Since Governor Mills took office in 2019, Augusta Democrats have raised, expanded or created taxes and fees 32 times. Even though Mills pledged not to raise taxes before her election in 2018 and re-election in 2022, she signed several budgets which did just that. See the Mills Tax Tracker for legislative sources, effective dates, and revenue projections.
Every Working Mainer: The Paid Family and Medical Leave Tax
The broadest increase on this list might be the one that gets the least attention. On January 1, 2025, Maine’s new Paid Family and Medical Leave (PFML) program began collecting a 1% payroll tax on wages up to the Social Security wage base ($176,100 in 2025).
The program applies to all private and public employers in Maine, regardless of size. For employers with 15 or more employees, the cost is split evenly: 0.5% from the worker and 0.5% from the employer. For employers with fewer than 15 employees, the employer contributes nothing out of pocket but must collect and remit the full 0.5% employee share (which may be deducted from wages). A worker earning $50,000 a year pays $250 from their own wages. Their employer, if it has 15 or more staff, pays another $250.
The program began collecting in January 2025; benefits did not become available until May 1, 2026, meaning workers paid into the fund for 16 months before a single benefit was disbursed.
Consumers: Streaming Services, Software, and Cannabis
Three consumer tax changes hitting many Maine households on a monthly basis:
Streaming services. Effective January 1, 2026, digital audiovisual and digital audio services, including Netflix, Hulu, Spotify, and podcasts, are subject to Maine’s 5.5% sales tax. They were previously untaxed. Governor Mills proposed this tax multiple times before it finally passed as part of the FY2026-27 biennial budget.
Software. Beginning January 2025, Maine expressly taxes the sale, lease, or license of canned software and electronically transferred products as tangible personal property, sweeping software subscriptions into the 5.5% sales tax. This applies to individuals and businesses.
Cannabis. Augusta hiked the tax on adult-use cannabis sales from 10% to 14% this year, a 40% increase. The state projects roughly $5 million in additional revenue over the biennium.
Lower-Income Mainers: The Tobacco Tax
Effective this year, Augusta Democrats spiked Maine’s cigarette tax from $2.00 per pack to $3.50 per pack, a 75% increase and the first hike in 20 years. Smokeless tobacco increased from $2.02 per ounce to $3.54 per ounce. Vapes, pouches, and other nicotine products went from 43% of wholesale to 75% of wholesale price. While Mills initially put forward a $1.00 per pack increase, she signed a budget with a $1.50 per pack increase.
The tobacco tax is regressive, meaning it falls much harder on low-income households. The state projects it will garner roughly $111 million in new revenue over the biennium, about $77 million of that from cigarettes alone. These numbers deserve scrutiny.
A real-world comparison is available next door. After Massachusetts banned menthol cigarettes in 2020, sales dropped 24% while in New Hampshire, cigarette sales increased 22%; sales in Rhode Island rose 18%.
Maine was already losing about $7 million per year to cigarette smuggling and cross-border purchases. A 75% tobacco tax increase will not help that dynamic.
The “Millionaire Tax” and Its Pass-Through Workaround
The 2026 supplemental budget created a new 2% surcharge on income above $1 million for single and head-of-household filers, $1.5 million for joint filers and surviving spouses, and $750,000 for married filing separately, taking Maine’s top marginal income tax rate from 7.15% to 9.15%, retroactive to January 1, 2026. The surcharge is projected to raise roughly $95 million per year from about 2,600 filers. Governor Mills had opposed income tax increases for years before accepting this one as part of a budget that also funded a fourth round of one-time $300 checks.
Less discussed: owners of businesses organized as S-corps or partnerships can elect Maine’s Pass-Through Entity Tax (PTET). Under the PTET, the business pays Maine income tax at the 7.15% top rate, the 2% surcharge is not applied at the entity level, and owners receive a credit for 90% of the tax the entity pays, plus a federal deduction the SALT cap would otherwise limit.
The practical effect: a salaried worker earning $1.5 million pays the full 9.15% on income above the threshold, with no equivalent election available. A business owner with the same income who routes it through a pass-through entity is taxed at the entity level at 7.15%. Maine Revenue Services has signaled that resident owners can still owe the surcharge on income above the threshold, so the election does not always erase it, but it gives pass-through owners a lever to reduce or, depending on their structure, avoid a surcharge that wage earners cannot touch.
The result is uneven. The “millionaire tax” lands fully on W-2 high earners, investors, and professionals without a pass-through structure, while business owners who can elect the PTET may soften or sidestep it. In contrast, the workers paying the PFML payroll tax and other consumer taxes have no escape hatch.
Property Owners and Home Sellers
Mills and Democrats nearly tripled the real estate transfer tax rate on the portion of a home sale above $1 million, from $2.20 to $6.00 per $500, effective November 1, 2025. More than 1,000 Maine homes sold for $1 million or more in 2024.
As prices continue to rise, this threshold will capture a growing share of transactions. Thirty percent of the new revenue is routed to the Maine State Housing Authority, which leverages public funds to promote low-income housing projects.
Maine’s Outdoor Community, Gun Owners, and Tradespeople
Hunting and fishing license fees rose $5 to $19 across the board in the FY2026-27 biennial budget. The resident combination hunting and fishing license went from $43 to $48. The resident fishing license went from $25 to $30. The nonresident combination license went from $150 to $169.
Concealed carry permit fees rose as much as 75%: new applications from $35 to $50, renewals from $20 to $35.
The arborist license fee more than doubled, from $75 to $180.
The paint stewardship fee tripled, from $0.25 to $0.75 per gallon, another cost passed on to consumers.
Hospitals and Healthcare
The hospital tax rate increased 46%, from 2.23% to 3.25% of net operating revenue, effective January 1, 2025. The additional collections total roughly $29.5 million in 2025.
The base year used to calculate the tax has also been updated in every biennial budget under Mills, a mechanism that effectively increases the tax each cycle by capturing higher hospital revenues.
The Fiscal Picture
Maine still ranks 5th most taxed state in America, with 10% of personal income going to state and local taxes. But even these tax and fee increases did not prevent Augusta from also spending at a pace that outstripped them. State spending has grown from roughly $7 billion in 2018 to $12 billion today, a 65% increase.
On a per-person basis, the burden on Maine taxpayers over the two-year budget has climbed from $5,390 per Mainer in 2018-19 to $8,482 today, a 57% jump in the cost of state government since Governor Mills took office.
The Complete List
The items covered in this piece represent the increases with the broadest household impact. The complete list of all 32 tax and fee changes with legislative sources, effective dates, revenue projections, and filters by category is available in the interactive Mills Tax Tracker.