Why There’s No Inheritance Tax in Maine
Learn about why there’s no inheritance tax in Maine and why the state turned to an estate-tax only approach to estates.
If you’re researching inheritance tax in Maine, here’s the bottom line: the state does not impose one. Instead, the state uses an estate tax—a different system that applies to an estate itself rather than to the people who receive assets.
An inheritance tax is paid by beneficiaries, often at different rates depending on their relationship to the person who has passed. An estate tax, on the other hand, is calculated on the total taxable estate before assets are distributed. Maine is among the states that skip inheritance taxes altogether and rely solely on an estate tax with a high threshold.
Maine once had an inheritance tax, but lawmakers began moving away from it in the early 1980s. In 1981, the Legislature passed legislation to transition away from the old system. For deaths after June 30, 1986, the inheritance tax was fully replaced by the Maine estate tax. Later statutory clean-up formally repealed remaining inheritance-tax provisions.
What Taxes Looks Like Today
For 2025, Maine’s estate tax exemption is $7 million. Amounts above that can be taxed at graduated rates. This threshold is separate from the federal estate tax rules and means most estates in Maine won’t owe state estate tax at all. For practical details—like brackets, filing forms (Form 706ME), and how the state computes the tax—see the state guidance.
Why Maine Has No Inheritance Tax
Three big reasons explain why the tax no longer exists:
- Simplicity and alignment. Replacing the old inheritance tax with an estate-based system aligned the state with federal mechanics of the time and simplified compliance.
- Predictability for families. A single estate-level calculation is easier to plan around than multiple beneficiary-level inheritance calculations.
- Policy choice. Many states have reconsidered inheritance taxes. Maine chose an estate-only approach with a high exemption, reducing the number of estates that owe any state transfer tax.
Key takeaways: Maine has no inheritance tax. Its estate tax applies only above a sizable threshold, and the shift dates back to reforms enacted in 1981 and fully effective for post–June 30, 1986 deaths.
(Read More: Learn about revocable trusts in Maine versus Nevada.)