Posted By: Mary Alice Scott Advocacy + Government, Financial Management,

A crowd of advocates on the staircase in the Augusta State House Hall of FlagsToday, April 22nd, Governor Mills signed a bill which includes a huge win for thousands of nonprofits across Maine.

The supplemental budget (LD 2214) contains many initiatives and spending priorities, but MANP is particularly thrilled that the blanket sales tax exemption for 501(c)(3) nonprofits was included in the bill that was signed by the Governor.

Hundreds of nonprofit organizations raised their voices to express the need for this legislation, which will fix the very confusing and arbitrary set of current exemptions. 

We are so grateful to the organizations who took the time to work on this issue, from the 250+ organizations who signed onto MANP’s letter of support, to the dozen organizations who exhibited and discussed this issue during Nonprofit Day at the State House, to the many organizations who reached out to their legislators, and to our partners at Cultural Alliance of Maine and Maine Land Trust Network who helped to activate their members. 

It was critical that legislators heard from nonprofits in their communities who would benefit from this policy – and they heard you!

What It Means

According to Maine Revenue Services, this policy could benefit more than 5,000 501(c)(3) nonprofits across Maine, and when fully enacted, will mean that nonprofits across the state will be able to retain as much as $10 million dollars every year that will be directed toward supporting their missions.

Because of this policy, every 501(c)(3) in Maine will soon be eligible for sales tax exemption on their purchases, as long as the items (or services) being purchased are to be used primarily for work supporting your mission.

What's Next

The blanket sales tax exemption for nonprofits will take effect on January 1, 2025. (Other parts of the budget may take effect at different times, the default being 90 days after the legislature adjourns. The blanket sales tax exemption was specifically written to take effect in the next calendar year.)

Please note that sales tax exemption is not an automated process that happens at the point of sale. Most retailers will require that you provide a sales tax exemption certificate provided by the State, and some retailers will require you to fill out additional paperwork.

You can apply for and obtain the sales tax exemption certificate via this website (once it is updated for the January 1, 2025 effective date).

MANP will plan for additional education on the issue as implementation nears.

Thank Your Legislators

If you or your organization connected with legislators about this issue, or is represented by any of the following individuals, please email them to thank them for supporting the blanket sales tax exemption for 501(c)(3) organizations. If you need a refresher of who your legislators are, click here.

While LD 2214 passed mostly along party lines, the provision pertaining to blanket sales tax for 501(c)(3) nonprofits was supported unanimously by both parties in the Appropriations and Financial Affairs Committee, and received bipartisan support in the Taxation Committee.

Many thanks to Governor Mills for including this change in the supplemental budget, and to the legislators who were our champions on this issue, especially Rep. Melanie Sachs, Chair of Appropriations and Financial Affairs, Sen. Nicole Grohoski and Rep. Joe Perry, Chairs of Taxation, and Rep. Micky Carmichael, also on the Taxation Committee.

Appropriations and Financial Affairs Committee Members
Taxation Committee Members

*Rep. Sachs brought forward LD68 in 2023, which resulted in the Maine Revenue Services study on the blanket sales tax exemption. This massive policy victory for Maine nonprofits simply would not have been possible without that study, and without the champion support of Rep. Sachs.

**Special thanks to Rep. Perry and Rep. Carmichael for submitting this op/ed in support of the blanket sales tax exemption to the Bangor Daily News.