Maine

Maine has the highest state and local tax burden measured as a percent of income (2003, 12.2%). The individual income tax has four brackets ranging from 2% for taxable income up to $4,200 to 8.5% for taxable income over $16,700, with intermediate rates of 4.5% and 7%.The corporate income tax, also with four brackets, ranges from 3.5% of the first $25,000 of net income to 8.93% of net income in excess of $250,000. The state sales tax is 5% on most goods, although basic foods and medicines are exempted. No local sales taxes are permitted. There are also excise taxes on motor fuels, tobacco products, alcoholic beverages (the state controls all sales), insurance premiums, public utilities and pari-mutuels. Maine's estate tax is tied to the federal exemption for state death taxes, and is therefore set to be phased out by 2007 in tandem with the phasing out of the federal estate tax credit, unless the state takes positive action to establish an independent estate tax. Maine's revenue losses from the phasing out of its estate tax are estimated at -$3.6 million for 2002/03, -$16.2 million for 2003/04 and -$32.3 million for 2006/07. Death and gift taxes accounted for 0.9% of state tax collections in 2002. The state also collects various license fees and stamp taxes. Counties do not assess taxes, but they do make levies on municipalities and unorganized territories to meet county budgets. A relatively low 36% of total non-federal taxes are raised at local levels, with 64% raised at the state level.

Total state tax collections in Maine in 2002 amounted to $2.627 billion, of which 40.8% was generated by the state income tax, 31.8% by the state general sales and use tax, 15.3% by state excise taxes, 5.66% by state license fees, 2.9% by the state corporate income tax, and 1.8% by state property taxes.

The following table from the US Census Bureau provides a summary of taxes collected by the state in 2002.