The following guidelines provide background information on the most common types of filings and the related exemptions in Maine.
Maine’s Charitable Solicitations Act [Title 9 MRS §5001, et seq.]
Maine’s Charitable Solicitations Act requires non-religious charitable organizations—with a few exceptions listed in 9 M.R.S. §5006—that intend to solicit, accept, or obtain contributions in Maine, or that intend to have contributions solicited, accepted, or obtained on its behalf in Maine, to file an application at least 30 days before soliciting, accepting, or obtaining contributions. 9 M.R.S. § 5004.
However, an organization established for and serving bona fide religious purposes is automatically exempt from Maine’s charitable registration requirements. 9 M.R.S. § 5003(1). The religious exemption is not limited to IRS Form 990 Non-Filers such as churches.
Maine does not accept registration through the Unified Registration Statement, which is a standardized charitable registration accepted in many states.
Some states require organizations to appoint a “registered agent” in the state as part of the organization’s charitable registration. The Maine Charitable Solicitations Act does not currently have this requirement. However, as discussed below, Maine does require all profit and non-profit corporations doing business in the state to register to do business in the state and to appoint an in-state agent for the corporation.
The Maine Charitable Solicitations Act requires any person or entity soliciting charitable contributions in the state to advise all prospective donors, at the time of solicitation, of the name and physical address of the charitable organization for which the solicitation is being conducted. 9 M.R.S. § 5012.
Religious organizations generally are not required to include this statement, but posting the language is often a best practice to build trust with donors and state regulators. Below is sample language to use with charitable solicitations in this state:
This solicitation is on behalf of *ORG*, located at *PHYSICAL ADDRESS*.
All corporations (profits and non-profits) incorporated in states other than Maine that do business in Maine must register to do business in Maine. 13-B M.R.S. § 1201. This includes all out-of-state corporations that solicit charitable contributions in Maine—even those exempt from registering under the Maine Charitable Solicitations Act—except if the corporation is only soliciting contributions in Maine by mail. 13-B M.R.S. § 1201(2)(G).
An out-of-state corporation registering to do business in Maine must have a registered agent in Maine. 13-B MRS § 1212-B.
Maine Income Taxes
Maine imposes an income tax on all income obtained in the state by individuals and/or entities. However, organizations that are exempt from federal income taxation [including but not limited to those that have received federal income tax exemption under IRC Sec. 501(c)(3)] are automatically exempt from state income tax too. 36 M.R.S. § 5200(5). Note however that even when an organization is exempt, if it has unrelated business taxable income (UBTI) that is subject to federal taxation, that UBTI will be subject to Maine income tax. 36 M.R.S. § 5200(5).
It is also important to consider whether applying for sales and use tax and property tax exemption would be appropriate for your organization.
Sales and Use Tax
As of the date of this publication (March 08, 2021), Maine does not offer a blanket sales and use tax exemption for nonprofits. To qualify for sales and/or use tax exemption, an entity must fall within one of the exceptions listed in 36 M.R.S. § 1760. Many types of charitable organizations are on the list of sales and use tax exempt organizations. To request sales or use tax exemption, you must obtain and file the appropriate application for exemption with the Maine Revenue Services.
Maine law also exempts certain organizations from property taxation. 36 M.R.S. § 652. However, the real and personal property of charitable institutions incorporated in Maine and used solely by the organization for its own purposes is property tax exempt. 36 M.R.S. § 652. So if you are an out-of-state charitable entity that wants to hold real or personal property in Maine, consult with a Maine attorney about setting up a Maine subsidiary to hold the property. To request a property tax exemption, you must obtain and file the appropriate application for exemption with the tax assessor for the town where the property is located by April 1 of the year you are requesting the exemption.
This state does not have a corporate franchise tax
Foreign Nonprofit Application For Authority To Carry on Activities
Guide - Is Your Organization Eligible for Property Tax Exemption?
Details on specific sales and use tax exemptions are available from the Maine Department of Administrative and Financial Services. Information regarding property tax exemption can be obtained from the municipality or county in which the property itself is located. For an example, please see the Cumberland County’s property tax exemption webpage. An accountant or attorney can provide specific answers to other questions.
Volunteer Attorney in Maine
This resource contains general educational information related to legal concepts, but this information does not constitute legal advice. Anyone seeking legal advice is strongly encouraged to consult with a licensed attorney regarding any of the matters discussed herein. Although licensed attorneys work with Napa Legal, Napa Legal is not a law firm and does not undertake legal representation on behalf of any clients. Further, no licensed attorney working with or on behalf of Napa Legal agrees to undertake legal representation on behalf of any client unless the terms of such representation are set forth in a separate, written representation agreement.