Motor Vehicle Excise Tax General Information
What is motor vehicle excise tax?
Under MGL Chapter 60A, all Massachusetts residents who own and register a motor vehicle must annually pay a motor vehicle excise tax. Also, under MGL Chapter 59, Section 2, it is important to note that every motor vehicle, whether registered or not, is subject to taxation, either as excise or personal property, for the privilege of road use, whether actual or future. The excise is levied by the city or town where the vehicle is principally garaged and revenues become part of the local community treasury.
Billing:
Excise bills are prepared by the Registry of Motor Vehicles according to the information on the motor vehicle registration. They are sent to city or town assessors who commit them to the local tax collectors for distribution and collection of payment. Cities and towns may also prepare their own bills based on excise data sent by the Registry in conformity with Registry requirements.
Bill Computation:
An excise at the rate of $25 per one thousand dollars of valuation (effective 1/1/81) is levied on each motor vehicle. Information on the value of a motor vehicle is accessed electronically by the Registry of Motor Vehicles though a data bank complete with valuation figures.
Valuation figures are the manufacturers’ list prices for vehicles in their year of manufacture. Present market value, price paid, or condition are not considered for excise tax purposes. The excise tax law establishes its own formula for valuation for state tax purposes whereby only the manufacturer’s list price and the age of the motor vehicle are considered. The formula is as follows:
In the year preceding the model year (brand new car released before model year) 50%
In the model year 90%
In the second year 60%
In the third year 40%
In the fourth year 25%
In the fifth and succeeding years 10%
Every motor vehicle owner must pay an excise tax based on a valuation of at least ten percent of the manufacture’s list price; thus, owners of vehicles older than five years should have a fixed excise tax bill for succeeding years of ownership. No excise shall be less than $5.
Prorating:
Excise tax is prorated on a monthly basis. If a vehicle is registered for any part of a month, the excise will be due for all of that month.
Important Reminder:
You should keep the Registry of Motor Vehicles aware of your current mailing address. There are several on-line transactions which can be performed at the Massachusetts Registry of Motor Vehicles website, which is http://massrmv.com
I no longer reside in Wilmington. Do I still have to pay this bill?
You must pay motor vehicle excise to the city or town you resided in on January 1st. Residency is based on the Registry of Motor Vehicles registration records as of January 1st. You are not entitled to an abatement if your move to another Massachusetts city or town during the calendar year.
If you move out of Massachusetts and register your vehicle in another state and cancel your Massachusetts registration, you can file an application for abatement. A copy of the new out-of-state registration and Plate Return Receipt from the Massachusetts Registry of Motor Vehicles is required to file for an abatement.
I no longer own this vehicle. Do I still have to pay this bill?
If you no longer own the vehicle and the registration was cancelled or transferred to another vehicle, you may file an application for abatement. If the vehicle was sold, traded-in, donated, junked or repossessed, a copy of the bill of sale, donation/junkyard receipt, or lien holder notice is required to file an application for abatement. If the vehicle was stolen or involved in an automobile accident and your insurance company considered it a total loss, a copy of the settlement letter is required to file an application for abatement.
I took my car off the road and cancelled my registration. Do I still have to pay this bill?
You are not entitled to an abatement if you cancel your registration and retain ownership of the vehicle. It should be noted, however, that bills will not be generated in subsequent tax years unless the vehicle is once again registered with the Registry of Motor Vehicles.
Abatements:
If an owner of a motor vehicle thinks that he/she is entitled to an adjustment of his/her excise bill, it is strongly recommended that he/she pay the bill in full, then contact the local Board of Assessors for an application for abatement. Although payment of a bill is not a precondition for an abatement, an owner risks incurring late fees and penalties if an abatement is not granted. Abatements can be handled through the mail; however the bill should be paid as assessed and a refund will follow if the abatement is granted.
Abatement applications must be received by the board of assessors within three years after the excise was due, or one year after the excise was paid, whichever is later. To preserve your right to an abatement and to appeal, you must file on time.
Note: you are not entitled to an abatement if you (1) cancel your registration and retain ownership of the vehicle, or (2) move to another Massachusetts city or town during the calendar year. When an abatement is granted, excise bills are prorated by month, thus the owner is responsible for excise accrued through the month in which the car was last registered to him/her. No excise may be reduced to less than $5 and no abatement or refund of less than $5 may be granted.
Click here for the Massachusetts Department or Revenue motor vehicle excise abatement application.