What's Changed?
Marketplace facilitators are required to register with Maine Revenue Services (MRS) and to collect and remit Maine sales and use tax on all sales facilitated through their marketplace, effective October 1, 2019. A marketplace facilitator is considered a retailer for each sale of tangible personal property or taxable service for delivery into this State that the marketplace facilitator facilitates on or through its marketplace, including those they facilitate for sellers not required to register for Maine sales and use tax.
Beginning October 25, 2023, marketplace facilitators are required to collect the recycling assistance fee imposed on sales of new tires and lead-acid batteries facilitated on behalf of marketplace sellers. Marketplace facilitators were already required to collect the recycling assistance fee on any direct sales of new tires and lead-acid batteries.
Definitions
- What is a "marketplace"?
- Who is a "marketplace facilitator"?
- Who is a "marketplace seller"?
- Who is a "remote seller"?
- How is a remote seller different from an in-state seller?
- What are "Maine sales"?
Determining Maine Sales Tax Registration Requirements
- Is a remote seller required to register for sales tax in Maine?
- Is a marketplace facilitator required to register for sales tax in Maine?
- Are marketplace sellers required to register for sales tax in Maine?
- When a marketplace facilitator collects tax on a Maine sale on behalf of a marketplace seller, does that sale count towards the marketplace seller's threshold?
- How do I register as a retailer in Maine?
- Is there a fee to register for Maine sales and use tax?
- Can I register through the Streamline Sales Tax Registration System?
- How soon do I have to register for Maine sales and use Tax?
- How can I cancel my Maine Sales Tax Registration?
Filing Returns; Other Responsibilities
- How does a marketplace facilitator report the sales tax?
- How does a marketplace facilitator report sales made through its marketplace for marketplace sellers?
- How does a marketplace seller report sales facilitated by a marketplace facilitator?
- How do I file returns and make payments?
- How often are sales tax returns required to be filed?
- If all of my sales are exempt, am I still required to file returns, reporting zero tax due?
Other Marketplace Questions
- What information must a marketplace facilitator communicate to a marketplace seller?
- Are marketplace sellers responsible for the tax on their Maine sales when those sales are facilitated by a marketplace facilitator?
- Are marketplace sellers and marketplace facilitators subject to sales and use tax audits by Maine Revenue Services?
- What resources are available for information regarding Maine sales and use tax?
Definitions
A "marketplace" is a physical or electronic location, including stores, booths, internet websites, catalogs, or dedicated software applications, where tangible personal property or taxable services are offered for sale.
Who is a "marketplace facilitator"?
A "marketplace facilitator" is a business or person who facilitates retail sales by providing or operating a marketplace. A marketplace facilitator lists, advertises, stores, or processes orders for tangible personal property or taxable services for sale by marketplace sellers and engages in one or more of the following activities:
- Transmits or otherwise communicates an offer by the marketplace seller to potential buyers, or transmits or otherwise communicates an acceptance between the customer and the marketplace seller;
- Collects payment from the customer and transmits that payment to the marketplace seller; or
- Fulfilment or storage services, customer service, or assisting or accepting returns or exchanges with respect to the marketplace seller's tangible personal property or taxable services.
Who is a "marketplace seller"?
A "marketplace seller" is any person or business that sells tangible personal property or taxable services through a marketplace operated by a marketplace facilitator.
A "remote seller" is a seller without substantial physical presence in Maine who sells tangible personal property or taxable services into Maine. Remote sellers may also be marketplace sellers.
How is a remote seller different from an in-state seller?
Unlike remote sellers, in-state sellers have a physical presence in Maine, such as in-state stores, employees, inventory, or representatives.
"Maine sales" include all of a seller's sales of tangible personal property or taxable services delivered in or into the State, including sales exempt of tax. In the case of a marketplace facilitator, "Maine sales" includes the sales by marketplace sellers that are facilitated by the marketplace facilitator and delivered into Maine and the sales made for delivery into Maine directly by the marketplace facilitator.
Determining Maine Sales Tax Registration Requirements
Is a remote seller required to register for sales tax in Maine?
Remote sellers have been required to register for Maine sales and use tax since July 1, 2018, provided the remote seller gross sales from delivery of tangible personal property or taxable services into Maine in the previous or current calendar year exceeds $100,000.
Is a marketplace facilitator required to register for sales tax in Maine?
All marketplace facilitators with a substantial physical presence in Maine are required to register for and collect Maine sales and use tax.
A marketplace facilitator without substantial physical presence in Maine is required to register to collect and remit Maine sales and use tax if the marketplace facilitator's gross sales from the delivery of tangible personal property or taxable services into Maine in the previous calendar year or current calendar year exceeds $100,000.
For the purposes of determining whether a marketplace facilitator exceeds this threshold, the marketplace facilitator's gross sales include sales facilitated on behalf of marketplace sellers and any direct sales made by the marketplace facilitator.
Are marketplace sellers required to register for sales tax in Maine?
A marketplace seller with a physical presence in the State of Maine is required to register for Maine sales and use tax regardless of their volume of sales.
A marketplace seller with no physical presence in Maine who only sells tangible personal property or taxable services through a marketplace is not required to register for the collection of Maine sales and use tax if the marketplace facilitator has provided a written statement to the marketplace seller that the marketplace facilitator is responsible for collecting the tax.
A marketplace seller that has no physical presence in the State of Maine but makes sales into Maine both directly and through a marketplace is required to register as a remote seller if the marketplace seller's direct sales into the State of Maine exceed $100,000 in the previous or current calendar year. Once registered, the marketplace seller must collect and remit sales tax on all Maine sales of tangible personal property or taxable services made directly by the seller. (i.e., not sold through a marketplace).
When a marketplace facilitator collects tax on a Maine sale on behalf of a marketplace seller, does that sale count towards the marketplace seller's threshold?
No. Only the Maine sales made directly by a marketplace seller are counted towards the $100,000 thresholds for such a marketplace seller.
How do I register as a retailer in Maine?
Registration may be done electronically on Maine Tax Portal at: www.revenue.maine.gov
If the applicant is a marketplace facilitator:
- The applicant must check the "marketplace facilitator" box.
- If the marketplace facilitator makes no sales of its own and only facilitates sales for marketplace sellers, then the marketplace facilitator would need one tax registration number.
- If the marketplace facilitator makes direct sales as well as facilitates sales on behalf of marketplace sellers, the marketplace facilitator is advised to obtain separate sales tax account numbers for reporting their direct and facilitated sales. If both types of sales are done by the same entity, the two accounts may be reported under a single consolidated return.
If the applicant is a marketplace seller or remote seller, the applicant would require one sales tax registration number.
Is there a fee to register for Maine sales and use tax?
No.
Can I register through the Streamline Sales Tax Registration System?
No.
How soon do I have to register for Maine sales and use Tax?
Once a marketplace facilitator or a remote seller determines that they have exceeded the $100,000 gross sales threshold, they are required to register with Maine Revenue Services and begin collecting and remitting the sales tax on their sales on or before the first day of the first month that begins at least thirty days after the seller has exceeded the threshold.
Example: ABC Marketplace's gross sales - including facilitated sales - in Maine in the current calendar year exceeds $100,000 on May 15. ABC Marketplace must register with MRS and begin collecting the sales tax on Maine sales on or before July 1.
How can I cancel my Maine sales tax registration?
A marketplace facilitator or remote seller may cancel their registration with Maine when their gross sales do not exceed the $100,000 threshold for two consecutive calendar years following their registration.
Example: ABC Corporation registered with Maine on July 1, 2021, after exceeding the $100,000 gross sales threshold. During calendar year 2022, ABC Corporation's sales did not exceed $100,000, but ABC Corporation is required to remain registered because they did exceed the $100,000 threshold in the previous calendar year. ABC Corporation does not exceed the $100,000 threshold in calendar year 2023. Therefore, ABC Corporation may cancel their sales tax registration with an end date of December 31, 2023, as they had not exceeded the $100,000 in either the previous or current calendar year.
ABC Corporation would need to newly register should the company exceed the $100,000 gross sales threshold in a future calendar year.
Filing Returns; Other Responsibilities
How does a marketplace facilitator report the sales tax?
A marketplace facilitator is considered a retailer for each sale of tangible personal property or taxable services for delivery in Maine that the marketplace facilitator facilitates on or through its marketplace.
The marketplace facilitator is responsible for collecting and remitting sales tax in the same manner as any other retailer in this State, as well as all obligations imposed by the Maine sales and use tax laws, including timely filing and payment of tax returns, record keeping requirements, etc.
A marketplace facilitator must provide a written statement to a marketplace seller, attesting that the marketplace facilitator will collect and remit sales tax on all taxable sales facilitated on behalf of that marketplace seller.
Effective October 25, 2023, marketplace facilitators are required to collect the recycling assistance fee imposed on Maine sales of new tires and new lead-acid batteries facilitated on behalf of marketplace sellers. Marketplace facilitators were already required to collect the recycling assistance fee on any direct sales of new tires and new lead-acid batteries.
How does a marketplace facilitator report sales made through its marketplace for marketplace sellers?
If the marketplace facilitator only facilitates sales on behalf of marketplace sellers, the sales of all of its marketplace sellers should be reported under one single tax registration number.
If the marketplace facilitator also makes direct sales of tangible personal property or tangible services for delivery into Maine, the marketplace facilitator should have a separate sales tax branch location on which to report facilitated sales. If both types of sales are done by the same entity and have the same FEIN or SSN, the two locations may be reported under a consolidated return.
How does a marketplace seller report sales facilitated by a marketplace facilitator?
A marketplace seller that is registered for the collection of Maine sales tax would include sales facilitated through a marketplace facilitator in its gross sales with any direct sales made into Maine. Sales facilitated by a marketplace facilitator that has provided written statement to the marketplace seller that explicitly states the marketplace facilitator is collecting and remitting the sales tax on all taxable sales facilitated for the marketplace seller will be included in the marketplace seller's exempt sales.
If a marketplace seller does not have such a written statement and is registered to collect the Maine sales tax, the marketplace seller is required to collect the tax on all sales facilitated through the marketplace.
How do I file returns and make payments?
Sales and use tax returns can be filed through the Maine Tax Portal: www.revenue.maine.gov
How often are sales tax returns required to be filed?
Generally, every retailer with an average tax liability of $600 or more each month must file a monthly tax return. Rule 304, "Sales Tax Returns and Payments", establishes the filing frequencies for all sales and use tax return filers. MRS rules may be viewed on the Rules page.
If all of my sales are exempt, am I still required to file returns, reporting zero tax due?
Yes.
Other Marketplace Questions
What information must a marketplace facilitator communicate to a marketplace seller?
A marketplace facilitator shall provide to marketplace sellers a written statement in which the marketplace facilitator explicitly provides that the marketplace facilitator will collect and remit sales tax on all taxable sales facilitated for the marketplace seller.
Are marketplace sellers responsible for the tax on their Maine sales when those sales are facilitated by a marketplace facilitator?
No. If the marketplace seller is registered with the State of Maine for their direct sales, and the marketplace seller has received a written statement from a marketplace facilitator in which the marketplace facilitator states the facilitator is responsible for collecting the sales tax on any sales they facilitate for the marketplace seller, the marketplace seller may include the facilitated sales in their exempt sales for the reporting period.
Are marketplace sellers and marketplace facilitators subject to sales and use tax audits by Maine Revenue Services?
Yes, marketplace sellers and marketplace facilitators are subject to audits like any other business in Maine.
What resources are available for information regarding Maine sales and use tax?
Further information is available on the Sales, Use and Service Provider Tax page.