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SALES TAX ON LONG TERM RENTALS

State of Maine Sales Tax Bulletin #32 contains instructions regarding the taxation of "rentals of living quarters." The Maine Sales and Use Tax Law imposes a tax on the "rental of living quarters in any hotel, rooming house, tourist or trailer camp." There are a few limited exceptions:

  1. Casual Rentals: All rental of living quarters will be subject to Maine state sales tax of 8% effective July 1, 2005. This includes rentals of homes, vacation homes, cottages, condominiums and camps that are offered for rent to transient guests. Anyone so renting such living quarters must register with Maine Revenue Services to obtain a sales tax account; then charge, collect and remit this tax to the State. Previous to this change in law, these rentals were regarded as “casual rentals” and not subject to the Maine sales tax if the person only rented one property. Rental properties handled by rental agencies or real estate agencies have always been subject to the 8% tax.For details on the July 1, 2005, law change, specific exemptions, and how to register click here. For details on general rental of living quarters click here.

  2. Occupancy for 28 Days or More: Rental charged to any person who resides continuously for 28 days or more in the same hotel, rooming house, tourist camp is nontaxable if:
    • the living quarters are the person's primary residence, or;
    • the person is away from their primary residence for employment or educational purposes.

Continuous residence is not interrupted by changing rooms within the same hotel, rooming house, tourist camp or trailer camp.

Release Date: 1/28/2001 12:00:00 AM