Maine has the Sixth Highest Tax Burden in the Nation for 2015

May 31, 2017

In Fiscal Year (FY) 2015, Maine collected $6.7 billion in state and local taxes. While this is an impressive sum of money, it tells us little about whether or not the average Maine taxpayer can afford this level of taxation.



Click here to view tax burden data by state, type of tax, and for years 1950 to 2015


As shown in Chart 1, Maine’s state and local tax burden (tax collections divided by private sector personal income) was the sixth highest in the nation for FY 2015 at 18.2 percent—or 27 percent above the national average of 14.4 percent.


Chart 1 Maine State and Local Tax Burden FY 2015.jpg


#ME #taxburden in FY 2015 was the 6th highest in the nation at 18.2%— 27% above US average @keypolicydata #MEpolitics (click to tweet)


As shown in Chart 2, Maine’s tax burden has increased over time by 103 percent to 18.2 percent in FY 2015 from 9 percent in FY 1950.


Chart 2 Maine Tax Burden by Type of Tax FY 1950 to 2015.JPG


#ME #taxburden has increased 103% between FY 1950 to 2015 to 18.2% from 9% @keypolicydata #MEpolitics (click to tweet)


Click here to view tax burden data by state, type of tax, and for years 1950 to 2015


As shown in Chart 3, Maine’s 18.2 percent tax burden is greater than these combined industries: manufacturing (9.7 percent), retail trade (7.9 percent), and utilities (0.5 percent).


Chart 3 Maine State and Local Tax Burden vs. Major Industry FY 2015.JPG


#ME #taxburden > combined industries: manufacturing, retail, and utilities @keypolicydata #MEpolitics (click to tweet)


Maine’s high tax burden by type is driven by a high individual income tax burden (4.2 percent, 12th highest) and a very property tax burden (7.1 percent,3rd highest).


Maine must also contend with neighboring New Hampshire (home of the only tax havens left in America) which does not have a sales tax and lower excise taxes on liquor, cigarettes, and gas. This dynamic has created a situation where Maine taxpayers can arbitrage the tax differential in their favor through cross-border shopping in New Hampshire. In fact, my analysis of Maine/New Hampshire cross-border shopping found that (pdf):

“. . . per capita retail sales in the adjacent bordering counties in Maine (Oxford and York) and New Hampshire (Coos, Carroll, Strafford and Rockingham) have been diverging ever since Maine adopted the sales tax in 1951.  By 2007, the retail gap was $8,660 per person ($19,976 versus $11,316).  If Maine had the same level of retail activity as New Hampshire, retail sales would have been up to $2.2 billion higher—from $2.9 billion to $5.1 billion—and created thousands of retail jobs.”


This cross-border shopping has worsened in Maine since a “temporary” 10 percent increase in the sales tax (to 5.5 percent from 5 percent) went in effect on October 1, 2013. Under the original law, the sales tax increase was supposed to sunset on June 30, 2015. Anyone care to guess what Maine’s sales tax rate is as of 2017? If you guessed 5.5 percent you are correct . . . so how’s that “temporary” sales tax hike working out for Maine’s beleaguered taxpayers?!



Additionally, the higher sales tax rate also significantly raises the after-tax costs of cigarettes as well since in Maine the sales tax applies to cigarettes (this also creates the odd situation of taxing a tax as the cigarette excise tax is hidden within the price of cigarettes). This combination has surely exacerbated the cross-border shopping problem with New Hampshire—taxes matter.


Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in Maine—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.


Maine only has 16 counties and are listed below from highest to lowest local government tax burden:


  • Piscataquis County, ME (9.6 percent)
  • Oxford County, ME (9.4 percent)
  • Lincoln County, ME (9 percent)
  • Hancock County, ME (8.8 percent)
  • Washington County, ME (8.8 percent)
  • Knox County, ME (8.6 percent)
  • Somerset County, ME (8.4 percent)
  • Franklin County, ME (7.7 percent)
  • York County, ME (7.2 percent)
  • Sagadahoc County, ME (7.2 percent)
  • Aroostook County, ME (7.1 percent)
  • Androscoggin County, ME (7.1 percent)
  • Penobscot County, ME (7 percent)
  • Waldo County, ME (6.6 percent)
  • Kennebec County, ME (6.5 percent)
  • Cumberland County, ME (6.1 percent)


Chart 4 Maine Local Tax Burden by County FY 2015.JPG


Click here to view tax burden data by state, type of tax, and for years 1950 to 2015



Finally, don’t forget to watch our exclusive time-lapse video of state and local tax burdens over the last 65 years! See if your state has been above or below the national average?



Category: Tax Burdens

J. Scott Moody

Scott has nearly 20 years of experience as a public policy economist. He is the author, co-author and editor of over 180 studies and books. His professional experience also includes positions at the American Conservative Union Foundation, Granite Institute, Federalism In Action, Maine Heritage Policy Center, Tax Foundation, and Heritage Foundation.

blog comments powered by Disqus

Stay Up-To-Date on Your State's Key Policy Data - Economics, Politics, Demographics - by Joining Our Mailing List Today!

Check Out Our Unique Apps:

U.S. Capitol.jpg

Government Workforce

Tax Squeeze.jpg

Tax Burden

Strings Attached to Federal Dollars.jpg

Federal Tax and Spend

Hundred Dollar Bill.jpg

Cost of Living (COLI)



Measuring a Dollar.jpg

Federal Tax & COLI


Federal Pension

United States Office of Personnel Management Seal.jpg

Federal Payroll

Check out more

Stories from our

Media Partner:

Check Out All Posts For Your State:

Alabama.jpg  Alabama

Alaska.jpg  Alaska   

Arizona.jpg   Arizona 

Arkansas.jpg  Arkansas

California.jpg  California

Colorado.jpg  Colorado

Connecticut.jpg  Connecticut

 Delaware.jpg  Delaware

Florida.jpg  Florida

 Georgia.jpg  Georgia

Hawaii.jpg  Hawaii

  Idaho.jpg  Idaho

   Illinois.jpg  Illinois

   Indiana.jpg  Indiana

  Iowa.jpg  Iowa

  Kansas.jpg  Kansas

  Kentucky.jpg  Kentucky

   Louisiana.jpg  Louisiana

   Maine.jpg  Maine

  Maryland.jpg  Maryland

Massachusetts.jpg  Massachusetts

Michigan.jpg  Michigan

Minnesota.jpg  Minnesota

  Mississippi.jpg  Mississippi

Missouri.jpg  Missouri

Montana.jpg  Montana

Nebraska.jpg  Nebraska

Nevada.jpg  Nevada

New Hampshire.jpg  New Hampshire

New Jersey.jpg  New Jersey

New Mexico.jpg  New Mexico

New York.jpg  New York

North Carolina.jpg  North Carolina

North Dakota.jpg  North Dakota

Ohio.jpg  Ohio

Oklahoma.jpg  Oklahoma

Oregon.jpg  Oregon

Pennsylvania.jpg  Pennsylvania

Rhode Island.jpg  Rhode Island

South Carolina.jpg  South Carolina

South Dakota.jpg  South Dakota

Tennessee.jpg  Tennessee

Texas.jpg  Texas

Utah.jpg  Utah

Vermont.jpg  Vermont

Virginia.jpg  Virginia

Washington.jpg  Washington

West Virginia.jpg  West Virginia

Wisconsin.jpg  Wisconsin

Wyoming.jpg  Wyoming