Ask the Assessor

Question: “Why do I have to pay an auto excise tax each year?”

Massachusetts General Law Chapter 60A was enacted in 1928 to assess the owners of registered motor vehicles an annual excise tax “for the privilege of such registration.”

Unlike property tax bills, which are calculated by the fiscal year (July 1 through June 30), excise tax bills are calculated by the calendar year (January 1 through December 31). Also unlike property tax bills – which are calculated by the town – auto excise taxes are calculated by the Massachusetts Registry of Motor Vehicles (RMV)and are payable to the city or town in which your vehicle is listed as being garaged.

The RMV values your vehicle by the manufacturer’s suggested retail price (MSRP) and the age of your vehicle. The RMV does not consider what you actually paid for that vehicle or what condition it currently is in when it set calculates that value.

State law sets the excise tax at $25.00 per $1,000 of value as follows:

· Registered in the year before the model year (such as buying a 2024 vehicle model in the fall of 2023): 50% of MSRP;

· Model year: 90% of MSRP;

· Second year: 60%;

· Third year: 40%;

· Fourth year: 25%; and,

· Fifth and following years: 10%.

Here’s an example: You bought a 2018 model car with a $40,000 MSRP. If you bought in in late 2017, the RMV valued it at $20,000; in 2018, it valued at $36,00; in 2019 it valued it at $24,000; in 2020, it valued it at $16,000; in 2021, it valued it at $10,000; and, in 2022 and this year, the RMV valued it at $4,000.

Based on the $25.00 per $1,000 of value tax, your excise bill would be: $500 in 2017; $900 in 2018; $600 in 2019; $400 in 2020; $250 in 2021; and, $100 last year and this year.

The town cannot abate the value of your vehicle, but it can grant you a full or partial abatement (reduction) of part of your bill if your vehicle was:

· Sold or traded in;

· Stolen or a total loss in an accident;

· Junked;

· Repossessed; or,

· Returned under the “Lemon Law”

You can also receive an abatement if you moved from town prior to the January 1 beginning of the excise tax year or moved out of state during the calendar year. The abatement application is available on the town website at:

Please note that – if you leased your vehicle – the leasing company has to file the abatement application because it technically owns the vehicle in question.

And, specific paperwork is needed before the Assessors Office can process your abatement:

· Vehicle sold or traded: Copy of the bill of sale and copy of the plate return receipt from the RMV (or the new registration form if you transferred the plate to another vehicle).

· Vehicle stolen or total loss: Copy of the police report and/or insurance company settlement letter and copy of the C-19 Form (Affidavit of Lost or Stolen Plate) or new registration form from the RMV.

· Vehicle repossessed: Copy the notice from the lienholder and copy of plate return receipt (or the C-19 Form or new registration form from the RMV).

· Vehicle junked: Copy of the receipt from the junk yard and copy of the plate return receipt (or the C-19 Form or new registration form from the RMV).

· Vehicle returned (Lemon Law): Copy of the letter from dealer certifying the return and copy of the plate return receipt (or new registration form).

· Moved from Holliston before January 1 of tax year: Provide us with date of move and proof of residency before January 1 (example, utility bill, rental lease, etc.), plus proof RMV was notified before January 1 of address change for registration. (NOTE: You must notify the RMV within 30 days of moving and before January 1 to be billed by your new city or town in MA the following year. Your insurance agent typically only changes your registration address, not your garaging address.)

· Moved out of state: Provide us with your date of move and a copy of your registration from your new state.

Next Article: “I am a veteran. Are there any exemptions available for me?”

Kevin Rudden

1 Comment

  1. Carmen Chiango JR on October 5, 2023 at 9:42 am

    Great article about why we pay excise taxes on our vehicles and the process the sate uses to tax us.

    Carmen Chiango Jr.

Leave a Comment