- Finance Department
- Motor Vehicle Excise Tax
Motor Vehicle Excise Tax
What is the motor vehicle and trailer excise?
An excise is a tax upon an event or privilege. Motor vehicle excise is taxed on the calendar year. It is an assessment in lieu of a personal property tax and is levied for the privilege of registration and taxed on the calendar year. The excise due is calculated by multiplying the value of the vehicle by the motor vehicle tax rate. The tax rate is fixed at $25 per one thousand dollars of value.
According to M.G.L. Ch. 60A, the basis for the excise uses the motor vehicle itself as a means to measure this privilege. The value of a vehicle is determined as a percentage of the manufacturer's suggested retail price (when new) for that vehicle based on the year of manufacture. Revenue derived from the excise can be used by cities and towns for any lawful purpose.
IMPORTANT: The RMV bills based on any registration that is active. If status of vehicle ownership or operation changes the Registration must be cancelled in order to stop future billing and possibly allow for an abatement of excise tax already issued for the entire year. An active registration will cause bills to issue each year from the RMV unless the registration is cancelled or expired.Three Important
What valuation is used for motor vehicle excise bills?
The excise is based on the value of the motor vehicle as determined by the Commissioner of Revenue upon certain percentages of the manufacturer's suggested retail price in the year of manufacture (MSRP). The excise valuation is not based on the actual purchase price or "book value" of the vehicle. The percentages set forth in the statutory depreciation schedule that are applied to MSRP are as follows:
In the year preceding the designated year of manufacture 50% (i.e. a 2016 model bought/registered in 2015)
In the year of manufacture 90% (i.e. a 2015 vehicle bought/registered in 2015)
In the second year 60%
In the third year 40%
In the fourth year 25%
In the fifth and all succeeding years 10%
What is the rate of excise and where is it assessed?
An excise in the amount of $25 per thousand is assessed upon the value of the vehicle as determined in accordance with the depreciation schedule above . The excise is levied for a full calendar year and is assessed by the community where the motor vehicle is customarily garaged (this is determined by the RMV based on information given at time of registration of the vehicle)
M.G.L. Ch. 60A Sec. 1 provides that the owner of any motor vehicle registered for less than a full calendar year will be obligated to pay an excise based on the entire month when the vehicle was registered, as well as the remaining months of the year. For example, a vehicle registered on April 9th will be assessed an excise for the months of April through December.
The Registry of Motor Vehicles sends billing information to municipalities periodically throughout the year. The first billing is usually in January for any vehicles registered as of Jan 1. The RMV will also bill at this time for any vehicles registered in the last few weeks of the prior calendar year. Approximately every three months the RMV will send out bills for any cars registered after Jan 1 and for specialized plates that have specific billing dates. Payment of excise is due thirty days after the the date the bill was issued. When bills are not paid on time, interest, penalties and fees begin to accrue.
When are excise bills issued and due?
1) A bill for a vehicle that is no longer owned should not be ignored
2) When a motor vehicle is registered, a motor vehicle excise bill is generated and the owner is responsible for its payment. If the owner moves within Massachusetts or out of state, if he or she sells or trades the motor vehicle, or if it is stolen, s/he needs to make every effort to obtain the bill, to pay it, and then to apply for an abatement if they are eligible.
Filing an application does not stay the collection of your excise bill.
To avoid interest, charges and collection action, including non-renewal of your registration, you must pay the bill in full within 30 days of its issue date. You will receive a refund if the abatement is granted.
3) To avoid not receiving an excise bill on time, the owner should keep the Registry of Motor Vehicles aware of the current mailing address. There are several on-line transactions which can be performed at the Massachusetts Registry of Motor Vehicles website.
According to MGL CH.60 ss1 TWO forms of proof must be provided:
1. Proof of vehicle disposition AND
2. Proof of status/disposition of plate (registration either canceled or transferred)
What documents are needed to file for an abatement?
If the vehicle was sold, donated, traded on junked: submit a bill of sale, donation or traded or junked document, and either a Plate Return Receipt or new registration if plates were transferred with an abatement application.
If vehicle was total loss or stolen: submit an insurance company settlement or plate return receipt or C-19 (affidavit of lost/stolen plate from the Registry of Motor Vehicles) with an abatement application.
How are abatements calculated?
Abatements are prorated by the month. No abatement can reduce a tax to less than $5, and no abatement of less than $5 will be granted.
When must I file for an abatement?
Under M.G.L. c.60A:2 as amended by Chapter 262, sections 10-11, of the Acts of 2004, abatement applications must be received by the assessors within three years after the excise bill was due, or one year after it was paid, whichever was later.
Filing for an abatement does not stay the collection of the tax. Pay the bill by the due date to avoid fees, interest and penalties. An abatement will come to you in the form of a refund. If you do not pay the bill and are charged fees, interest and penalties, and then apply for an abatement only the tax can be abated, you will be responsible for any other charges.
Are there Exemptions?According to M.G.L, Chapter 60A, § 1, the following persons qualify for an exemption on motor vehicle excise tax:
1. Suffer a permanent impairment of vision in both eyes.
2. Submit either a certificate from the Division of the Blind or a physician’s letter.
1. Suffer a loss or permanent loss of use of both arms or both legs.
2. Submit a physician’s letter. If the exemption is being sought due to loss of use of both limbs, the letter must state that it is a permanent loss.
Veterans (with no special plate)
1. Suffer a loss or permanent loss of use of one foot, one hand, one eye, or permanent impairment of vision in at least one eye.
2. Submit a certificate from the Veteran’s Administration Office.
Veterans with Disabled Veteran Plate OR a determination from RMV as permanently disabled
The Medical Advisory Board within the Registry of Motor Vehicles (RMV) has determined that the veteran is permanently disabled and the RMV has issued a disable veteran license plate. In 2016 requirements for DV exemption of excise changed in that an registrant need not display the DV plate, having been issued a letter from the RMV stating the determination by the MAB that the veteran is permently disabled also qualifies the Veteran for the exemption
Prisoner of War and Surviving Spouse
1. Registers a vehicle with a POW license plate.
2. Surviving spouse may receive the exemption until remarriage.
Non-Domiciliary Military Person (50 U.S.C. App. §571, Federal Servicemembers Civil Relief Act