Maine Prepared Food and Lodging Tax: 8% on Meals, 9% on Lodging, 10% on Car Rental and What Counts as Prepared Food

Maine's general sales tax is 5.5%, but several categories cost more. Prepared food and on-premises liquor are taxed at 8%, lodging at 9%, and short-term car rentals at 10%. If you run a restaurant, cafe, caterer, brewery or bed and breakfast, or you rent out a room or a cottage, the rate depends on exactly what you sell and how you sell it. Most mistakes happen at the line between a taxable meal and an untaxed grocery item.

This guide covers each rate, the rules that decide which rate applies, the exemptions that matter for short-term rental hosts, and the registration steps. It is informational content, not legal or tax advice. Confirm your specific situation with Maine Revenue Services or a qualified CPA before you set prices or file.

Maine's sales tax rates at a glance

The table below lists the rates that matter most for food, drink, lodging and rental businesses.

Category	Rate	What it covers
General sales tax	5.5%	Most taxable retail sales and the closed list of taxable services
Prepared food	8%	Meals served on or off premises, and food and drink you prepare ready to consume
Liquor in licensed establishments	8%	Includes on-premises sales at breweries, wineries and distilleries
Lodging	9%	Hotels, rooming houses, and tourist or trailer camps
Short-term car rental	10%	Automobile rental under one year

Unless an item or service fits one of the higher-rate categories, the 5.5% general rate applies if the sale is taxable at all. Do not assume a higher rate just because a business feels like hospitality.

What counts as prepared food (8%)

Maine taxes prepared food at 8%, not 9% (36 MRSA 1811(1)(D)). Prepared food includes:

• Meals served on premises or off premises, including catering.
• Food and drink you prepare and sell ready to consume, such as sandwiches, hot entrees and brewed coffee.
• All food sold at a location where retailer-prepared food is more than 75% of gross receipts. Once prepared food dominates a location, the grocery items sold there are taxed at 8% too.

Catering is a meal served off premises, so it is taxed at 8%. Brewed coffee you serve or sell for immediate drinking is also taxed at 8%. Neither falls under the 5.5% general rate.

What is not prepared food: grocery staples

Bulk grocery staples are not prepared food (36 MRSA 1752(8-A) and 1752(3-B)). The state names bread, jam, pickles, honey and maple syrup as examples. A farm stand selling a jar of honey or a bakery selling a loaf of bread to take home is generally on the grocery side, as long as the location stays at or below the 75% line.

Desserts and bakery items get their own carve-out under 36 MRSA 1752(3-B)(G), which makes take-home bakery sales the gray area. For take-home bakery sales at a location below the 75% line, check with Maine Revenue Services before you assume either rate. Do not guess on a sales mix that could move a business across the threshold.

Liquor sold in licensed establishments

Liquor sold in licensed establishments is taxed at 8%. That includes on-premises sales at breweries, wineries and distilleries. Confirm with Maine Revenue Services how your on-premises and off-premises sales are classified, since a mixed operation can have both. Licensing questions themselves go to the Bureau of Alcoholic Beverages and Lottery Operations.

Lodging at 9%

Lodging in a hotel, rooming house, or tourist or trailer camp is taxed at 9%. For individual hosts, the real question is whether a particular rental counts as taxable lodging at all. Several Maine rules answer that question, and they are easy to misread.

Maine short term rental tax: the rules hosts need

If you rent a room, apartment, cottage or home for short stays, your Maine short term rental tax obligation depends on how many days you rent, who the guest is, and how the booking is made. Four rules matter most:

1. Casual rentals under 15 days a year are not taxed. Under 36 MRSA 1764, a casual rental of fewer than 15 days in a year is not taxed. Keep a dated log of every rental night so you can prove the count if asked.
2. Transient rental platforms must register. Under 36 MRSA 1754-B(1-B)(F), transient rental platforms must register with the state. If you list through one, ask the platform how it handles Maine tax and confirm the arrangement with Maine Revenue Services.
3. Owners expecting under $2,000 of tax may report on their income tax return. Under 36 MRSA 1951-A(3), casual-rental owners who expect to owe less than $2,000 in tax may report it on their income tax return. Confirm the procedure with Maine Revenue Services before you rely on it.
4. The 28-day exemption is narrow. Under 36 MRSA 1760(20), it covers only an individual who has no other primary residence, an individual living away from home for work or school, and employers housing employees. Length of stay alone does not qualify a guest.

Meals and lodging can be sold together. A breakfast served on premises to a guest is a prepared food sale at 8%, while the room itself is lodging at 9%. Bundled pricing complicates the split, so confirm with Maine Revenue Services how to allocate a package price before you file.

Short-term car rentals at 10%

Automobile rentals under one year are taxed at 10%. That rate applies to the rental itself. A business that rents vehicles for periods under one year should charge 10%, not the general rate or the lodging rate.

Services Maine does not tax

Maine's list of taxable services is closed. Lawn care, towing, handyman work and junk removal are not on it. If you run one of these businesses, do not add sales tax to your invoices on the assumption that every service is taxable.

Registering and licensing

Maine has no general statewide business license, and no general town license either. Registering an entity or an assumed name is a filing, not a license. Licensing is by activity, so identify each license your operation needs:

• Eating places are licensed by the Health Inspection Program.
• Food processors are licensed by the Department of Agriculture, Conservation and Forestry.
• Named local activities are licensed by municipal officers under local ordinances. Fees vary widely by town, so ask your city or town office.
• Trades and professions are licensed by state boards under the Department of Professional and Financial Regulation. Maine has no general contractor or HVAC license.

To collect sales tax, register with Maine Revenue Services at revenue.maine.gov before you begin. For a free check of which licenses apply to your activity, use the Business Answers assistant at maine.gov/businessanswers.

If you form an LLC or corporation, that is a Secretary of State filing made through the Division of Corporations, UCC and Commissions. LLCs and corporations file an $85 annual report due June 1 each year. Sole proprietors and general partners instead file a sworn assumed-name certificate with the municipal clerk.

Common mistakes to avoid

• Charging 9% on prepared food. Prepared food is taxed at 8%.
• Charging 5.5% on catering or brewed coffee.
• Assuming every rental is exempt. The 15-day casual rental rule is an annual count, and the 28-day exemption covers only specific people.
• Treating grocery items as always 5.5% at a location where prepared food is more than 75% of gross receipts.
• Charging sales tax on lawn care, towing, handyman work or junk removal.

Next steps

1. List every product and service you sell and match each one to a rate in the table above.
2. Calculate whether prepared food is more than 75% of gross receipts at each location.
3. Register with Maine Revenue Services before you collect tax.
4. Confirm your activity licenses with the Health Inspection Program, the Department of Agriculture, Conservation and Forestry, your municipal office, or the relevant state board.
5. Ask Maine Revenue Services about any gray area, especially take-home bakery sales, bundled packages and short-term rental obligations.

Where to confirm the rules

Maine Revenue Services publishes its tax guidance at maine.gov/revenue. The Secretary of State's corporations and commissions pages are at maine.gov/sos/corporations-commissions. Free small business counseling is available through the Maine Small Business Development Centers.

Disclaimer: This article is informational content, not legal or tax advice. Maine's tax rules, statute references and local requirements change. Consult a qualified attorney or CPA before making decisions, especially if you operate multiple properties, sell both grocery and prepared food, or hold a liquor license.