Corporate Income Tax

  1. What is Maine's Corporate Income Tax Rate?
  2. When does Maine have jurisdiction to impose a tax on a corporation?
  3. Who must file Form 1120ME?
  4. When is the Maine corporate income tax return due?
  5. How do I request an extension of time to file Form 1120ME?

1. What is Maine’s Corporate Income Tax Rate?

For tax years beginning on or after January 1, 2018, the Maine corporate tax rates are as follows:

If adjusted federal taxable income is:

Greater than

But not over

The gross tax is:

$0 $350,000 3.5% of federal taxable income
$350,000 $1,050,000 $12,250 plus 7.93% of the excess over $350,000
$1,050,000 $3,500,000 $67,760 plus 8.33% of the excess over $1,050,000
$3,500,000 or more   $271,845 plus 8.93% of the excess over $3,500,000

For tax years beginning before January 1, 2018, the Maine corporate tax rates are as follows:

If adjusted federal taxable income is:

Greater than

But not over

The gross tax is:

$0 $25,000 3.5% of federal taxable income
$25,000 $75,000 $875 plus 7.93% of the excess over $25,000
$75,000 $250,000 $4,840 plus 8.33% of the excess over $75,000
$250,000 or more   $19,418 plus 8.93% of the excess over $250,000

2/14/19

2. When does Maine have jurisdiction to impose a tax on a corporation?

When a corporation’s presence in, or connection with, a state reaches a certain level, the corporation is said to have “nexus” with that state, subjecting the corporation to the state’s income tax laws. Nexus with Maine is generally created by conducting business in Maine, or by owning or using property in Maine. MRS Rule 808 provides detailed criteria about activities that create Maine nexus. A determination about whether or not a corporation has nexus with Maine must be made in light of all of the relevant facts, and a physical presence in the state is not necessary to establish nexus in all circumstances. If you need assistance determining whether or not a corporation has nexus with Maine, you may complete a nexus questionnaire and send it to MRS with a cover letter that identifies who MRS should contact for more information. You must enter a response to every question. The questionnaire is available in the corporate income tax section of maine.gov/revenue/forms.

12/3/12

3. Who must file Form 1120ME?

A corporation that has nexus with Maine is required to file Form 1120ME if it has Maine income and is subject to federal corporate income tax. Tax exempt corporations with unrelated business income and subchapter S corporations with certain taxable gains must file Form 1120ME to report taxable income. Certain financial institutions are not subject to corporate income tax, but must file Form 1120B to report franchise tax.

12/3/12

4. When is the Maine corporate income tax return due?

The Maine corporate income tax return (Form 1120ME) is due on the same date as your federal corporate income tax return (the fifteenth day of the fourth month after the end of the tax year), without regard to an extension to file. The Maine filing due date for tax on unrelated business income (as reported on federal Form 990T) is the same as the federal due date, generally 4 1/2 months after the end of the tax year (April 15 for calendar year filers) for employees' trusts as defined in section 401(a), IRAs (including SEPs and SIMPLEs), Roth IRAs, Coverdell ESAs, or Archer MSAs and 5 1/2 months after the end of the tax year (May 15th for calendar year filers) for all other organizations.

8/9/18

5. How do I request an extension of time to file Form 1120ME?

Maine Revenue Services does not require a written request to obtain an automatic extension to file. If you are unable to file your return by the original due date, Maine allows an automatic six-month extension of time in which to file a corporate income tax return. Requests for additional time to file the Maine return beyond the automatic six-month extension period must be submitted in writing prior to the expiration of the extension period. Generally, the total Maine extension period may not exceed eight months. However, if the Internal Revenue Service has granted an extension to file the federal return beyond the automatic six-month period, the date for filing the Maine return is automatically extended for the same period as long as proof of the federal extended due date is attached to the Maine return when filed.

9/11/18