§1765 - Trade-in credit - Tax treatment for same-category trades

Sep 4, 2026

Section 1765 sets the tax rule for trade-in credits when items within the same listed category are exchanged toward the sale price of another item. Tax is imposed only on the difference between the purchased property’s sale price and the trade-in allowance. The section does not apply to dealer-to-dealer inventory exchanges. It also defines covered item categories and states that the trade-in credit requires the traded items to be in the same category.

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Trade-in credit

Tax applies only to the difference

Covered item categories

Credit requires same-category items

Section history

§1765. Trade-in credit When one or more items in one of the following categories are traded in toward the sale price of another item in that same category, the tax imposed by this Part must be levied only upon the difference between the sale price of the purchased property and the trade-in allowance of the property taken in trade. This section does not apply to transactions between dealers involving exchange of the property from inventory: [PL 2007, c. 627, §50 (AMD); PL 2007, c. 627, §96 (AFF).] 1. Motor vehicles. Motor vehicles; [PL 1987, c. 402, Pt. A, §180 (RPR).] 2. Farm tractors. [PL 1997, c. 133, §3 (RP).] 3. Watercraft. Watercraft; [PL 1989, c. 588, Pt. C, §4 (RPR).] 4. Aircraft. Aircraft; [PL 1987, c. 402, Pt. A, §180 (RPR).] 5. Lumber harvesting vehicles or loaders. [PL 1997, c. 133, §3 (RP).] 6. Chain saws. Chain saws; [PL 1987, c. 402, Pt. A, §180 (RPR).] 7. Special mobile equipment. Special mobile equipment; or [PL 2009, c. 207, §2 (AMD).] 8. Trailers and truck campers. Trailers and truck campers. [PL 2009, c. 207, §3 (AMD).] 9. Truck campers. [PL 2009, c. 207, §4 (RP).] The trade-in credit allowed by this section is not available unless the items traded are in the same category. The tax must be levied only upon the difference between the sale price of the purchased property and the trade-in allowance of the property taken in trade. [PL 2009, c. 207, §5 (AMD).] SECTION HISTORY PL 1967, c. 108 (AMD). P&SL 1969, c. 154, §G1 (REEN). PL 1969, c. 295, §1 (RP). PL 1975, c. 317, §3 (AMD). PL 1975, c. 528 (AMD). PL 1975, c. 765, §20 (RPR). PL 1977, c. 686, §4 (RPR). PL 1979, c. 541, §A222 (AMD). PL 1985, c. 519 (RPR). PL 1987, c. 49, §§3,4 (AMD). PL 1987, c. 128, §3 (AMD). PL 1987, c. 402, §A180 (RPR). PL 1987, c. 467, §§1,2 (AMD). PL 1989, c. 533, §9 (AMD). PL 1989, c. 588, §C4 (AMD). PL 1997, c. 133, §§3,4 (AMD). PL 1999, c. 518, §2 (AMD). PL 2007, c. 375, §3 (AMD). PL 2007, c. 627, §50 (AMD). PL 2007, c. 627, §96 (AFF). PL 2009, c. 207, §§2-5 (AMD). The State of Maine claims a copyright in its codified statutes. If you intend to republish this material, we require that you include the following disclaimer in your publication: All copyrights and other rights to statutory text are reserved by the State of Maine. The text included in this publication reflects changes made through the First Special Session of the 132nd Maine Legislature and is current through October 1, 2025 . The text is subject to change without notice. It is a version that has not been officially certified by the Secretary of State. Refer to the Maine Revised Statutes Annotated and supplements for certified text. The Office of the Revisor of Statutes also requests that you send us one copy of any statutory publication you may produce. Our goal is not to restrict publishing activity, but to keep track of who is publishing what, to identify any needless duplication and to preserve the State's copyright rights. PLEASE NOTE: The Revisor's Office cannot perform research for or provide legal advice or interpretation of Maine law to the public. If you need legal assistance, please contact a qualified attorney.

FAQs

How is tax calculated when trade-ins are used within the same category?

Tax applies only to the difference between the sale price of the purchased property and the trade-in allowance of the property taken in trade.

Does §1765 apply to dealer-to-dealer inventory exchanges?

No. The section does not apply to transactions between dealers involving exchange of property from inventory.

When is the trade-in credit not available?

The trade-in credit is not available unless the traded items are in the same category as the purchased property.

Sep 4, 2026

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