With few exceptions, every motor vehicle or trailer registered in Massachusetts is subject to an excise tax. The commonwealth issues registrations for either one or two years, and residents are taxed on the registration. Taxable vehicles include passenger cars, trucks and vans as well as tractors and other motorized farm or construction vehicles.
Whether a registered vehicle is exempt from the excise tax depends on who owns it. All government-owned vehicles are exempt, as well as those owned by churches or other nonprofit organizations that already maintain tax exempt status. The commonwealth also exempts vehicles that carry special license plates available to farmers and auto manufacturers or dealers.
Former prisoners of war or their surviving spouses do not pay the Massachusetts excise tax for registered vehicles they own. Vehicles owned by handicapped individuals also are exempt in certain circumstances, depending on the extent of the owner's handicap.
Vehicle Valuation and Amount of Tax
The amount of excise tax an owner owes for a specific vehicle is first calculated by determining the excise value of the vehicle. The excise value is a percentage of the manufacturer's suggested retail price for the vehicle. For example, if a car was bought and registered in the same year it was manufactured, the excise value would be 90 percent of its suggested retail price. The percentage decreases each year after manufacture according to a statutory formula.
Once the excise value is determined, multiplying that amount by the tax rate determines how much tax the owner owes that year. The excise tax rate in Massachusetts at the time of publication was $25 per $1,000 of value.
Billing and Collection
A calculated excise amount is prorated for the first year if the owner registered the car in the middle of the year. Massachusetts law sets a minimum assessment at $5, even if calculations produce a lesser amount.
The Massachusetts Registry of Motor Vehicles prepares bills and distributes them to cities and towns throughout the state for collection. The tax must be paid by the registered owner within 30 days of the bill's issue.
If a day elapses after the bill's due date and the tax remains unpaid, a local tax collector makes a demand for the tax. If the owner fails to pay the tax after 14 days, a warrant is issued for collection. After 30 days, a deputy presents the warrant to the owner in person.
Penalties for Non-Payment
Unpaid excise taxes accrue interest at a 12 percent annual rate beginning on the due date. After the bill is 14 days late, the RMV can place both the vehicle registration and the owner's driver's license in non-renewal status, meaning neither can be renewed until the excise tax bill is paid.
Massachusetts also assesses fees for the stages of the collection process for delinquent bills. The initial demand fee is $5 as of publication. Issue of a warrant is $12, notice of the warrant is another $12, and final in-hand service of the warrant is $17.
- Massachusetts Department of Revenue: Motor Vehicle & Trailer Excise Manual
- Massachusetts Department of Revenue: Frequently Asked Questions -- Motor Vehicle Excise
- Internal Revenue Service. "Publication 510, Excise Taxes." Accessed Jan. 19, 2020.
- Tax Policy Center. "What are the major federal excise taxes, and how much money do they raise?" Accessed Jan. 19, 2020.
- Internal Revenue Service. "Instructions for Form 720, Quarterly Federal Excise Tax Return," Pages 1-2. Accessed Jan. 19, 2020.
- Internal Revenue Service. "Publication 510, Excise Tax (Including Fuel Tax Credits and Refunds," Page 2. Accessed Jan. 19, 2020.
- U.S. Government. "Present Law and Background Information on Federal Excise Tax." Accessed Jan. 19, 2020.
- New York State Government, Department of Taxation and Finance. "Cigarette and Tobacco Products Tax." Accessed Jan. 19, 2020.
- Internal Revenue Service. "Retirement Topics - Exceptions to Tax on Early Distributions." Accessed Jan. 30, 2020.
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- U.S. Department of the Treasury. "My Retirement Account -- Summary of Key Roth IRA Features." Accessed Jan. 19, 2020.
Jennifer Mueller began writing and editing professionally in 1995, when she became sports editor of her university's newspaper while also writing a bi-monthly general interest column for an independent tourist publication. Mueller holds a Bachelor of Arts in political science from the University of North Carolina at Asheville and a Juris Doctor from Indiana University Maurer School of Law.