Maine Redefines Taxable Digital Services to Include Digital Audiovisual and Audio Content

As part of House Paper 132 (HP 132), signed by the Governor on June 20, 2025, the Maine Legislature clarifies and expands the sales and use tax laws to include digital audiovisual and digital services. The legislation introduces the following definitions:

• Digital Audiovisual Works: Defined as an electronically transferred series of related images intended to be shown with sound, such as movies, TV shows, or live-streamed video.
• Digital Audio Works: Defined as sound recordings transferred electronically, including music, readings of books, or podcasts.
• Access and Use: The law now clearly includes charges for accessing or using these digital works, whether via streaming or downloads.

Effective January 1, 2026, Maine will officially begin taxing digital audiovisual and audio services for personal consumption, subscriptions, or fees to access these services and transfers of rights to use these services, even if no permanent download occurs. This means things such as Netflix, Hulu, Spotify, Apple Music, and even audiobook and podcast subscriptions, among others, will now be taxable in Maine.

This change is in response to the decline in DVD or CD purchases and the increase of online entertainment. Maine wants to expand its tax base by including these digital services and ensure its laws reflect how media is consumed today. Maine’s new law is a significant compliance consideration for businesses operating in the digital contact space.(Committee Amendment “A” to H.P. 132, L.D. 210, Maine Legislature, signed June 20, 2025)