Maine lawmakers are poised to support a bill expanding the state’s sales tax exemption for the sale and delivery of residential electricity.
Originating as a proposal to establish a refundable tax credit worth as much as $600, LD 2078 has since been amended to a more straightforward expansion of the existing structure.
Under current state law, the first 750 kilowatt hours of electricity are exempt from sales tax, as well as “off-peak residential electricity used for space heating or water heating.” Any electricity consumed by customers enrolled in low-income assistance programs is also exempted from sales tax.
The sponsors amendment offered by Rep. Kilton Webb (D-Durham) seeks to eliminate these qualifying categories, allowing the sale and delivery of all residential electricity across the board to be exempted from sales tax.
[RELATED: Maine Lawmakers Consider Refundable Electricity Cost Fairness Tax Credit Worth Up To $600]
According to an Axios report from this past summer, Mainers saw the highest year-over-year increase in electricity costs nationwide between 2024 and 2025.
In just one year, from May 2024 to May 2025, Maine’s average residential energy costs increased by a staggering 36.3 percent.
Nationwide, there was an increase of just 6.5 percent during this same period.
[RELATED: Maine Has Highest 2024-2025 Energy Cost Increase With Staggering 36% Hike]
Following a February 10 work session, members of the Taxation Committee voted unanimously in support of an amended version of LD 2078, but they have not yet reported out their official recommendation to the Legislature.
Consequently, the final amended text of the proposed legislation is also not yet publicly available online for review.
During the work session, it was revealed that the loss of sales tax revenue from expanding this exemption could potentially total around $6 million annually based on recent estimates. An official fiscal note has not yet been published for the bill.
Although the original sponsor’s amendment proposed making the expanded exemption effective as of January 1, 2027, Sen. Bruce Bickford (R-Androscoggin) moved to push this up to July 1 of this year.
Sen. Bickford’s amendment also added an emergency clause to the bill, meaning that this change will not be subject to the usual waiting period of 90 days following the Legislature’s adjournment for the session.
Emergency measures do require support from at least two-thirds of lawmakers in both chambers in order to pass — a higher bar than the simple majority needed for most legislation — but given the Taxation Committee’s apparent posture of unanimous support, LD 2078 will likely be able to clear this hurdle.
