How Is Massachusetts Motor Vehicle Excise Tax Calculated?

The Massachusetts motor vehicle excise tax is an annual tax for registering a motor vehicle in the Commonwealth, assessed by the city or town where the vehicle is garaged as of January 1st. The funds support local community services like road maintenance and public safety. The Registry of Motor Vehicles (RMV) provides registration data to each municipality, which then calculates and issues the tax bills.

How the Excise Tax is Calculated

The tax calculation follows a state-mandated formula that multiplies the vehicle’s valuation by a fixed rate of $25 for every $1,000 of value. This valuation is not based on the vehicle’s current market value, but on the manufacturer’s suggested retail price (MSRP) from its year of manufacture.

A state-mandated depreciation schedule is applied to the original MSRP to determine the taxable value. The percentage of the original MSRP used for valuation is as follows:

• In the vehicle’s model year: 90%
• In the second year: 60%
• In the third year: 40%
• In the fourth year: 25%
• In the fifth year and each year after: 10%

For a vehicle registered in the calendar year before its designated model year, the value is set at 50% of the MSRP. The minimum excise tax is $5.

The tax is also prorated for the number of months the vehicle is registered during the calendar year. If a vehicle is registered after January, the owner is taxed only for the full months remaining. For example, a car registered on any day in May will be taxed for eight months, from May through December.

Information Required for an Abatement

An abatement is a reduction of the excise tax that owners may file for if they believe the tax was improperly assessed or they no longer owe it. Common reasons for filing an abatement include:

• The sale or trade of the vehicle
• Moving out of Massachusetts
• The vehicle was stolen or declared a total loss
• An overvaluation due to an incorrect MSRP

To apply, you must provide documentation to support the claim. If a vehicle was sold, the owner must provide a copy of the bill of sale and proof that the license plates were returned to the RMV or transferred to a new vehicle. For those who have moved out of state, a copy of the vehicle registration from the new state is required.

In cases of overvaluation, the owner needs to supply documentation verifying the correct MSRP. All information is submitted using the “Application for Abatement of Motor Vehicle Excise” form, which can be downloaded from the local assessor’s website or obtained in person.

The Abatement Filing Process

The completed application and supporting documents must be filed with the Board of Assessors in the city or town that issued the tax bill. Most assessors’ offices accept submissions by mail or in person at their municipal office.

After submission, the Board of Assessors will review the application and documentation. The board will then send a written decision to grant or deny the abatement, or to request more information.

You must pay the original excise tax bill by its due date, even if an abatement application is pending. Paying on time prevents interest and other penalties, such as a demand fee for bills unpaid after 30 days. If an abatement is granted after payment, the municipality will issue a refund for the overpaid amount.