On April 2, 2026, the Supreme Judicial Court of Maine ruled that a liquor supplier was subject to Maine income tax and owed nearly $750,000 in state income tax, penalties, and interest for the 2011-2017 tax years.
The liquor supplier argued that it was not subject to income tax because it did not have nexus with the state and because PL 86-272 protections applied in any event. The Court rejected both arguments. It found that the taxpayer had nexus because Maine’s law applicable to liquor sales required the supplier to ship liquor to a bailment warehouse in Maine under contracts that provided the supplier retained title to the liquor until removed from the warehouse. The Court thus concluded that the taxpayer owned property at the bailment warehouse in Maine and made sales from that warehouse, sufficient to give it nexus under Maine’s income tax statute. The Court rejected the taxpayer’s PL 86-272 argument for the same reason, finding that the compelled bailment and compelled delay in transfer of title exceeded the protected activities of PL 86-272, and thus the Company was subject to income tax.
State Tax Assessor v. Fifth Generation, Inc., No. Ken‑24‑490 (Me. Apr. 2, 2026).