Maine Income Tax for Business Owners 2026: 5.8%, 6.75% and 7.15% Brackets, the 2% Surcharge Above $1 Million and Corporate Rates Up to 8.93%
Maine Income Tax for Business Owners 2026: 5.8%, 6.75% and 7.15% Brackets, the 2% Surcharge Above $1 Million and Corporate Rates Up to 8.93%
If you run a business in Maine, the state income tax you pay depends on how the business is organized. The Maine income tax rate for individuals is graduated across three brackets of 5.8%, 6.75% and 7.15%. For tax years beginning on or after January 1, 2026, a 2% surcharge also applies to Maine taxable income above set thresholds. Corporations pay a separate graduated corporate income tax with rates from 3.5% to 8.93%.
This guide gives the 2026 figures, explains which rates apply to which entity type, and lists the items you should confirm with the state before you file. This is informational content, not legal or tax advice. Talk to a CPA or tax attorney before you make an election or structure your business around these rules.
Which Maine tax applies to your business
Maine does not tax most small businesses at the entity level. The income of a sole proprietorship, a single-member LLC, and a multi-member LLC taxed as a partnership passes through to the owners, who report it on their individual Maine returns. Only entities taxed as corporations pay the corporate income tax.
| Business type | Federal tax treatment | Where the Maine tax is reported |
|---|---|---|
| Sole proprietorship | Income reported by the owner | Owner's Maine individual income tax return |
| Single-member LLC (default) | Disregarded, treated like a sole proprietorship | Owner's Maine individual income tax return |
| Multi-member LLC (default) | Partnership, pass-through | Each member's Maine individual income tax return |
| LLC that elects corporate treatment | Taxed as a corporation | Maine corporate income tax return (Form 1120ME) |
| C corporation | Taxed as a corporation | Maine corporate income tax return (Form 1120ME) |
Maine has no LLC franchise tax and no separate annual LLC tax. The only recurring state filing charge for an LLC or corporation is the $85 annual report fee, covered below.
2026 individual income tax brackets
Maine's individual rates are set in 36 MRSA 5111 at 5.8%, 6.75% and 7.15%. The thresholds below are the 2026 figures published by Maine Revenue Services. The brackets apply to Maine taxable income, so the rate on each dollar depends on the bracket that dollar falls into.
| Filing status | 5.8% applies up to | 6.75% applies up to | 7.15% applies above |
|---|---|---|---|
| Single and married filing separately | $27,400 | $64,850 | $64,850 |
| Married filing jointly | $54,850 | $129,750 | $129,750 |
| Head of household | $41,100 | $97,300 | $97,300 |
The 2026 standard deduction reduces income before the brackets apply:
- Single and married filing separately: $15,700
- Married filing jointly: $31,400
- Head of household: $23,550
The 2% surcharge on income above $1 million
Under 36 MRSA 5111(7), as added by LD 2212 (signed April 10, 2026), an individual owes an additional 2% on Maine taxable income above a threshold. The rule applies to tax years beginning on or after January 1, 2026. The thresholds are:
- Single: $1,000,000
- Married filing separately: $750,000
- Married filing jointly or head of household: $1,500,000
The surcharge is 2% of the income above the threshold, not 2% of all income. For example, a single owner with $1,200,000 of Maine taxable income owes the surcharge on the $200,000 above the threshold, which is $4,000 (2% of $200,000). The thresholds are indexed starting in 2027, so the dollar figures will change in later years.
Because the surcharge is measured on individual taxable income, it can reach owners of pass-through businesses whose profits flow onto their personal returns. Ask Maine Revenue Services how the surcharge interacts with any pass-through entity tax election you might make.
Corporate income tax rates
An LLC that elects corporate treatment and a C corporation pay the graduated corporate rates under 36 MRSA 5200(1-A). Each bracket uses a base amount plus a percentage of the income above the bracket's starting point:
| Maine taxable income | Tax owed |
|---|---|
| Up to $350,000 | 3.5% of taxable income |
| $350,000 to $1,050,000 | $12,250 plus 7.93% of the amount over $350,000 |
| $1,050,000 to $3,500,000 | $67,760 plus 8.33% of the amount over $1,050,000 |
| Over $3,500,000 | $271,845 plus 8.93% of the amount over $3,500,000 |
As an example, a corporation with $500,000 of Maine taxable income owes $12,250 on the first $350,000, plus 7.93% of the remaining $150,000 ($11,895), for a total of $24,145. The corporate return is Form 1120ME.
The pass-through entity tax election
The 2026 state budget created an elective pass-through entity tax for partnerships and S corporations. It lets the business pay tax at the entity level instead of passing the income to owners, which can change how the owners' personal tax is calculated. The election process, the rate, and the deadlines are not settled in this guide. Confirm all three with Maine Revenue Services before you decide, and have a CPA model the effect on your owners' individual returns.
Sales tax rates for Maine businesses
Income tax is only part of the picture. If your business sells taxable goods or services, Maine sales tax applies at these rates:
- 5.5% general rate
- 8% on prepared food and on-premises liquor
- 9% on lodging
- 10% on short-term car rentals
The list of taxable services in Maine is closed. Lawn care, towing, handyman work and junk removal are not on the list, so those services are generally not subject to sales tax. Confirm your own situation with Maine Revenue Services before you assume an exemption, and apply for a sales tax permit through the agency's online services at revenue.maine.gov if your business makes taxable sales.
Annual report and other recurring filings
Every Maine LLC and corporation must file an annual report on Form MLLC-13 or MBCA-13 for $85. The report is due June 1 each year. The first report is due between January 1 and June 1 of the year after formation. You can file through the Annual Report Online system on the Secretary of State's corporations page. The annual report is not a tax return, but it keeps your entity in good standing, which matters if you need to prove your status to a bank or a lender.
Steps to take before you file
- Confirm how the IRS classifies your entity for federal purposes, since Maine generally follows that treatment.
- Estimate your Maine taxable income for 2026 and compare it with the bracket and surcharge thresholds for your filing status.
- If you are an owner of a pass-through business, ask Maine Revenue Services about the pass-through entity tax election and its deadlines.
- If your business sells taxable goods or services, confirm the sales tax treatment of each product or service and apply for a permit if required.
- Put the June 1 annual report deadline on your calendar, and file your first report between January 1 and June 1 of the year after formation.
For licenses that are not taxes, Maine has no general statewide business license. Licensing is set by activity and by town or city, so the free Business Answers assistant at maine.gov/businessanswers is a good place to start.
Where to confirm the numbers
Tax rates, thresholds and rules change, and the figures above reflect the 2026 published schedules. Check the current figures on the Maine Revenue Services website before you file or make a decision. For the entity filings and annual report, use the Maine Secretary of State.
This article is informational content, not legal or tax advice. Maine's rules for pass-through owners, corporations, and the surcharge can be complicated. Consult a qualified CPA or tax attorney who knows Maine law before you act on any of this information, especially if your business has multiple owners, large profits, or plans to change its entity type.