If you own a vehicle in Massachusetts, you are likely familiar with the annual excise tax bill that arrives in your mailbox. This tax is assessed on every motor vehicle and trailer registered in the Commonwealth. Use our calculator below to estimate your upcoming bill based on your vehicle's MSRP and age.
*Minimum bill is $5.00. This is an estimate only.
How the Massachusetts Motor Vehicle Excise Tax Works
The motor vehicle excise tax is a "value-based" tax. Unlike sales tax, which is a one-time payment at the time of purchase, the excise tax is an annual fee paid to the city or town where the vehicle is principally garaged.
The Tax Rate
The statewide rate for the Massachusetts excise tax is fixed at $25.00 per $1,000 of value. This rate is uniform across all municipalities in the Commonwealth. While the rate stays the same, the "value" of your car used for the calculation changes as the car gets older.
The Valuation Schedule
The Registry of Motor Vehicles (RMV) determines the value of a car based on the manufacturer's suggested retail price (MSRP) when the vehicle was new. They do not use the actual purchase price or the current "Blue Book" value. Instead, they apply a fixed depreciation percentage based on the vehicle's age:
- Year 1 (Year of Manufacture): 90% of MSRP
- Year 2: 60% of MSRP
- Year 3: 40% of MSRP
- Year 4: 25% of MSRP
- Year 5 and beyond: 10% of MSRP
Common Questions About Car Excise Tax
What if I sold my car?
If you sell your vehicle, trade it in, or it is totaled, you may be entitled to an abatement (refund) for the months remaining in the calendar year. You must provide proof of the sale and proof that the registration was cancelled or transferred to another vehicle to your local Board of Assessors.
What is the minimum bill?
Regardless of how low the valuation of your vehicle drops, the minimum excise tax bill issued by any city or town in Massachusetts is $5.00. If your calculated tax is $2.00, you will still receive a bill for $5.00.
Who is exempt from excise tax?
Massachusetts law provides for several exemptions, including:
- Disabled veterans (with specific qualifications).
- Blind individuals (for one vehicle owned and registered for personal use).
- Certain charitable organizations and government entities.
Why It Matters for Your Budget
When planning for the "true cost of ownership" of a new vehicle, many people forget to factor in the excise tax. On a $40,000 SUV, the first-year excise tax would be $900. While this amount drops significantly by the fifth year, it remains a recurring annual expense that can catch many residents off guard in February or March when most bills are issued.