Report: Maine has 3rd lowest sales tax
Of states with state or local sales tax, Maine has the third lowest in the country, according to a recent study by the Tax Foundation.
The study found the states with the lowest combined local and state sales tax were Alaska (1.7%), Hawaii (4.35%), Maine (5%), Wisconsin (5.3%) and Wyoming (5.5%). The study says that sales taxes can foster competition between jurisdictions — state or local — when there is a significant discrepancy between combined sales tax rates in adjacent jurisdictions, as with New Hampshire, which has no sales tax. Maine does not allow municipalities to levy their own sales taxes.
Charlie Colgan, a professor of public policy and management at the University of Southern Maine’s Muskie School of Public Service, told the Portland Press Herald that the tax discrepancy is, as a result, felt strongest near the New Hampshire border, particularly for higher-priced items. Colgan said that he doesn’t expect the state’s two-year sales tax increase that takes effect in October — from 5% to 5.5% — will have a significant impact on consumer spending in the years ahead.
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