Guide Motor Vehicle Excise

When you register your motor vehicle or trailer, you have to pay a motor vehicle and trailer excise. Get the ins and outs on paying the motor vehicle excise tax to your local city or town hall.

This guide is not designed to address all questions which may arise nor to address complex issues in detail. Nothing contained herein supersedes, alters or otherwise changes any provision of the Massachusetts General Laws, Massachusetts Department of Revenue Regulations, Department rulings or any other sources of the law.

Introduction

If you own a registered motor vehicle, you have to pay a tax, called a motor vehicle and trailer excise, each year. When you get your motor vehicle excise bill, you will also get instructions on how to pay it.

Every motor vehicle and trailer registered in Massachusetts is subject to the motor vehicle excise unless exempted.

Definition of "motor vehicle"

“Motor vehicles” are defined as “all vehicles constructed and designed for propulsion by power other than muscular power including such vehicles when pulled or towed by another motor vehicle,” excluding:

  • Trains and trolleys, including trackless trolleys
  • Vehicles used for purposes other than transporting property and are incapable of being driven at a speed more than 12 miles per hour and
    • Used exclusively for building, repairing and maintaining highways, or
    • Designed especially for use elsewhere than on the traveled part of ways.
  • Wheelchairs owned and operated by invalids and operated or guided by a person on foot
  • Motorized bicycles

Key Actions for Introduction

Calculating the Excise

$25 per $1,000 of value

The excise rate is $25 per $1,000 of your vehicle's value. It is charged for a full calendar year and billed by the community where the vehicle is usually garaged. If your vehicle is registered in Massachusetts but garaged outside of Massachusetts, the Commissioner of Revenue will bill the excise.

If you own any motor vehicle that has been registered for less than a full calendar year, you will pay the excise based on the entire month when you registered that vehicle, as well as for the remaining months of the year. For example, a vehicle registered on April 9th will be billed an excise for April through December.

The minimum motor vehicle excise is $5. If your calculated excise is less than $5, you will be taxed $5. 

Vehicle value

Your vehicle's value for excise purposes isn't the actual purchase price or "book value" of the vehicle. Instead, it's a percentage of the manufacturer's list price in the year of manufacture.

The manufacturer’s list price for any vehicle 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. 

Year you bought your vehicle Vehicle value (% of manufacturer's list price)
Year before designated year of manufacture 50%
Year of manufacture 90%
Second year 60%
Third year 40%
Fourth year 25%
Fifth year and onwards 10%

Additional Resources for Calculating the Excise

Collecting the Excise

A motor vehicle excise is due 30 days from the day it's issued. The tax collector must have received the payment, not just mailed (postmarked), on or before the due date.

There is no statute of limitations for motor vehicle excise bills. You are personally liable for the excise until the excise is paid off.

However, there are time limits on some of the ways that tax collectors can enforce the excise. For example, 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.

Partial payments

A tax collector does not have to accept partial payments of a motor vehicle excise bill. Accepting partial payments is solely at the collector's discretion. You do not have the legal right to partially pay an excise, unlike a property tax or betterment.

If the collector accepts partial payments for a particular motor vehicle excise bill, you still cannot direct that it applies to the excise first. Any partial payment received must be applied in this order:

  1. Interest added to the motor vehicle excise as of the payment date
  2. Collection costs added to the excise as of the payment date
  3. Outstanding excise

If the collector waives interest and costs because they total $15 or less, the payment is applied to the excise.

Additional Resources for Collecting the Excise

Exemptions

Use the abatement application form to apply for an exemption. You must file it with the assessors within:

  • 3 years after the date the excise was due, or
  • 1 year after the excise was paid

Whichever is later. Filing an application does not mean that collecting the excise has stopped. Even if you did not timely file an application, assessors can still grant you an exemption, but only if the excise is still outstanding. Actions on late applications is solely within the assessors' discretion, which means that you can't appeal to any local or state board, agency, or official. If the assessors decline to grant you one, you must pay the excise in full and apply for abatement by right within 1 year of the payment date.

You may also file an exemption application if you're:

  • The spouse of a qualifying person, if the vehicle is jointly owned and registered or leased in the names of the individual and spouse
  • The surviving spouse of a qualifying person, executor under a will, or administrator of the estate if the individual did not apply while alive

Exempted organizations and individuals

An exemption may be granted if the motor vehicle is owned and registered by any of the following:

  • Governments – The United States, the Commonwealth of Massachusetts, or any political subdivision of Massachusetts.
  • Charitable or religious organizations whose personal property is exempt under M.G.L. Ch. 59 Sec. 5 Cl. 3 and Cl. 10 respectively.
  • Lessors engaged in the business of leasing motor vehicles if the vehicle is leased for a full calendar year to a charitable organization, other than a degree granting or diploma awarding institution.
  • Manufacturers, farmers, or dealers of vehicles that operate with special plates (Section 5 plates).
  • (Former) prisoners of war and their surviving spouses – Exempt on 1 vehicle of choice that the veteran or surviving spouse owns (doesn't have to be sole owner) and registers for personal, non-business use if:
    1. The city or town has accepted this local option exemption, and
    2. The Veterans Administration, or the veteran’s discharge, documents that the veteran was held as a prisoner of war.
    If the surviving spouse remarries, the exemption ends.
  • Disabled or blind veterans – Exempt on 1 vehicle (of the veteran's choice) that the veteran owns (doesn't have to be sole owner) and registers for personal, non-business use if:
    1. The veteran was honorably discharged from peacetime or wartime military service.
    2. The Veterans Administration certifies that, due to military service, the veteran: 
      • a) Has lost at least 1 foot or hand,
      • b) Has permanently lost of use of at least 1 foot or hand, or
      • c) Has permanent impairment of vision meeting certain specifications in at least 1 eye
      OR
    3. The Medical Advisory Board in the RMV has determined that the veteran has a permanent service-connected disability, proven by:
      1. A disabled veteran (DV) plate, or
      2. MAB letter notifying the veteran of its determination
      The surviving spouse of the veteran does not qualify for an exemption.
  • Massachusetts servicemembers – A member of the military whose domicile is in Massachusetts is exempt on 1 vehicle of choice, owned (doesn't have to be sole owner) and registered for personal, non-business use, if:
    • The city or town has accepted this local option exemption. If accepted, the charge added when collecting a delinquent excise is increased by $3.
    • The servicemember is on active military duty outside the continental United States for at least 45 days of the excise calendar year. If the service person is wounded or killed in an armed conflict, the 45 day limitation does not apply.
    The surviving spouse of the servicemember does not qualify for an exemption.
  • Disabled or blind persons – Exempt on 1 vehicle of choice that they own (doesn't have to be sole owner) and register for personal, non-business use if the person:
    • Has lost both legs or both arms,
    • Has permanently lost use of both legs or both arms, or
    • Has permanent impairment of vision meeting certain specifications in both eyes
    The surviving spouse of the person does not qualify for an exemption.

The exemptions for handicapped veterans and non-veterans applies to no more than 1 motor vehicle owned and registered for personal non-commercial use.

Under federal law, the following servicemembers (and their spouses) are exempt from a motor vehicle excise for any of the vehicles they own so long as they are not used for a business or trade:

  • A servicemember whose domicile is in a state other than Massachusetts, and is stationed in Massachusetts or elsewhere due to military orders, as documented by the servicemember’s commanding officer.
  • The spouse of a servicemember domiciled in a state other than Massachusetts, if the spouse is domiciled in the same state as the servicemember,and the spouse is in Massachusetts solely to reside with the servicemember, as documented by the servicemember’s commanding officer.

Buying or leasing a new vehicle

When you receive an exemption on a motor vehicle for an excise year, and then buy or lease a new vehicle during the same year, whether you are exempted or not depends on whether you keep the first vehicle. You can only have an exemption on 1 vehicle (that you own and registered or leased for personal, non-commercial use) at a time during the excise year.

Therefore, you can't have another exemption for another vehicle that you bought or leased later in the year if you continue to own or lease the first vehicle for the rest of the year.

However, if you've been granted an exemption for a particular vehicle for an excise calendar year, you may receive an exemption for an excise assessed for that same excise calendar year, on another vehicle you bought or leased later in the year, if you:

  • Dispose of the vehicle, or
  • Terminate the lease during the year

Assessors may grant you an exemption on a second vehicle for the remainder of the excise calendar year as a continuation of the annual exemption as follows:

  1. If you owned the exempted vehicle and buy another vehicle, you:
    • Must transfer title to the exempted vehicle, and
    • Transfer the registration on the exempted vehicle to the second vehicle, or cancel the registration on the exempted vehicle and get a new registration on the second vehicle.
  2. If you owned the exempted vehicle and lease another vehicle, you
    • Must transfer title to the exempted vehicle, and
    • Cancel the registration on the exempted vehicle
  3. If you leased the exempted vehicle, and lease another vehicle at the end of the lease period or otherwise, the lease on the exempted vehicle must be up or terminated.

Additional Resources for Exemptions

Abatements

You can reduce the excise you have paid by filing an abatement application. There are two applications to choose from:

You must file applications for abatement with your local board of assessors within:

  • 3 years after the excise's due date, or
  • 1 year after the excise was paid

Whichever is later. Filing an application does not mean that collecting the excise has stopped.

Assessors have 3 months from the date they receive an abatement application to grant or deny an abatement. You can extend the 3 month action period by giving your written consent. The application is considered denied if assessors do not act within the 3 month (or extended) action period. 

Even if you did not timely file an abatement application, assessors can still grant you an abatement, but only if the excise is still outstanding. Actions on late applications is solely within the assessors' discretion, which means that you can't appeal to any local or state board, agency, or official. If the assessors decline to grant you one, you must pay the excise in full and apply for abatement by right within 1 year of the payment date.

If your application is denied, you can appeal to the county commissioners, or the Appellate Tax Board (ATB). You must file the appeal within 3 months of the date the assessors granted or denied the abatement, or the date the application was deemed denied if they did not act on it.

Abatement amount

The abatement amount granted to taxpayers who have:

  • Moved out of Massachusetts
  • Transferred vehicle ownership, or
  • Had their vehicles stolen

Is based on the number of months remaining in the calendar year after the month the last eligibility requirement for the abatement takes place.

For example, if you move to another state in July, and register the vehicle and cancel the Massachusetts registration in August, you have an abatement for September through December (4 months out of 12), or a third of the excise.

If you've transferred both the ownership and registration in the same month, the abatement is for the month you transferred and the months remaining in the calendar year. For example, you sell a motor vehicle in July and also cancel the registration on that vehicle the same month. You're granted an abatement for August through December (5/12 of the excise). If you transferred the registration to another vehicle instead of canceling the registration, you're granted an abatement for July through December (6/12 of the excise).

Assessors cannot grant an abatement that is less than $5 or results in a motor vehicle excise of less than $5, unless the entire excise is abated.

If the abatement is ordered by the county commissioners or ATB, you're entitled to interest at 6% on the amount refunded, from the date the excise was overpaid. No interest is owed on refunds of paid excises when assessors grant an abatement.

Valid reasons for an abatement

You may receive an abatement for any of the following:

  • Moved outside of Massachusetts - During the same calendar year as the excise, you:
    1. Moved to another state or country
    2. Registered the vehicle there, and
    3. Canceled or did not renew the Massachusetts registration

      Assessors may treat registration in the new state or country as a cancellation of the Massachusetts registration, especially where you must surrender Massachusetts plates to register. In that case, the assessors should abate any excise assessed for the following year as well. If the Massachusetts registration continues for another calendar year, you should cancel the registration to avoid being taxed further.
  • Moved from billing city or town - You:
    1. Moved to another city or town within Massachusetts before January 1 of the excise calendar year, and
    2. Notified the RMV of your address change and vehicle’s place of garaging by January 1 of the excise calendar year, or within 30 days of the move if later.

      Assessors must abate the whole excise within 60 days of the abatement, and notify the assessors of the city or town where the excise should have been assessed. The assessors of that city or town must then recommit the excise to the collector so that you're billed for the year. You do not have a right to abatements if you move to another Massachusetts city or town during the same calendar year as the excise.
  • Vehicle was overvalued - The excise was based on more than the appropriate percentage (see "Calculating the Excise"). In this case, assessors should abate the excise to the correct amount and notify the Registry of Motor Vehicles (RMV) to prevent incorrect excises from being assessed in the future. 

    You do not have a right to abatements due to value based on the actual purchase prices or the current vehicle conditions. The excise is not based on the actual purchase price or “book value” of the vehicle. 
  • Your vehicle was stolen and:
    1. You notify the local police authorities within 48 hours of discovering the theft,
    2. You surrender your certificate of registration more than 30 days after the theft, and 
    3. You received a certificate of cancellation of registration signed by the Registrar of Motor Vehicles (RMV) or your authorized agent verifying that your vehicle was stolen.
  • Transferred vehicle ownership - During the same calendar year as the excise, you:
    1. Transferred title to the vehicle, due to sale, trade, gift, repossession, Lemon Law return, insurance settlement or other disposition, and
    2. Cancelled or transferred registration of the vehicle to another vehicle
      You do not have a right to abatements if you keep ownership of your vehicles after canceling or transferring the registrations.
  • Re-registered the vehicle – The same vehicle was registered in the same year by the same person (e.g., you later register the vehicle with a vanity plate). During the same calendar year as the excise, the same taxpayer:
    1. Canceled the vehicle registration
    2. Retained ownership of the vehicle, and
    3. Re-registered the vehicle later in the year
      The taxpayer is eligible for abatement of the entire excise assessed upon re-registering the vehicle.

Additional Resources for Abatements

Penalties

When you fail to pay a motor vehicle excise, a tax collector can collect the delinquent excise by placing ("marking") your vehicle registration and operating license in non-renewal status at the Registry of Motor Vehicles (RMV). A collector can also:

  • Bring a lawsuit against you (within 6 years of the date the excise is due and payable)
  • Withhold a payment from any amount that the city or town pays to you ("set-off", no statute of limitations)
  • Have your permit or license denied, revoked, suspended, or not-renewed by a board, department, or officer of the community (if the community has adopted G.L. c. 40, § 57; no statute of limitations)

Penalties process

  1. The collector sends you a demand for payment of the motor vehicle excise. The earliest that the collector may send a demand is 2 days after the excise due date.
  2. If you don't pay the demand within 14 days, the collector will issue a warrant to collect to a deputy collector.
  3. If the excise is still unpaid after that time period, the collector issues a warrant to collect the excise to a deputy collector, assistant collector, or other officer, which lets the officer to collect the excise from you.
  4. You are sent a notice that the tax collector has issued the warrant to collect the excise to an officer.
  5. The officer must wait at least 30 days after the warrant issuing notice has been mailed (step 3). If you fail to pay within 30 days of receiving the notice of your warrant, the deputy collector will visit you to serve the warrant by:
    • Presenting the warrant to you or your representative in person, or
    • Hand delivering of a copy of the warrant to your usual and last known residence, or your place of business 
  6. If you still fail to pay the excise, the deputy collector or collector will notify the Registrar of Motor Vehicles (RMV) within a 2 year period after the original excise bill was mailed. The RMV will then mark your license and registration as unable to be renewed.
  7. The mark on your registration and license stays until the excise is paid (or abated).

After the collector issues a warrant to a deputy collector or other officer, the collector is still responsible for collecting the motor vehicle excise. The collector is also responsible for making sure that any officer issued a warrant:

  • Uses proper collection procedures, i.e., only those consistent with state law and local policies, and
  • Provides acceptable customer service to excise taxpayers, including properly answering their questions

You must pay the excise within 30 days of receiving the bill. If you do not fully pay a motor vehicle excise on or before its due date, you also have to pay:

  • Interest (12% per year, from due date to payment date), and
  • Collection costs for:
    • Sending a demand for payment of the excise – Set locally, up to $30
    • Issuing a warrant to collect the excise to a deputy collector, assistant collector or other officer - $10
    • Sending a notice that a warrant to collect the excise has been issued to a deputy collector, assistant collector or other officer - $12
    • Serving the warrant to collect the excise - $17
    • “Marking” the taxpayer’s vehicle registration and operator’s license for non-renewal at the RMV - $20

If the total amount of interest and collection costs added to an overdue motor vehicle excise is $15 or less, a tax collector may (but is not required to) waive any or all accrued interest and costs. Once the total interest and costs owed is more than $15, however, the collector cannot waive any interest or costs for any reason.

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