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posted Mar 23, 2025 8:04:25 AM

If I own a condo in Maine, and rent it out, should I answer "Yes" to the question about Sales Tax on Casual Rentals of Living Quarters?

I collect $1800 per month from my tenant, and I've reported it on my Federal return. On my Maine state return, should I answer "Yes" to the question about Sales Tax on Casual Rentals of Living Quarters?

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Expert Alumni
Mar 23, 2025 8:20:38 AM

Yes, you should generally answer "yes" to the question about Sales Tax on Casual Rentals of Living Quarters on your Maine state return. According to Maine Revenue Services Sales, Fuel & Special Tax Division Instructional Bulletin No. 32, the Maine Sales and Use Tax Law imposes a tax on the rental of living quarters, including casual rentals. Since you collect $1,800 per month from your tenant, this qualifies as a taxable rental.

 

Here are some key points from the bulletin:

  • Taxable Rentals: The law imposes a tax on the rental of living quarters in any hotel, rooming house, tourist camp, or trailer camp, including casual rentals
  • Registration Requirement: Every person who owns, manages, or operates a rental property, whether in the regular course of business or on a casual basis, must register for and collect Maine sales tax on the rentals
  • Exemptions: Casual rentals for fewer than 15 days each calendar year are generally exempt from sales tax. However, if the property is managed by a real estate agent or another person engaged in the business of renting or managing rentals, sales tax must be collected regardless of the rental duration - see resource here for details.