Proposed Legislation Could Broaden Maine’s Sales Tax Exemption for Nonprofit Organizations

Maine’s current Sales and Use Tax and Service Provider Tax laws do not provide exemptions for all entities that qualify as tax-exempt organizations under Internal Revenue Code Section 501(c)(3). Rather, exemptions are provided for some specific types of organizations, including (but not limited to) churches, hospitals, libraries and schools. This means that some federally exempt organizations do not benefit from these exemptions, which creates confusion for these organizations and the businesses that sell to them.

Proposed legislation would change this. The bill (H.P. 43) would broaden the exemptions to apply to all 501(c)(3) organizations as long as the property and services purchased are used primarily in the activity for which the entity was organized. This would benefit many organizations not currently treated as exempt, and simplify compliance.

We are monitoring the status of the legislation and will provide further updates as they are available.

For more information, please contact your BNN tax advisor at 800.244.7444.



Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.

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