Post Content

The Commonwealth has collected more than $800 million in revenue from the sale of motor vehicles ($422 million) and the gasoline excise tax ($391.6 million) in the first eight months of FY12.

But the two sources of revenue have been trending in opposite directions: sales tax revenue from motor vehicles is up $33 million for the first eight months of FY12, while gasoline excise tax revenue is down almost $5 million in that same period.

Taxpayers are buying motor vehicles, but they are also pumping less gasoline into them.

A year ago, with cost of a gallon of gasoline approaching $4 a gallon — just as it seems to be doing today after a price fall-off that saw a gallon sell for $3.35 a gallon as recently as three months ago — conventional wisdom was that tax revenue from the gasoline excise tax would go down as the price went up.

However, the data disputed that notion; a year ago, gasoline excise tax collections were up, not down, and they finished FY11 at $581.7 million, $3.4 million more than in FY10.

In a post dated March 11, 2011, this blog noted that “Economists note that consumers react to price hikes not with quick action, but with measured, more long-term responses, especially if price spikes become permanent price hikes. Drivers may choose to purchase more fuel efficient vehicles, change to public transportation, or move closer to their workplace. There are other factors, such as household disposable income.”

A year later, in March 2012, it may well be that consumers have responded by cutting down slightly on gasoline consumption, but the fact remains they are still very much buying motor vehicles.

By the way, a year ago Massachusetts gasoline excise tax of 21-cents per gallon ranked 27th (with No.1 the highest); today, Massachusetts with the same excise tax, ranks 29th, according to the Tax Foundation.

Written By:

Recent Posts

Commute to work on the T, Commuter Rail or Turnpike? You may be eligible for a Massachusetts Commuter Deduction on your tax return! posted on Jul 16

Commute to work on the T, Commuter Rail or Turnpike?  You may be eligible for a Massachusetts Commuter Deduction on your tax return!

The Commuter Deduction was enacted by the Legislature to cover specific commuter expenses. To help understand the deduction,  the Department of Revenue’s DOR University has released an e-learning module explaining what qualifies for a deduction, real-life examples and how you can claim your commuter deduction   …Continue Reading Commute to work on the T, Commuter Rail or Turnpike? You may be eligible for a Massachusetts Commuter Deduction on your tax return!

DOR Offers FREE E-Learning Course on Fraternal Organization Tax Responsibilities posted on Jul 9

Help get the word out! The Department of Revenue’s online DOR University has recently developed a new free e-learning course on the tax responsibilities of fraternal organizations. Fraternal organizations are considered a type of Chapter 180 Corporation, which are formed for charitable or other purposes.   …Continue Reading DOR Offers FREE E-Learning Course on Fraternal Organization Tax Responsibilities

New Boat Owners: Don’t Get Landlocked This July 4th Weekend! posted on Jun 25

New Boat Owners: Don’t Get Landlocked This July 4th Weekend!

This is traditionally one of the busiest periods of the summer at DOR offices as new boat owners come in to pay sales taxes on their boats or other recreational vehicles, so   they can enjoy the holiday weekend on the water. So, want to   …Continue Reading New Boat Owners: Don’t Get Landlocked This July 4th Weekend!