If I own a condo in Maine, and rent it out, should I answer "Yes" to the question about Sales Tax on Casual Rentals of Living Quarters?

Yes, you should generally answer "yes" to the question about Sales Tax on Casual Rentals of Living Quarters on your Maine state return. According to Maine Revenue Services Sales, Fuel & Special Tax Division Instructional Bulletin No. 32, the Maine Sales and Use Tax Law imposes a tax on the rental of living quarters, including casual rentals. Since you collect $1,800 per month from your tenant, this qualifies as a taxable rental.

Here are some key points from the bulletin:

• Taxable Rentals: The law imposes a tax on the rental of living quarters in any hotel, rooming house, tourist camp, or trailer camp, including casual rentals
• Registration Requirement: Every person who owns, manages, or operates a rental property, whether in the regular course of business or on a casual basis, must register for and collect Maine sales tax on the rentals
• Exemptions: Casual rentals for fewer than 15 days each calendar year are generally exempt from sales tax. However, if the property is managed by a real estate agent or another person engaged in the business of renting or managing rentals, sales tax must be collected regardless of the rental duration - see resource here for details.