Maine Business Law Changes 2025 and 2026: Service Provider Tax Repeal, 14% Cannabis Tax, PFML Benefits, the 2% Surcharge and What Is Still Pending
Maine Business Law Changes 2025 and 2026: Service Provider Tax Repeal, 14% Cannabis Tax, PFML Benefits, the 2% Surcharge and What Is Still Pending
Maine business law changes for 2026 arrived in stages. Payroll changes began in 2025, the sales tax and cannabis changes took effect on January 1, 2026, and several more rules are rolling out through the rest of this year and into 2027. If you run an LLC, a corporation, or a sole proprietorship in Maine, these changes affect your payroll, your sales tax filings, your pricing, and your personal tax planning if you own the business. This guide covers what changed, when it changed, and what you should confirm with the state before you rely on it.
This is informational content, not legal or tax advice. Maine tax and employment rules are complex and change often. Talk with a qualified attorney or CPA before making decisions based on the changes below, especially if you have multiple owners, employees in more than one state, or high personal income.
Maine Business Law Changes at a Glance
| Date | Change |
|---|---|
| January 1, 2025 | Paid family and medical leave (PFML) premiums begin |
| January 1, 2026 | Service Provider Tax repealed and taxable services folded into sales tax; adult-use cannabis tax set at 14%; minimum wage set at $15.10 an hour; 2% surcharge on very high incomes begins |
| May 1, 2026 | PFML benefits begin |
| July 29, 2026 | Non-emergency laws from the 2026 session take effect, including a new mailed-notice rule |
| August 1, 2026 | Data centers lose the Business Equipment Tax Exemption (BETE) |
| January 1, 2027 | Independent Office of Tax Appeals replaces the Board of Tax Appeals |
1. Payroll: PFML Premiums and Benefits
Maine's Paid Family and Medical Leave program has two phases that matter to employers. Premiums started January 1, 2025 under 26 MRSA 850-F. Premiums are remitted quarterly and are capped at up to 1.0% of wages, with the employer and employee shares combined. Employers with fewer than 15 employees remit only half of the premium. Benefits became payable on May 1, 2026.
In practice, confirm that your payroll provider is withholding and remitting PFML premiums every quarter, and that your payroll records show the correct share for each employee. If you have fewer than 15 employees, ask the Maine Department of Labor how your headcount is counted before you apply the half-rate, because the count determines which rate applies to you.
2. Sales Tax: Service Provider Tax Repealed
The Service Provider Tax no longer exists as of January 1, 2026. Under PL 2025 c. 388, the closed list of taxable services was folded into the state sales tax. If your business previously tracked or reported service provider tax, your collection and reporting now run through the sales tax.
The list of taxable services is still closed. Lawn care, towing, handyman work and junk removal are not on it, so this change does not make those services taxable. Before you add a sales tax charge to a service invoice, check the services you sell against the list on the Maine Revenue Services website.
The current Maine sales tax rates are:
- 5.5% general sales tax rate
- 8% on prepared food and on-premises liquor
- 9% on lodging
- 10% on short-term car rentals
If you do not yet have a seller's permit, apply through Maine Revenue Services at revenue.maine.gov. General information about the agency is at maine.gov/revenue.
3. Adult-Use Cannabis Tax Rises to 14%
The adult-use cannabis tax rate is 14% for sales beginning January 1, 2026. If you hold a cannabis license or sell cannabis products, update your pricing models, point-of-sale settings, and tax reserves to reflect this rate. Confirm the current filing and remittance steps with Maine Revenue Services, since the cannabis tax has its own compliance requirements that differ from the general sales tax.
4. Minimum Wage: $15.10 an Hour
Maine's minimum wage is $15.10 an hour as of January 1, 2026, according to the Maine Department of Labor. Audit your hourly pay rates against this figure, including entry-level positions, seasonal staff, and any part-time workers. Wage errors are easy to miss in businesses that hire quickly during peak season, so review the lowest-paid positions first.
5. The 2% Surcharge on Very High Incomes
For tax years beginning on or after January 1, 2026, a 2% surcharge applies to Maine taxable income above these thresholds, under 36 MRSA 5111(7):
- $1,000,000 for single filers
- $750,000 for married filing separately
- $1,500,000 for married filing jointly or head of household
This matters for business owners because an LLC is taxed by default as a pass-through entity. Members report their share of LLC income on their individual Maine returns, where the regular graduated personal income tax rates of 5.8% to 7.15% apply. If your share of business income pushes your Maine taxable income over a threshold, the surcharge applies to the amount above that threshold. An LLC that elects corporate treatment is taxed under the corporate rules instead, so the surcharge does not apply to the entity itself.
6. Mailed Notices and the Tax Appeals Process
Non-emergency laws from the 2026 session take effect July 29, 2026. One change affects every business that receives notices from Maine Revenue Services. A first-class mailed notice is now deemed received 7 days after mailing, instead of 3 days. Build that extra window into how your office logs and tracks state mail, and set your internal reminders from the deemed receipt date.
The Independent Office of Tax Appeals replaces the Board of Tax Appeals on January 1, 2027. If you expect to challenge a Maine Revenue Services decision, plan your appeal with the new office in mind, and have a CPA or attorney confirm the procedures that apply to your case.
7. Data Centers, BETE, and BETR
Under PL 2025 c. 768, data centers lose the Business Equipment Tax Exemption (BETE) beginning August 1, 2026. Businesses outside the data center category should not assume this change applies to them without checking the statute.
The 2026 supplemental budget, signed April 10, 2026, moved to cut or end the Business Equipment Tax Reimbursement (BETR). Because that proposal changed the reimbursement picture, check Maine Revenue Services for the current BETR status before you include any reimbursement in a budget or a forecast.
What Is Still Pending
Several proposals were discussed during the 2026 session, but they are not confirmed law. Do not plan around them until they are enacted and published:
- Corporate income tax rate changes. The current corporate rate is graduated from 3.5% to 8.93%. Any proposed change is not law unless the Legislature has enacted it.
- Substance testing. A bill on this topic exists, but confirm its status on the bill page before you treat it as a requirement.
- BETR cuts or elimination. The budget proposal is discussed above. Confirm the current status with Maine Revenue Services.
To check any bill, search the Maine Legislature at legislature.maine.gov. Use the correct session: 2026 was the second regular session of the 132nd Legislature, not the 133rd.
What Did Not Change: Annual Reports and Licensing
Several long-standing requirements still apply. Maine LLCs and corporations must file an annual report, which costs $85 and is due June 1 each year. The first report is due between January 1 and June 1 of the year after formation. Foreign LLCs pay $150, and foreign corporations pay $150. Filing happens through the Secretary of State's Annual Report Online portal.
Maine also has no general statewide business license and no general town license. Registering an LLC, a corporation, or an assumed name is a filing, not a license. Licensing is handled by activity:
- Municipal officers license named activities by local ordinance, and fees vary widely by town.
- The Health Inspection Program licenses eating places.
- The Department of Agriculture licenses food processors.
- State boards under the Department of Professional and Financial Regulation license trades. Maine has no general contractor or HVAC license.
Maine has 16 counties, but counties license nothing for ordinary businesses. The state has 482 organized municipalities: 23 cities, 430 towns, and 29 plantations. Your municipal office is the place to ask about local licensing. The state's free Business Answers assistant can help you identify which licenses your specific activity needs.
Action Checklist
- Confirm that PFML premiums are withheld and remitted quarterly, and that your headcount supports the rate you are using.
- Review your invoices and point-of-sale settings against the closed taxable-services list and the current sales tax rates.
- Audit hourly pay against the $15.10 minimum wage.
- If you are an owner with high income, estimate whether your Maine taxable income crosses a surcharge threshold, and review that with a CPA.
- Calendar the June 1 annual report deadline.
- Check the current BETR status and the corporate rate status before you finalize any budget.
- Update your mail-tracking process to reflect the 7-day deemed receipt rule for notices.
Where to Confirm the Current Rules
- Secretary of State, Bureau of Corporations, Elections and Commissions: maine.gov/sos/corporations-commissions
- Maine Revenue Services: maine.gov/revenue
- Seller's permit and sales tax filing: revenue.maine.gov
- Business Answers licensing assistant: maine.gov/businessanswers
- Maine Legislature bill pages: legislature.maine.gov
- Maine Small Business Development Centers (free advising): mainesbdc.org
Maine business law changes for 2026 affect payroll, sales tax, cannabis pricing, and owner-level income tax. Some of these rules are settled, while others, including the BETR status and several bills, are still moving. Verify each item against the agency or bill page before you act, and have a qualified attorney or CPA review your specific situation. This guide is informational only and is not legal or tax advice.