What do I need to know about motor vehicle excise tax?

According to the Department of Revenue, the motor vehicle excise is imposed for the privilege of registering a motor vehicle.  It is an assessment in lieu of a personal property tax, however it is billed on a calendar year, not a fiscal year like real and personal property.  The amount of the motor vehicle excise due on any particular vehicle or trailer in any registration year is calculated by multiplying the “value” of the vehicle by the motor vehicle excise tax rate.  That rate is fixed at $25.00 per thousand dollars of value.  (The $25.00 rate is the same in all 351 towns and cities in Massachusetts. It does not change like the property tax rate.).  The value of a vehicle for the purpose of determining excise is a percentage of the manufacturer’s suggested retail price for that vehicle based on the year of manufacture.  The applicable percentages are set out in MGL Ch. 60A § 1 as follows:
  • In the year preceding the year of manufacture 50% of manufacturer’s suggested retail price,
  • In the year of manufacture 90%,
  • In the second year 60%,
  • In the third year 40%,
  • In the fourth year 25%,
  • In the fifth year and succeeding years 10%.

The manufacturer’s list price for any particular vehicle is the price recommended by the manufacturer as the selling price of that vehicle new. It is the manufacturer’s list price rather than the actual purchase price that is used as the value for purposes of calculating the motor vehicle excise.

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