Lana Oconnell
In Massachusetts, all motor vehicle owners must pay an excise tax, which is due 30 days after it is issued. The tax is based on the value of the vehicle, with a rate of $25 per thousand dollars of the car's value. This value is calculated using the manufacturer's list price and the age of the vehicle. Leased vehicles are also subject to the excise tax, with the obligation for payment determined by the leasing contract. If a vehicle owner moves out of Massachusetts, they are still required to pay the excise tax, but it may be prorated based on the number of months the vehicle was registered in the state. Students who own or lease a vehicle in Massachusetts would therefore be subject to the same excise tax requirements as any other vehicle owner in the state.
| Characteristics | Values |
|---|---|
| Who has to pay excise tax? | All owners of motor vehicles |
| What factors determine the amount of tax? | The manufacturer's list price and the age of the motor vehicle |
| How is the tax calculated? | $25 per thousand dollars of the car's value |
| When is the tax due? | 30 days from the day it's issued |
| How often is the tax paid? | Annually |
| What happens if the registration extends over to a second month? | It would be subject to two months of tax |
| What happens if the owner moves out of Massachusetts? | They still have to pay the tax |
| What happens if the owner moves within Massachusetts? | They must pay the tax to the new community |
| What happens if the owner does not pay the tax? | Unpaid excises can impact driver's license registrations and renewals |
| How can the owner pay the tax? | By credit card, debit card, check, money order, or pay-by-phone |
| Where can the owner pay the tax? | City Hall Square - Collector's Office Mezzanine Level, Window 10, 11, 12 Boston, MA 02201 |
| What is the office hour? | Monday through Friday, 9 a.m. - 5 p.m. |
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What You'll Learn
Leased cars and excise tax liability
In Massachusetts, leased cars are subject to excise tax liability. However, the terms of the original leasing contract determine who is responsible for paying the excise tax bill. Typically, if the car is registered under the driver's name, the driver is responsible for paying the excise tax, not the leasing company. However, even if the car is registered under the leasing company's name, the contract may include clauses that pass on any taxes, including excise taxes, to the driver. Therefore, it is essential to carefully review the leasing contract to understand the excise tax liability.
The excise tax is calculated based on the vehicle's valuation, which is determined by the manufacturer's list price and the age of the motor vehicle. The tax rate is $25 per $1,000 of valuation, and the minimum motor vehicle excise tax is $5. The excise tax is billed by the community where the vehicle is usually garaged, and the revenues are directed to the local community treasury.
If a leased vehicle is sold or traded, the seller must cancel the registration in Massachusetts and obtain a "'lost plate receipt' from the Registry of Motor Vehicles to avoid issues with the excise tax abatement application. The seller must then return the plates, get a return plate receipt, and file an application for abatement along with the return plate receipt and the bill of sale with the Board of Assessors. The bill will be adjusted based on the portion of the year that the vehicle was owned by the seller.
It is important to note that the excise tax abatement application process does not stop the collection of excise taxes. Even if the application is granted, the tax must be paid in full, and the abatement will be applied afterward. The assessors have three months to review and decide on the abatement application, and this period can be extended with the consent of the applicant.
In summary, leased cars in Massachusetts are subject to excise tax, and the liability for payment typically falls on the driver. The excise tax is calculated based on the vehicle's valuation and billed by the community where the vehicle is garaged. In the event of selling or trading a leased vehicle, it is necessary to follow the proper procedures to cancel the registration and apply for an excise tax abatement, if applicable.
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How to pay motor vehicle excise tax
In Massachusetts, residents who own and register a motor vehicle must pay a motor vehicle excise tax each year. This tax is based on the value of the vehicle, with a rate of $25 per $1,000 of valuation. The tax is levied by the city or town where the vehicle is principally garaged, and the revenues are used for the local community treasury.
When you register your vehicle, you will receive a bill for the motor vehicle excise tax. This bill must be paid within 30 days of being issued. It is important to note that the payment must be received by the tax collector within this timeframe, not just mailed or postmarked. If you do not pay on time, you will be liable for interest and penalties. The bill will be adjusted if you only owned the vehicle for part of the year.
There are a few ways to pay the motor vehicle excise tax. In Boston, you can pay over the phone using a credit or debit card, or a checking account. This system is available 24 hours a day, seven days a week. Alternatively, you can mail the bottom portion of your bill and payment to the provided address.
If you no longer own the vehicle, you must still pay the bill and then file an application for abatement. This can be done by returning the license plates to the RMV and obtaining a receipt, and submitting this with the bill of sale to the Board of Assessors.
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Motor vehicle excise tax valuation
In Massachusetts, all owners of motor vehicles must pay an excise tax based on the valuation of at least 10% of the manufacturer's list price. The manufacturer's list price is the price the manufacturer recommends as the selling price of that vehicle (for vehicles of the same make, type, model, and year of manufacture) when new. The minimum motor vehicle excise tax is $5. If your calculated tax is less than $5, you will be taxed $5. The tax is calculated on a calendar monthly basis.
The vehicle's value for excise purposes is not the actual purchase price or "book value" of the vehicle. The tax is prorated monthly. If your vehicle is registered after the beginning of any calendar year, you won't pay an excise for any months before the registration. If your vehicle is registered for any part of a month, you'll pay an excise for the entire month.
The tax bill is prepared by the city or town assessors, who inform the local tax collectors to facilitate the collection of payment. The assessors can levy excises based only on the manufacturer's list price and the age of the motor vehicle. They can access information on a vehicle's value from a database of valuation figures. Different sources provide valuation figures depending on the type of vehicle. For example, automobile valuations can be based on figures published in the National Automobile Dealers Association Official Used Car Guide (NADA).
If you do not pay the excise tax, the local tax collector will send a demand, with a fee of not more than $30. Interest will also accrue on the overdue bill at an annual rate of 12%. After 14 more days, the collector may issue a warrant to the deputy tax collector, which carries another $10 fee. The deputy tax collector issues a warrant notice at a cost of $12. If there is still no response, a final warrant will be delivered, at a fee of $17. All interest and penalties will be clearly stated on the bill. Unpaid excises can also impact driver's license registrations and renewals.
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Non-resident short-term registration
In Massachusetts, a motor vehicle excise tax is levied on all motor vehicle owners. This tax is based on the valuation of at least 10% of the manufacturer's list price. The tax is due 30 days from the day it is issued and must be paid in full—partial payments are not accepted. The minimum motor vehicle excise tax is $5, and the tax is prorated monthly. For instance, if a vehicle is registered on April 9, the owner will be billed an excise for April through December.
If a non-resident is issued a short-term registration plate and temporary plate, they are still required to pay the motor vehicle excise tax, which is calculated on a calendar monthly basis. For instance, if the registration period is entirely within a single month, the tax will be for one month. If the registration period extends over two months, the tax will be for two months.
It is important to note that the motor vehicle excise tax is separate from the sales and use tax, which is due by the 20th day of the month following the purchase, use, storage, or consumption of the vehicle in Massachusetts. The sales tax rate is 6.25% and applies to transfers of title or possession through retail sales by registered dealers. The use tax rate is also 6.25% and applies to all other types of transfers of title or possession where the vehicle is stored, used, or consumed in Massachusetts.
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Unpaid excises and driver's licenses
In Massachusetts, all owners of motor vehicles must pay an excise tax, which is calculated based on the value of the vehicle. The tax is due 30 days from the day it is issued and must be received by the tax collector on or before the due date. The minimum motor vehicle excise is $5, and the tax is prorated monthly. If a vehicle is registered after the beginning of a calendar year, the owner won't pay an excise for any months before the registration. However, if the vehicle is registered for any part of a month, an excise must be paid for that entire month.
If an individual fails to pay the excise tax on time, they will be subject to interest and penalties. In Massachusetts, interest will accrue on the overdue bill at an annual rate of 12%. After 14 days of non-payment, the collector may issue a warrant, which carries an additional fee. Unpaid excises can impact driver's license registrations and renewals. The mark on the registration and license will remain until the excise is paid or abated. Notices of non-renewal of the taxpayer's license and registration must be submitted to the RMV within 2 years of mailing the original excise bill.
It is important to note that if an individual sells their vehicle and still receives an excise bill, they must take the necessary steps to avoid problems with the tax abatement application. This includes returning the license plates to the RMV and obtaining a "lost plate receipt." Additionally, if an individual trades their vehicle and no longer owns it during the calendar year stated on the excise bill, they should still pay the bill and then file an application for abatement.
In summary, unpaid excise taxes in Massachusetts can have consequences for driver's license registrations and renewals. It is the responsibility of vehicle owners to ensure timely payment of excise taxes and to take the necessary steps when selling or trading their vehicles to avoid any issues with their tax obligations.
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Frequently asked questions
Yes, all owners of motor vehicles in Massachusetts must pay an excise tax.
The tax is levied at a rate of $25 per $1,000 of valuation. The minimum motor vehicle excise is $5.
The vehicle's valuation is based on a percentage of the manufacturer's list price in the year of manufacture.
The excise tax bill is sent out annually and is due within 30 days of the issue date.
If the excise tax is not paid within 30 days, a demand will be issued with a fee of up to $30, and interest will accrue at an annual rate of 12%.
