As a new local official, understanding the administration of the motor vehicle excise is essential, as it is one of the most visible and significant revenue sources for Massachusetts cities and towns. The motor vehicle excise is an annual tax imposed on every motor vehicle and trailer registered in the Commonwealth and is governed by Massachusetts General Laws Chapter 60A. Responsibility for administering the excise is shared locally between assessors, who determine liability and valuation, and collectors, who bill, receive payments, and enforce collection. Because excise administration is almost entirely driven by statute, new officials should rely on Department of Revenue and Division of Local Services guidance and understand that local discretion is very limited.
The excise is assessed on vehicles that are registered and normally garaged in a community as of January 1 of the calendar year, unless a specific statutory exemption applies. A critical concept for new officials is that excise valuation does not reflect market value, purchase price, mileage, or vehicle condition. Instead, state law establishes a uniform depreciation schedule based solely on the manufacturer’s list price and the age of the vehicle. The statutory depreciation table is fixed and applies statewide as follows: in the model year, a vehicle is valued at 90 percent of manufacturer’s list price; in the second year, 60 percent; in the third year, 40 percent; in the fourth year, 25 percent; and in the fifth and subsequent years, 10 percent. Assessors have no authority to deviate from this schedule.
Once the depreciated value is determined, the excise tax is calculated by applying the statutory rate of $25 per $1,000 of value, with a minimum excise of $5. For example, a vehicle with a manufacturer’s list price of $30,000 in its second year is valued at 60 percent, or $18,000. Dividing $18,000 by $1,000 yields 18 units, which are multiplied by $25, resulting in an annual excise of $450.
$30,000 X .60 = $18,000
$18,000 / $1,000 = 18
18 x $25 = $450 for a full year
As another example, a vehicle with a $20,000 list price that is five years old or older is valued at 10 percent, or $2,000. Dividing $2,000 by $1,000 yields 2 units, multiplied by $25, for an excise bill of $50. These examples demonstrate that excise bills are calculated mechanically using the statutory formula.
$20,000 X .10 = $2,000
$2,000 / $1,000 = 2
2 X $25 = $50 for a full year
Billing and proration are also important training topics. Vehicles registered after January 31 are assessed a prorated excise for the months remaining in the calendar year, calculated from the first day of the month of registration through December 31. For instance, a vehicle registered on July 10 is liable for excise from July through December, or six months of the annual amount. Accurate review of Registry of Motor Vehicles data is essential to ensure correct billing and proration.
Exemptions and abatements must be handled carefully and consistently. Certain vehicles may qualify for exemption under Chapter 60A, while abatements may be granted for limited statutory reasons such as overvaluation under the schedule, transfer of ownership, theft, or relocation out of state when registration is canceled. Applications are subject to filing deadlines, and assessors must act on timely applications within 90 days. Finally, unpaid excise bills accrue interest and collection costs and may result in non-renewal of registration or license through the Registry of Motor Vehicles, making accurate administration and clear communication a key responsibility of local officials. For more guidance on Motor Vehicle Excise, please visit DLS Motor Vehicle Excise Training and Resources webpage.
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Editor: Dan Bertrand
Editorial Board: Tracy Callahan, Sean Cronin, Janie Dretler, Jessica Ferry, Christopher Ketchen, Paula King, Jen McAllister, Brianna Ortiz and Tony Rassias
| Date published: | February 5, 2026 |
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