of the vehicle, you and the seller must complete the necessary paperwork, including the bill of sale (when you buy a used car on PrivateAuto, we provide an official Maine bill of sale and prompt both of you to sign it in our app at the appropriate stage of the transaction process). You'll need the following documents to transfer car ownership in a private transaction:
2. The original car title with an odometer reading and the seller’s signature
3. Current proof of insurance.
4. The buyer and the seller’s valid driver’s licenses or IDs
5. Calculate the amount of sales tax due. Multiply the vehicle's purchase price by 5.5%.
6. Fill out the sales tax form.
7. Submit payment for all taxes and fees.
8. Get payment proof from the Maine Revenue Services.
9. Get your registration, title and new license plates. Once you've paid the sales tax and turned in the necessary paperwork, you'll get your new registration and title for the car. The title and registration will show that you bought the car and that the sales tax has been paid. You will also get your license plates in mail.

If you buy a used car from a private seller,it is recommended that both you and the seller go to a BMV branch office to finish the transaction, which protects both of you. If you do not complete the transfer of title within 30 days of the sale, you will be charged a late transfer penalty fee of $10.

There’s really no way around it; taxes are part of life. You are required by law to pay sales tax on private used car purchases in Maine or any other state that charges sales tax—unless you meet an exemption.

Maine Car Sales Tax Exemptions

Here are some sales tax exemptions for used vehicle purchases in Maine:

• Non-residents. If you are not a Maine resident and purchase a vehicle in Maine, you are not required to pay sales tax in Maine. But you may need to pay them in the other state, depending on whether it levies sales tax on used vehicle purchases.
• Government agencies. Federal, state, and local governments are exempt from paying sales tax on used vehicles.
• Certain commercial vehicles. Farm trucks and commercial trailers are two examples of commercial vehicles that may be exempt from sales tax.
• Cars that are purchased for business use. If the vehicle is intended to be driven or transported outside of Maine immediately after delivery and will be used solely for the qualifying resident business's out-of-state activities.

Many people believe that buying from a car dealer is a magical way to avoid all of the hassle (and possibly a fee here and there). In fact, going to a Maine dealer will cost you more money, and it's not all that hassle free—unless spending 3 hours in a dealership is your idea of a good time.

• Dealerships charge documentation fees above and beyond all the other taxes and fees you have to pay (which are exactly the same whether you buy from a dealer or a private seller). Average documentation fees in Maine are $410.
• Dealers usually charge higher prices on used cars. Their business model is based on buying as low as possible and selling as high as possible to make the spread that keeps them in business. Cut out the middleman and go directly to private sellers to get the best deals.

We do admit that dealers bring a certain amount of convenience that you don’t traditionally get when you buy from a private seller. In fact, that’s why PrivateAuto exists. We give you dealer-like convenience in the palm of your hand while allowing you to transact peer-to-peer with regular folks like yourself—unlike our competitors.

When you shop for used cars from private sellers on PrivateAuto, you can avoid the doc fee and get lower prices.

If you're looking for a used car, you'll need to figure out how much sales tax you'll have to pay. While it is not necessary to be a rocket scientist to calculate taxes, it can be time-consuming to determine your sales tax amount.

Calculating sales tax has never been easier than with PrivateAuto's used car sales tax calculator. This free online calculator determines how much tax you must pay on a used car purchase based on your tax rate (5.5%) and the price of the vehicle.

PrivateAuto is the only transactional marketplace where you can easily and conveniently buy and sell used cars and get the deal done from start to finish.

Our innovative platform connects buyers and sellers and gives them all the tools to complete the deal, from in-app financing to secure messaging to integrated payments. You can also schedule a test drive and negotiate the price without ever disclosing your personal information.

Shop used cars for sale by owner today!

Here’s how you can sell your car in Maine with a few simple steps:

Gather necessary documentation

You’ll need your vehicle title and other documentation. Have all the paperwork you need to sell your car privately, so you’re not scrambling to find it at the moment of completing a sale.

Register on PrivateAuto and get verified

To make PrivateAuto a safe place for everyone, we require email, phone, and driver’s license verification, including facial recognition.

List your car

Easily create your PrivateAuto listing with our step-by-step guide. Bonus: we include a window brochure with a QR code scannable to your listing.

Set your terms

You can control where, when, and who you meet. Decide whether to accept only ID-verified buyers, or buyers with verified funds. Don’t waste your time with buyers who aren’t verified according to your preferences.

Vet incoming offers

Manage offers in one place with the ability to accept, reject, or counter offers within the app. Listing on multiple sites? Filter all communications through PrivateAuto by sharing your listing link on all platforms. Your personal information is protected: no more giving out your phone number or email address. All communication happens in our app.

Choose a buyer

When you find an offer you like, accept it and proceed to the next step with that buyer.

Schedule a meeting

The buyer will want to look at your car. No more back-and-forth texts. You never have to give out your phone number. Rather, use our handy scheduling feature to schedule test drives and coordinate a time and place for meetings. (Oh, and you’ll be able to finalize the transaction instantly at the first meeting, FYI.)

E-sign documents

After the buyer is satisfied with your car and the two of you have agreed on a purchase price, you can easily e-sign the bill of sale within our app, from your phone. With our shared documents feature, you can easily locate the paperwork needed after the sale.

Get paid, instantly

Before PrivateAuto, receiving funds was the most stressful part of the entire selling process, especially for any used car sale over $5,000. There just aren’t a lot of good ways to move large amounts of money quickly and conveniently. Those days are over! Verify and receive funds instantaneously with PrivateAuto Pay, our innovative banking integration. Guaranteed funds for transactions large and small.

Transfer title

When you sell your vehicle, fill out the necessary information on the back of the certificate of title and sign it in order to transfer ownership of the vehicle to the new owner.

How are car trade-ins taxed in Maine?

You may decide to trade in your old car to reduce the overall cost of your new vehicle. When you trade in a car, the dealership will assess its worth and offer you a credit. This credit will be deducted from the total price of your vehicle.

The sales tax in Maine is only applied to the net price of your new car after the trade-in credit is deducted. In other words, your trade-in’s value is not subject to taxes! This could save you a lot of money, depending on the value of your trade-in vehicle.

Which state has the cheapest car tax?

The states with the cheapest car tax are Alaska, Delaware, Montana, New Hampshire, and Oregon, with a tax rate of zero. Nevada has a zero tax rate on private-party car sales, though not on dealership purchases.

If you really want to avoid car sales tax, you might consider moving to one of these states.

With the exception of the above states, all US states charge sales tax on private-party car purchases. Oklahoma, North Carolina, Colorado, and Alabama charge 4.5% or less vehicle sales tax.

How do I calculate Maine sales tax?

Calculate Maine sales tax by multiplying your vehicle's purchase price by .055. Let's say you find a stunning Toyota 4Runner for $23,000. You’ll owe $1,265 in state sales tax ($23,000 multiplied by .055).

Does Maine have excise taxes?

The state of Maine has excise taxes. Excise taxes are levied on specific goods or services, such as gasoline, tobacco, and alcoholic beverages. Excise taxes in Maine are used to fund a variety of programs, such as education, transportation, and public safety.

The following are some of the excise taxes that are levied in Maine:

• Gasoline tax
• Diesel fuel tax
• Tobacco tax
• Alcohol tax

Excise taxes can vary from year to year. If you have any questions about excise taxes in Maine, you should consult with a tax advisor

How to transfer a vehicle title in Maine?

To complete a vehicle title transfer, you will need to provide the following documents to the Maine BMV office:

• A vehicle title application (form MVT-2)
• The bill of sale
• Proof of a release of lien (if applicable)
• An odometer disclosure statement
• Proof of insurance
• Payment for the title transfer fee: $33
• Payment for the Maine car sales tax of 5.5% of the vehicle purchase price

Bring the above-mentioned documents to your local BMV branch office or mail them to the BMV’s Title Unit at:

Title Examination and Information Unit

Bureau of Motor Vehicles

29 State House Station

Augusta, ME 04333

You also need to apply for new license plates and register the car with the Maine Bureau of Motor Vehicles.

For more info, read our complete guide to transferring a Maine vehicle title.

What is the penalty for sales tax in Maine?

According to Maine Revenue Services, “If you do not pay your sales tax on time, you will be charged a penalty of 1% of the sales tax due per month or fraction of a month, up to a maximum of 25%. You may also be charged interest on the amount due.”

Does Maine have property tax?

Property taxes are levied on real estate, such as land and buildings. Property taxes in Maine are used to fund a variety of programs, such as education, transportation, and public safety.

The amount of property tax you owe is determined by the assessed value of your home or other real estate. The local assessor determines the value of your property.

In Maine, your local municipality determines the property tax rate. The rate of property taxation varies by municipality. The average property tax rate in Maine is 1.09%.

Every year, you must pay property tax on your property. The property tax is due on July 1st, the first day of the fiscal year. Property taxes can be paid online, by mail, or in person.

Is Maine tax friendly to retirees?

Maine is not considered a tax-friendly state for retirees. While Social Security income is not taxed in Maine, other forms of retirement income are taxed at rates as high as 7.15%. It also has above-average property taxes.

Here is a breakdown of some of the taxes that retirees in Maine may have to pay:

• Income tax: Maine has a progressive income tax system with rates ranging from 5.8% to 7.15%. Retirees who receive retirement income from a 401(k), IRA or pension will pay tax rates as high as 7.15%, though a small deduction is available.
• Property tax: The average property tax rate in Maine is 1.09%. This means that a home valued at $200,000 would have a property tax bill of $2,180 per year.
• Sales tax: Maine has a statewide sales tax of 5.5%. In addition, many cities and towns also have their own sales taxes.

How long do you have to live in Maine to be a resident?

There are two ways to be considered a resident of Maine for tax purposes:

1. Resident: you’re a resident of Maine if you are “domiciled” there. You are domiciled in Maine if you intend to make Maine your permanent home. Where you live, where you vote, and where your kids go to school are determining factors in this. There is no time requirement; you can be considered a resident as soon as you set up your domicile.
2. Statutory resident: you are considered a “statutory resident” of Maine if you spend more than 183 days in the state in a calendar year, and you maintain a “permanent place of abode” in the state. Maine Revenue Services defines a “permanent place of abode” as “a house, apartment, residential care facility, dwelling place…that an individual maintains as a household for the entire tax year, whether or not that individual owns it.”

If you are domiciled in Maine, you will be considered a resident for tax purposes regardless of how many days you spend in the state. If you are not domiciled in Maine but spend more than 183 days in the state, you will be considered a statutory resident for tax purposes.

There are a few exceptions to the 183-day rule. For example, if you are a student or a member of the military, you may be able to exclude some or all of the days you spend in Maine from the 183-day calculation.

If you are unsure whether you are considered a resident of Maine for tax purposes, you should consult with a tax professional.

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