How Motor Vehicle Excise Tax is Calculated
Motor Vehicle Excise Tax is a State Tax calculated by the Massachusetts Department of Revenue.
The amount of the motor vehicle excise due on any particular vehicle or trailer in any registration year is calculated by multiplying the value of the vehicle by the motor vehicle excise rate. That rate is fixed at $25.00 per thousand dollars of value. The value of the vehicle for the purpose of the excise is the applicable percentage for that year of the manufacturer’s suggested retail price for the vehicle.
The applicable percentages are set out in Ch. 60A S1 as follows:
- 50% -- In the year preceding the year of manufacture
- 90% -- In the year of manufacture
- 60% -- In the second year
- 40% -- In the third year
- 25% -- In the fourth year
- 10% -- In the fifth and succeeding years
The manufacturer’s list price for any particular vehicle is the price recommended by the manufacturer as the selling price of that vehicle when new. It is the manufacturer’s list price rather than the actual purchase price which will control for purposes of calculation the motor vehicle excise.
How Quarterly Tax Bills are Calculated:
The town operates on a Fiscal Year calendar (July 1 to June 30).
1st and 2nd quarter bills (due Aug 1st & Nov 1st) are preliminary bills. These two billing amounts reflect 1/4 of the prior Fiscal Year's annual amount.
In December, the new tax rate is set and any re-valuations to properties are assessed. Working with the new tax rate and new property values, the actual Fiscal Year annual amount is calculated.
Once the actual annual amount is obtained, the two preliminary amounts paid are subtracted from the actual Fiscal Year total, and the remaining tax amount due for the Fiscal Year is divided between the 3rd and 4th quarter bills (due Feb 1st & May 1st).