How to Start a Contracting Business in Maine

First, understand what Maine does and does not regulate

Most states open with a licence application. Maine does not have one for you. The Office of the Attorney General states on its consumer page that "In Maine, general contractors - and trades such as roofing and framing - are not licensed or regulated." There is no state contractor number to apply for, no state exam to sit, no experience ladder to climb, and no state body that will suspend you. If you are building decks, framing, roofing, siding, remodelling kitchens or running a general remodelling company, you can legally take your first job the day you have a customer.

That is not the same as saying Maine has no rules. It has moved its consumer protection into contract law instead of licensure, and that law is strict, specific and enforceable. The Attorney General also names the trades Maine does licence: plumbers and electricians, who are "licensed by the State of Maine and can be subject to disciplinary action", and site evaluators, who design septic systems and are licensed by the Department of Health and Human Services. The Maine Fuel Board separately licenses oil, solid fuel, propane and natural gas technicians. If your work touches any of those, the "no licence needed" answer stops applying to that part of the job.

You should also know what nearly happened, because a lot of published advice about Maine is currently wrong about it. LD 1226, "An Act to Protect Consumers by Licensing Residential Building Contractors", would have established a Residential Construction Board inside the Department of Professional and Financial Regulation and required a licence, "beginning January 1, 2027", for residential construction "With a contract price that exceeds $15,000" or "That involves 2 or more professionals licensed under this Title". It was reported out of the Housing and Economic Development Committee on May 29, 2025 on a divided Ought To Pass As Amended report with two competing amendments, and the Legislature's own record shows its final disposition as "Died On Adjournment, Apr 29, 2026". It is not law. No part of it is in force, and no licence is scheduled.

• General contracting, roofing, framing, remodelling, painting, siding: no Maine state licence.
• Plumbing and electrical work: licensed by the Office of Professional and Occupational Regulation.
• Oil, solid fuel, propane and natural gas work: licensed by the Maine Fuel Board.
• Septic system design: DHHS-licensed site evaluator. Installation is not a licensed trade.
• LD 1226, the statewide residential licensing bill: died on adjournment April 29, 2026.

Official sources: Maine Attorney General: Home Construction and Repair; Maine Fuel Board; Maine CDC Subsurface Wastewater Unit; Maine Legislature: LD 1226 Text and Status, 132nd Legislature; Maine Legislature: LD 1226 bill text as introduced

Set up the business entity, and know which filing goes where

Maine splits business registration between the Secretary of State and your own town clerk, and which one you use depends on the entity you pick. The Secretary of State lists the entities that file with the state as business corporations, nonprofit corporations, limited liability companies, limited partnerships and limited liability partnerships. Sole proprietorships and general partnerships are not filed with the Secretary of State at all.

If you form an LLC, the Certificate of Formation is form MLLC-6 and the filing fee published on the Secretary of State's own LLC forms page is $175.00. That page also warns that "Corporate filings processing time is 40 - 55 business days", which is long enough to matter if you were planning to open a business bank account next week. A name reservation on form MLLC-1 is $20.00, and a foreign LLC qualifying to do business in Maine files form MLLC-12 at $250.00. Check the name first against the Secretary of State's corporate name search before you print anything.

If you stay a sole proprietor and want to trade under a name other than your own, that filing is municipal, not state. Maine law, cited by the Secretary of State as Title 31, chapter 1, section 2, requires that a sole proprietor adopting "any business name, style or designation other than his own name exclusively" must, "before commencing business, deposit in the office of the clerk of the city or town in which such business is to be carried on a certificate". That is your town clerk. We do not state a fee for it, because no statewide fee schedule is published; ask your clerk.

Whichever entity you choose, the annual report is the deadline that catches people. The Secretary of State states that "The legal filing deadline is June 1st", that first reports are due "between January 1st and June 1st of the year following the calendar year in which the entity was incorporated, formed or qualified", and that the fee is $85 for a domestic business entity and $150 for a foreign one. Miss it and "there will be a late filing penalty assessed", with non-payment leading to administrative dissolution or revocation of your entity.

Official sources: Maine Secretary of State: Types of Businesses; Maine Secretary of State: Limited Liability Company Forms; Maine Secretary of State: Trade Name Protection; Maine Secretary of State: Corporate Name Search; Maine Secretary of State: Filing Requirement Reminders

Get the contract right, because in Maine the contract is the regulation

This is the section that replaces the licence, and it is where new Maine contractors get hurt. The Attorney General states that Maine law requires "a written contract between a contractor and homeowner or lessee for any home construction or repair work that costs more than $3,000". The definitions in 10 M.R.S. section 1486 are broad on purpose: a home construction contract is "a contract to build, remodel or repair a residence, including not only structural work but also electrical, plumbing and heating work; carpeting; window replacements; and other nonstructural work", and a residence is "a dwelling with 3 or fewer living units and garages, if any". Commercial and business buildings are outside the chapter.

Section 1487 then lists what has to be in that contract, and there are fourteen items. The names, addresses and phone numbers of both parties. The address where the work will happen. Estimated start and substantial completion dates. The total contract price or a cost-plus formula with estimated labour and materials. The method of payment, "with the initial down payment being limited to no more than 1/3 of the total contract price". A general description of the work and materials. The statutory warranty on faulty materials, code compliance, skilful construction and habitability. A dispute-resolution option, binding arbitration, nonbinding arbitration or mediation. A change-order clause. Door-to-door sales and insulation disclosures where they apply, an energy efficiency standards statement, the Attorney General's consumer information, and the Attorney General's website and phone number.

The deposit rule deserves its own line because it is easy to break by accident. Section 1486 defines a down payment as "all payments to a home construction contractor prior to or contemporaneous with the execution of the home construction contract". Money the customer hands you before signing counts toward the same one-third ceiling as the deposit written into the contract. If you need more than a third up front to fund materials, restructure the payment schedule so the later draws carry it, not the deposit.

Change orders are separate and equally strict. Section 1488 requires that each one "must be in writing and becomes a part of and is in conformance with the existing contract", must detail all changes that result in a revision of the price, must state "The previous contract price" and "the revised price", and must be signed by both parties. Verbal upsells on a Maine job site are not enforceable change orders. Section 1489 does allow the parties to opt out of the chapter, but only if "the contractor specifically informs the homeowner or lessee of the homeowner's or lessee's rights under this chapter" first and the parties then mutually agree. Treat that as a lawyer's tool, not a shortcut.

Official sources: Maine Attorney General: Home Construction and Repair; Maine Attorney General: Home Construction Contracts; 10 M.R.S. section 1486 (definitions); 10 M.R.S. section 1487 (home construction contracts); 10 M.R.S. section 1488 (change orders); 10 M.R.S. section 1489 (exemption from chapter)

Register with Maine Revenue Services, then learn who actually pays the sales tax

Maine Revenue Services registers new businesses through the Maine Tax Portal, and its FAQ states that a business making "regular sales of tangible personal property or taxable services" must register for a sales tax account. Maine's general sales and use tax rate is 5.5 percent, and the service provider tax is 6 percent. Filing frequency is set by your liability: "Generally, every retailer with an average tax liability of $600 or more per month must file a monthly tax return", with quarterly, semi-annual and annual options below that. Returns "are due no later than the 15th of the month" following the reporting period.

The part that surprises contractors moving in from other states is who bears the tax. Maine Revenue Services Instructional Bulletin No. 4, "Contractors and Subcontractors", last revised July 22, 2024, sets the default rule: "When performing a construction contract, a contractor is purchasing materials and incorporating those materials into real property. Title to the materials passes to the contractor's customer after they are incorporated into real property. The contractor, as the last user of the materials as tangible personal property, pays a sales or use tax when purchasing the materials." Its worked example is a carpenter building a house who "pays tax on its purchase of the materials and does not add sales tax to the lump-sum charge to the customer". Price your bids accordingly: the tax is a cost line, not a pass-through.

There is a real alternative, and it is a business decision rather than a loophole. Section 2 of the same bulletin allows title to pass before installation, and says that "the contractor's business practice of invoicing all customers for time, materials, and sales tax, is sufficient evidence to support the intent that title passes to the customer before affixing the materials to real property". A plumber who registers with MRS as a retailer, buys materials tax-free on a resale certificate, and bills customers for materials plus sales tax is operating that way legitimately. Pick one model and run it consistently, because the bulletin ties the treatment to your actual invoicing practice.

Two more rules from the bulletin are worth knowing on day one. Everything you buy for your own use, "Trucks, tractors, scaffolding, machinery and equipment, tools and supplies such as pipe cutters, trowels, wrenches, oxygen, acetylene, acid and thread-cutting oil, and fuels used in the performance of construction contracts", is taxable, and stays taxable "even though the equipment and supplies are used in connection with a contract with an exempt organization". And work for a tax-exempt organisation can be materials-exempt under 36 M.R.S. section 1760(61) using form ST-A-119, but that exemption "only applies to lumber, hardware, doors, windows, nails, insulation, and other building materials that are permanently affixed to real property".

Official sources: Maine Revenue Services: Sales, Use and Service Provider Tax; Maine Revenue Services: Sales, Use and Service Provider Tax FAQ; Maine Revenue Services: Sales and Use Tax Rates and Due Dates; Maine Revenue Services Instructional Bulletin No. 4: Contractors and Subcontractors

Workers' compensation: the trigger is hiring, and the independent-contractor test is not a coin flip

39-A M.R.S. section 401 states that "Every private employer, including an independent contractor who hires and pays employees, is subject to this Act", and requires that employer either to purchase workers' compensation insurance or to self-insure. Note the phrasing: being an independent contractor yourself does not put you outside the Act once you hire and pay someone. The statute's narrow exemptions cover domestic service and certain seasonal agricultural and aquacultural labour, not construction.

The question that decides most disputes is whether the person swinging the hammer is your employee or a genuine independent contractor, and Maine answers it with a checklist rather than a judgement call. Under 39-A M.R.S. section 102(13-A), as the Workers' Compensation Board explains it, the person must be "free from the essential direction and control of the employing unit, both under the person's contract of service and in fact", must satisfy all five criteria in the first group, and must satisfy at least three of the seven in the second group.

The first group is the demanding one: the essential right to control the means and progress of the work except as to final results, being customarily engaged in an independently established trade or business, having the opportunity for profit and loss, hiring and paying and supervising assistants, and making services available to the client or customer community. The second group includes substantive investment in facilities and tools, not being required to work exclusively for you, contractual liability for satisfactory completion, a written contract defining the relationship and termination rights, payment based on factors other than time alone, work outside your usual course of business, and an IRS determination. The Board also notes that predeterminations issued before October 25, 2023 remain valid for one year and that the old forms are no longer accepted.

Get this wrong and you have an uninsured employee, not a paperwork problem. Decide which of your crew is which before the first day of work, keep the written agreements, and if the answer is genuinely unclear, use the Board's Independent Contractor Statement process rather than guessing.

Official sources: 39-A M.R.S. section 401 (security for compensation); Maine Workers' Compensation Board: Independent Contractor FAQ

Finish at the town office, then keep the machine running

Maine.gov states directly that "Construction permits and inspections, including electrical and plumbing, are managed at the town level in Maine". Your municipality is where the permits, the code enforcement officer and, if you are a sole proprietor with a trade name, your assumed-name certificate all live. The state portal also points at Business Answers, an online Business Licensing Assistant that "will lead you through a series of questions about the type of business you are trying to start, and provide a list of licenses, permits or qualifications you need", plus a searchable directory of permits by keyword, category or agency.

The building code applies whether or not your town enforces it, and that catches people working in small municipalities. Maine's Division of Building Codes and Standards, now in the Office of Community Affairs, states that "All municipalities with a population greater than 4,000 are required, by statute, to enforce the MUBEC" while municipalities under 4,000 may choose to, and then adds the sentence that matters for liability: "compliance with the MUBEC is mandatory and the responsibility of the owner, regardless of whether a building is located in a municipality that enforces the MUBEC." No inspector at the door is not the same as no standard to meet, particularly when your own statutory warranty under section 1487 promises code compliance.

Once you hire, add the Department of Labor to your list. Maine employers register for unemployment insurance through the ReEmployME system or the Employer Registration Form, and the Department states that an employer pays unemployment tax "on the first $12,000 only in gross wages an employer pays to an individual in a calendar year", reporting on the UC-1 Quarterly Unemployment Contributions Report. We do not print the quarterly due dates here because the employer page does not publish them; get them from the portal or the form itself before your first quarter closes.

Then keep a calendar. In an average Maine year a small contracting company owes an annual report by June 1, sales and use tax returns on the 15th at whatever frequency Maine Revenue Services assigned you, quarterly unemployment reports once you have staff, and renewals for any trade licence you hold. None of those are hard individually. They are simply easy to lose track of when you are on a roof.

Official sources: Maine.gov: Starting a Business in Maine; Maine Office of Community Affairs: Division of Building Codes and Standards; Maine Department of Labor: Unemployment Insurance for Employers; Maine Secretary of State: Filing Requirement Reminders; Maine Revenue Services: Sales and Use Tax Rates and Due Dates

Check the official page yourself before you file or sign

Maine spreads contractor rules across at least six places: the Attorney General for the home construction contract rules, the Secretary of State for the entity, Maine Revenue Services for sales and use tax, the Office of Professional and Occupational Regulation for the licensed trades, the Workers' Compensation Board for coverage, and your own town clerk and code office for assumed names and permits. No single page carries all of it.

The licensing landscape is also genuinely unsettled. LD 1226 got as far as a divided committee report before it died on adjournment on April 29, 2026, and a bill that nearly passed once tends to come back. Before you sign a contract or file anything, open the specific official page for your question, confirm the figure, and keep a dated copy of what you read. Maine.gov states that "Construction permits and inspections, including electrical and plumbing, are managed at the town level in Maine", so your town office is the last call, not the first thing to skip.

Official sources: Maine Legislature: LD 1226 Text and Status, 132nd Legislature; Maine.gov: Starting a Business in Maine