Under MGL Chapter 60A, all Massachusetts residents who own and register a motor vehicle must annually pay a motor vehicle excise. 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 the revenues become part of the local community treasury.
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.
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 through a data bank complete with valuation figures. Different sources provide the valuation figures depending upon whether the motor vehicle is an automobile, a truck, a motorcycle, or a trailer. For example, automobile valuations are derived from figures published in the National Automobile Dealers Association Official Used Car Guide (NADA), to which the Registry has electronic access. Most public libraries have copies of NADA and other motor vehicle official guides.
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 (M.G.L. c.60A, s.1) 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:
|The Value of a motor vehicle for excise purpose is determined by the Commissioner of Revenue at varying percentages of the manufacture's list price in the year of manufacture as follows:|
|In the year preceding the model year (brand new car released before the 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%|
Condition and market value are not considerations in determining the value , nor is age after the fifth year.
Every motor vehicle owner must pay an excise tax based on valuation of at least ten percent of the manufacturer’s list price. Even though an owner may have applied for an abatement that may reduce an excise tax bill, no excise shall be less than $5.