I. Background

Recent legislation, Acts 2008, c. 523, effective July 31, 2009, directs the Massachusetts Registry of Motor Vehicles [RMV] to begin registering two classes of motor conveyances not previously required to be registered in Massachusetts. This TIR explains how sales/use taxes on these classes of vehicles is now to be paid. [1]

II. Discussion

As of July 31, 2009, the RMV requires "Low Speed Vehicles" [2] and "Limited Use Vehicles" to be registered as motor vehicles. These vehicles are described as follows:

A. A Low Speed Vehicle ("LSV ") is any 4-wheeled motor vehicle that:

  • has a 17-character Vehicle Identification Number [VIN]
  • has been issued a Certificate of Origin
  • has a gross vehicle weight rating (GVWR) of less than 3,000 pounds
  • has a maximum speed greater than 20 miles per hour but not greater than 25 miles per hour, and
  • is certified by the National Highway Traffic Safety Administration as an LSV, as demonstrated by:

    1. the Certificate of Origin, title, or out-of-state registration listing the body style or body type as "LSV" or "Low Speed Vehicle," and;
    2. the Manufacturer's Certification Label posted on the vehicle containing the VIN, and indicating that the vehicle is a "Low Speed Vehicle."

B. A Limited Use Vehicle ("LUV") is any vehicle that:

  • is designed by its manufacturer to be operated on public ways
  • has 2 or more wheels
  • has been issued a Certificate of Origin
  • has a 17 character VIN
  • is certified by the manufacturer to meet Federal Motor Vehicle Safety Standards (FMVSS) for that particular class of vehicle ( e.g. passenger, motorcycle, truck, etc.), and
  • has a speed on a paved level surface that can exceed 30 miles per hour but cannot exceed 40 miles per hour.

III. Payment of Tax

Under Massachusetts law, sales of tangible personal property (and certain services), including motor vehicles, are generally subject to the sales or use tax under G.L. c. 64H, § 2, or G.L. 64I, § 3. Tax on most sales of tangible personal property and taxable services is paid by the purchaser to the vendor, who then pays the tax collected to the Department of Revenue. G.L. c. 64H, § 3. In the case of sales of motor vehicles, however, tax is collected directly from, or on behalf of, the purchaser by the Registry of Motor Vehicles. Id.§ 3(c). The tax on sales of LSVs and LUVs was formerly collected by the vendor except in the case of casual and isolated sales of these conveyances, which were exempt from tax. As these conveyances are now considered motor vehicles, tax on these vehicles is now directly paid to RMV either by the customer, or by an authorized dealer or other party on behalf of the customer. In addition, since casual and isolated sales of motor vehicles are not exempt from use tax, G.L. c. 64I, § 7, use tax must be paid on transfers of these vehicles unless the purchaser is the spouse, mother, father, brother, sister, or child of the seller, or another exemption applies.

IV. Requirements for Registration

A. Low Speed Vehicles and Limited Use Vehicles Purchased on and after July 31, 2009

Every purchaser, transferee, or other user with title to or possession of a motor vehicle, trailer, or other vehicle in Massachusetts who is required by G.L. c. 90 to register the vehicle in Massachusetts, or who is required by G.L. c. 90D to title the vehicle in Massachusetts, must, within ten (10) days of the date of purchase, transfer, or use, file a completed Application for Title and Registration (Registry of Motor Vehicles Form RMV-1) with the Registrar of Motor Vehicles and pay the sale or use tax due. For acceptable forms of payment, see the Motor Vehicle Regulation, 830 CMR 64H.25.1(4)(b).

The RMV-1 must be completed as follows:

  1. Dealer sales. In the case of a sale at retail by a Massachusetts dealer in the regular course of business, the dealer must complete the Application for Title and Registration (Form RMV-1) and give it to the purchaser.

  2. Casual sales. In the case of a casual and isolated sale or transfer, the purchaser, transferee, or user must complete the Application for Title and Registration (Form RMV-1).

As noted, tax is to be paid at RMV. In many cases, however, dealers, lessors, and insurers may have an agreement with the Registrar and the Commissioner allowing them to transfer payments of tax due on sales of motor vehicles to the Registrar on behalf of their customers via electronic funds transfer. See 830 64H.25.1(4)4.

Out-of-state purchases of LSVs and LUVs are subject to the six-month presumption established by G.L. c. 64I, § 8(f).

B. Low Speed Vehicles and Limited Use Vehicles purchased prior to July 31, 2009

Generally, an owner of a Low Speed Vehicle or Limited Use Vehicle (except a Limited Use Motorcycle) purchased prior to July 31, 2009 must present proof that any required tax has been paid, or must pay any tax due at the time of registration as provided by G.L. c. 64I, § 4. An owner of a Limited Use Motorcycle purchased prior to July 31, 2009 and previously registered with RMV as a moped (motorized bicycle [3]) will be permitted to register that vehicle without proof that Massachusetts sales or use tax was paid providing the current owner has an active or expired for less than one year motorized bicycle (moped) registration and decal issued by the RMV. Those without such registrations and decals must present proof that any required tax has been paid, or must pay any tax due at the time of registration as provided by G.L. c. 64I, § 4.

Out-of-state purchases of LSVs and LUVs are subject to the six-month presumption established by G.L. c. 64I, § 8(f).

Purchases of used LSVs and LUVs in casual and isolated (private party) sales, which took place before July 31, 2009 are generally not subject to sales or use tax.

V. Additional Information

For additional information concerning non-tax requirements relating to LSVs and Limited Use Vehicles, please contact the Registry of Motor Vehicles or go to:

http://www.mass.gov/rmv/alerts/green_vehicles.htm
http://www.mass.gov/rmv/regs/lsv.htm
http://www.mass.gov/rmv/regs/luv.htm

/s/Navjeet K. Bal
Navjeet K. Bal
Commissioner of Revenue

NKB:MTF:lr

September 24, 2009

TIR 09-20



[1] As the LSVs and LUVs that are the subject of this TIR are now considered motor vehicles, all rules contained in the Motor Vehicle Regulation, 830 CMR 64H.25.1, with respect to the tax consequences of transactions in motor vehicles are fully applicable to these vehicles as well.

[2] Also called "Low Speed Motor Vehicles."

[3] "Motorized bicycle'', a pedal bicycle which has a helper motor, or a non-pedal bicycle which has a motor, with a cylinder capacity not exceeding fifty cubic centimeters, an automatic transmission, and which is capable of a maximum speed of no more than thirty miles per hour. G.L. c. 90, § 1.