How To Pay Your Maine Excise Tax
Maine’s excise tax rate applies annually, and you can expect to pay $24 per $1,000 of your vehicle’s MSRP for cars in the first model year.
Written by Thidas Senanayaka
Reviewed by Bellina Gaskey
If you want to drive a car in Maine, you’ll have to get it registered, which will require you to pay an annual excise tax. The Maine excise tax rate starts at $24 per $1,000 of the vehicle’s MSRP and changes the older your vehicle gets.
Taxes are ubiquitous, but that doesn’t make them any less confusing. From transfer taxes to property taxes, it looks like there’s no shortage of tax-related stress to be felt. Here,
Jerry
—the car insurance
comparison app—will go over Maine’s excise tax.Read on to find out about what it is, how to pay it, and how much you need to pay, along with some bonus tips on how to find
cheap car insurance in Maine
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What is an excise tax in Maine?
Excise taxes are a type of legislated tax that usually applies to specific manufactured goods. This is not the same as sales taxes, which are usually only paid once at the point of sale.
Maine has several excise taxes that apply to personal property that you may need to register with the government, such as an aircraft, mobile home, camper trailer, or your car.
You have to pay an excise tax prior to registering or renewing your vehicle in Maine, and this must be done annually. Nearly all vehicles registered in the state are subject to the tax.
The specifics are a little complicated, and you can find them on the Maine Revenue Services
website
or Title 36, Chapter 111
of the Maine Revised Statutes. Here, Jerry has broken down the important bits:- The excise tax rate is calculated on the Manufacturer’s Suggested Retail Price (MSRP) of the vehicle and drops as the model year ages
- The rate starts at 24 mills for the first or current year of the model, which essentially means $24 for every $1,000 of the MSRP, or 2.4%
- For motor vehicles, $5 is the minimum excise tax rate
- The excise tax is imposed annually
Excise taxes are municipal taxes, so to pay yours, you’ll have to do so at the local town office where you live. Here’s a
list
of the municipalities in Maine. The same rule applies if you’re leasing a vehicle and not the owner. If you’re a non-resident, your municipality will be the one you’re temporarily staying at. If you have no residing place in Maine but must pay the Maine excise tax, the excise tax can be paid to the Maine Secretary of State.
How to calculate excise tax
It’s helpful to know how much you may owe every year. Maine’s motor vehicle excise tax is based on your vehicle’s MSRP and model year. It gets lower the older your car gets. This table breaks the calculation down:
Year of model | Excise tax rate |
|---|---|
Current or first year of model | $24 per $1000 of MSRP (2.4%) |
Second year of model | $17.50 per $1000 of MSRP (1.75%) |
Third year of model | $13.50 per $1000 of MSRP (1.35%) |
Fourth year of model | $10 per $1000 of MSRP (1.0%) |
Fifth year of model | $6.50 per $1000 of MSRP (0.65%) |
Sixth year of model and following years | $4 per $1000 of MSRP (0.4%) |
Based on this, let’s say you have a three-year old car with an MSRP of $19,500. The excise tax would be $263.25.
The “current or first” year of model rate may be a little confusing. This applies to current-year model vehicles and motor vehicles registered in their first year of availability. So if you register a 2022
Nissan Altima
in 2022 or register a 2023 Nissan Altima in 2022 (which is the year it is first available), you will pay $24 per $1000 of the Altima’s MSRP in both cases.Of course, if you register the 2023 Altima in 2022 and pay the excise tax then, you’ll be subject to the second year of model rate for when you have to pay your excise tax in 2023.
Penalties for nonpayment
It goes without saying that you should probably pay your excise tax right when it’s due. Avoiding payment, even for a few days, can cost you more in the long run. Generally, if you fail to pay your excise tax, you’ll be liable for a penalty of 1% of the unpaid tax amount for each month the failure continues, to a maximum of 25% of the unpaid tax monthly.
Even if you pay within the month, you’ll have to pay the interest on the tax amount for the few days that you forgot to pay.
Usually, if you don’t pay what you’re supposed to, you’ll receive a demand notice from the State Tax Assessor giving you a 10-day period to pay. If you miss this window, the Secretary of State may suspend any registration certificate and plates issued for your vehicle—making it illegal for you to drive until you complete the payment.
How to avoid excise tax in Maine
You can potentially qualify for an exemption—but you cannot “get out of” paying your lawfully required taxes. Maine excise tax exemptions include:
- Driver education: if your vehicle is registered for use in driver’s ed, you’ll be exempt from the excise tax
- Volunteer fire departments: motor vehicles owned by fire departments
- Dealers: motor vehicles owned by registered dealers held solely for demonstration
- Benevolent and charitable institutions: motor vehicles owned and used by charities
- Active military stationed in Maine: if you’re serving on active duty in the US Armed Forces and stationed in Maine, you’re exempt
- Certain non-residents: if your car is permitted to operate without Maine registration, you are exempt from the excise tax
Some motor vehicles may have personal property tax exemptions apply to them as well. You may also be able to get credits and refunds of the excise tax when a current registration is transferred to a replacement vehicle.
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How to save on car insurance in Maine
Liability car insurance is mandatory in Maine, just like paying your excise tax. Still, most drivers will want to have additional insurance coverage in place for better protection—and the good news is, it’s easier than ever to make sure you’re getting the best rate for the best coverage.
Just download the
Jerry
app or sign up online. We’ll take some key info about you and your car, then get to work finding the best deals for you across dozens of top car insurance providers.The average Jerry user who switches coverage on the app saves over $800 a year on car insurance. Don’t just take our word for it:
“I would 11/10 recommendJerry. I was originally quoted $700+ for insurance for my new car, but by using Jerry I got my payments down to $320 a month. They also have a great support team ready to answer any questions!” —Tobias F.
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