On June 5th, the Governor of Maine signed into law LD 346, a bill that closes sales tax loopholes for online stores with nexus in Maine. Maine has now enacted laws that are similar to laws passed in Missouri, Arkansas, New York, and other states saying that selling goods online where the company has a brick-and-mortar store makes merchants subject to sales tax. Businesses in Maine are now facing the same laws many other states have adopted. You can read the full bill on the Maine Legislature’s website. It’s important to know, however, there are still some exemptions in the Maine law that aren’t available in other states if you’re worried about your business’s relationship with Maine as an out-of-state business.
The following do not constitute nexus, as specified in the law: Catalogs, flyers, or telephone and electronic media business solicitations included with ordered goods shipped to Maine Trade show, seminar, or convention attendance in Maine Company meetings for shareholders or company retreats in Maine Holding a bank account or bank relationship in Maine Using a printing vendor in Maine. The motivations of these five points are clear–Maine will gladly accept your money when your company sets out to enjoy what they have to offer, both in recreational and business visits, but Maine wants you to pay what’s due when you’ve got a business relationship in Maine.
If you’ve got a warehouse in Maine for your online business, it’s time to start collecting sales tax. While Maine certainly isn’t the first to adopt these laws to close online sales tax loopholes when possible, they’re not going to be the last either. States that haven’t enacted these types of laws yet will probably soon do so to prevent sales tax losses. A study indicated that Maine was losing somewhere between $19 and $24 million each year because of their sales tax loophole and closing it was important to maintaining services for residents. Other states aren’t too far behind them.