Maine taxes in January will include higher cigarette, cannabis and streaming levies

Maine will raise the sales tax on adult-use cannabis from 10% to 14% and add a 5.5% sales tax on streaming services on Jan. 1, and the cigarette tax will increase by $1.50 per 20-pack on Jan. 5.

Maine is adopting several tax changes that take effect in January. Two changes begin on Jan. 1: the sales tax on adult-use cannabis will rise and a new sales tax on streaming services will start. On Jan. 5, the tax on cigarettes will increase by $1.50 per 20-pack. These items were included in the state budget as part of efforts to address a projected shortfall, while some other proposed taxes did not pass the Legislature. What was announced: - Streaming services will be subject to a 5.5% Maine sales tax beginning Jan. 1, and providers are required to show the tax as a line item or note that prices include state sales tax. - Sales tax on adult-use cannabis will increase from 10% to 14% starting Jan. 1. - The cigarette excise tax will rise from $2.00 to $3.50 per 20-pack on Jan. 5, and related taxes on other tobacco products (including vapes and nicotine pouches) will also increase. - State estimates indicate the streaming tax could bring about $17.5 million over the next two fiscal years, and the tobacco changes are expected to raise roughly $111 million over two years, with about $77 million attributed to the cigarette excise increase. - Some cannabis excise taxes were reduced for items such as cultivation material, trim and plants, which lowers certain excise revenue by about $10.2 million while the higher cannabis sales tax is expected to add roughly $15.4 million over two years. - Separate proposals to tax ambulances and pharmacies were not approved by the Legislature. Summary: These changes will raise state revenue and alter the price seen by purchasers of the affected goods and services, with implementation dates in early January. Officials have provided revenue estimates for the next two fiscal years. Undetermined at this time.