Whether your car’s a clunker or an optimally engineered driving machine, it’s subject to the annual Motor Vehicle Excise Tax collected by the assessor’s office in your city or town.
Trailers and some other types of vehicles are also subject to the tax. Like a property tax, which pays for services in the city or town in which the property is located, revenue from the Motor Vehicle Excise Tax is used by Massachusetts municipalities to provide public services.
Are There Exemptions to the Excise Tax?
Exemptions may be made if the motor vehicle belongs to:
- The Commonwealth or any of its political subdivisions;
- An entity who leases motor vehicles as a business (if the business leases the motor vehicle for a full calendar year to a charitable organization, other than a degree-granting/diploma-awarding institution)
- Former prisoners of war or their surviving spouses, but only if the community has adopted a local option statute
- Charitable or religious organizations whose personal property is exempt
- Farmers, car dealers, or manufacturers who own or control vehicles with dealer plates or other special plates
- Veterans with a wartime service-related disability as determined by the U.S. Department of Veterans Affairs
- Non-veterans who have lost or lost the permanent use of both legs, both arms, or their sight in both eyes
How Is the Rate Calculated and When Is It Due?
- Since 1981, the Massachusetts Registry of Motor Vehicles (RMV) calculates the value of vehicles for the excise tax at a rate of $25 per $1,000 based on the value of the vehicle according to a depreciation schedule.
- Payment is due within 30 days from the day the excise tax bill was issued (not mailed). Check your municipality’s website to see if an online payment option is available.
What Are the Penalties for Nonpayment?
- After 30 days, nonpayment of the excise tax incurs an annual 12 percent interest rate on the total due until the bill is paid, plus additional fees.
- The RMV can decline to renew a vehicle owner’s license and registration for outstanding balances exceeding 30 days.
Are Motor Vehicle Excise Tax Abatements Available?
Abatements are available under certain circumstances, including the following:
- The motor vehicle was sold, and its registration was cancelled.
- The owner moved to another state and has proof of the vehicle’s registration in that state.
- The vehicle was overvalued.
- The vehicle was registered twice in Massachusetts in the same year.
- The vehicle has been stolen, and the incident has been reported to the police within 48 hours of the discovery of the theft.
Applications for abatement must be received within three years after the date the excise tax was due or one year after the excise tax was paid, whichever is later. If the application is denied, you can appeal to the Office for Administration and Finance’s Appellate Tax Board.
Have a question that wasn’t answered in this post? Check out the Massachusetts Department of Revenue’s (DOR) Motor Vehicle & Trailer Excise Manual.
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