Maine will begin taxing streaming subscriptions for the first time on January 1, 2026, with implementation now just days away. The change—created in the state’s 2025 supplemental budget—applies Maine’s 5.5% sales and use tax to “digital audiovisual services” and “digital audio services,” impacting subscription access to streaming video, music, podcasts, audiobooks, and other electronically delivered media.

The update is implemented through P.L. 2025, c. 388, Part G (LD 2214), which repeals Maine’s Service Provider Tax and moves certain services—including streaming—into the Sales and Use Tax framework. Lawmakers also added new definitions to 36 M.R.S. §1752, explicitly classifying digital audiovisual works and streamed content as taxable for the first time.

Under the new rule, providers must collect the state’s 5.5% tax on charges for services such as Netflix, Hulu, Disney+, Spotify, Apple Music, audiobook subscriptions, and other digital media platforms. Maine does not impose local sales taxes, so the uplift is a flat 5.5% statewide.

This marks a significant shift: streaming subscriptions were not previously subject to Maine’s sales tax.

Important Clarifications for Subscription Operators

Not a tax on SaaS or most B2B services
The new definitions apply specifically to digital audiovisual and audio works delivered electronically. They do not apply to:

• SaaS or cloud software
• Productivity tools
• B2B workflow or enterprise platforms
• Cybersecurity or infrastructure services
• Professional services delivered digitally

These categories remain non-taxable under Maine law unless combined with taxable digital media.

What about digital courses?
Most educational digital products remain non-taxable, including:

• Text-based courses
• Workbooks, PDFs, e-books
• Interactive courses or LMS-based instruction
• Coaching and instructional services

However, pure video-based course libraries delivered as on-demand streaming could fall into a gray area if they are functionally equivalent to digital audiovisual works.

Current industry practice treats educational digital courses as instructional services, not taxable streaming media.

B2B media subscriptions
Most B2B media products—including news, research, data, reports, and information services—remain outside the taxable category, unless the offering includes significant on-demand video libraries that meet the definition of digital audiovisual works.

Providers offering mixed bundles (reports + video content) may need to allocate charges between taxable and non-taxable components.

As always, we recommend consulting your tax and legal advisors to determine how Maine’s updated rules apply to your specific products—particularly if you offer mixed bundles, digital courses, or services that do not clearly fall into the taxable “digital audiovisual” category.

Operational Changes for Streaming Providers

Billing & tax configuration
Providers must update tax engines to apply Maine’s 5.5% rate to the relevant digital audiovisual/audio SKUs effective January 1, 2026. Bundles that combine taxable (streaming) and non-taxable components require allocation to avoid over-collection.

Marketplace seller-of-record rules
The new tax applies whether subscribers purchase directly or via marketplaces (Apple, Google, Roku, Amazon Channels).

Collection responsibility depends on who is the seller of record; smaller platforms may not universally collect in every state. Providers should confirm marketplace obligations well before 2026.

Economic nexus threshold
Out-of-state providers must collect Maine sales tax once they meet the state’s economic nexus threshold:

• $100,000 in sales into Maine or
• 200 separate transactions into Maine
  (in the current or previous calendar year)

Providers below the threshold do not need to register but Maine customers technically owe use tax.

Invoices and customer notices
Maine Revenue Services requires invoices to either show the tax as a separate line item or state that the total price includes Maine sales tax. Providers may want to issue subscriber notices in late 2025 to reduce bill shock.

Refunds and proration
Taxability is determined by the original transaction date, not the refund date. Billing systems need to handle proration and refunds accordingly.

Digital Taxation Trends

Maine joins a growing list of jurisdictions broadening taxes on streaming and digital media:

• Pennsylvania taxes streamed digital products at 6%.

• Washington State taxes streamed digital products and digital automated services.

• Chicago applies a 10.25% “amusement tax” to electronically delivered amusements.

With declining cable/franchise-fee revenues and shifting media consumption, digital access charges remain an attractive category for state lawmakers. Maine’s update may foreshadow similar proposals in other states in 2026 and 2027.

INSIDER TAKE

This is more than a single-state change. Maine’s move reflects a wider shift as states modernize sales tax codes around digital consumption. For streaming providers, the implications reach beyond Maine: this change adds new compliance requirements, requires updated catalog taxability, and increases the risk that other states will target streaming access next. Subscription operators should prepare for a more fragmented digital tax landscape and begin reviewing their catalog, bundles, marketplace arrangements, and nexus exposure now.