Short-Term Rental Taxes in Maine: What Investors Need to Know in 2025

Maine's coastal STR market is one of the most distinctive in the Northeast, anchored by Acadia National Park and Bar Harbor, the Kennebunk/Kennebunkport resort area, Boothbay Harbor, and Old Orchard Beach. The state's tax environment is challenging: non-conformity to bonus depreciation, a top income tax rate of 7.15%, and a 9% sales tax on lodging. Yet Maine's unique market characteristics — the rugged coast, the national park, the authentic fishing village character — sustain premium STR demand.

Maine State Income Tax on Rental Income

Maine's graduated income tax reaches its top rate of 7.15% at relatively modest income levels (approximately $53,150 for single filers). This means nearly all STR investors with meaningful rental income pay at the top rate. Maine begins with federal AGI and makes Maine-specific modifications, including the depreciation addback for bonus depreciation.

Maine's 9% Lodging Sales Tax

Maine's 9% sales tax on short-term lodging is one of the highest in New England (Connecticut is 15% room occupancy, but Maine's 9% is high for a sales tax rate). The tax applies uniformly statewide with no local option additions, simplifying compliance across Maine's many coastal and mountain STR locations. STR operators must register with the Maine Revenue Services to collect and remit.

Top Maine STR Markets

Acadia National Park and Bar Harbor

Acadia National Park draws approximately 3.5 million visitors annually, making Bar Harbor one of the most visited places in New England. The park encompasses most of Mount Desert Island, and Bar Harbor serves as the primary visitor services hub. The STR market here is intensely seasonal: the Park Loop Road officially opens for the season in spring, and the high season runs June through October, with fall foliage in early October a particular peak period.

Bar Harbor properties command premium rates during peak season — quality 3–4 bedroom homes can generate $150,000–$250,000 in annual gross revenue with strong occupancy during the June–October window. The challenge is the relatively short season; winter months see dramatically lower occupancy. Properties with distinctive coastal views or within walking distance of Bar Harbor's waterfront village command the strongest performance.

Kennebunkport: Premium Coastal Maine

Kennebunkport is Maine's most upscale traditional resort town, known for the Bush family compound, a charming historic village center (Dock Square), and pristine beaches. STR properties in Kennebunkport range from converted historic New England homes to modern oceanfront cottages. The market has a premium demographic and commands among the highest nightly rates in Maine outside of Bar Harbor.

Cost Segregation in Maine: High-Season Revenue Markets

Maine's non-conformity to bonus depreciation and 7.15% top rate create a material year-one state timing penalty. For a $600,000 Bar Harbor property with $145,000 in cost seg deductions at 37% federal, the year-one federal savings are $53,650. The Maine state timing penalty at 7.15% on the $145,000 addback is approximately $10,368 in year one — recovered over subsequent years as MACRS depreciation on state returns exceeds federal (since federal already took it all in year one). Net year-one benefit: $43,282.