M.G.L. Chapter 60A imposes an excise on the privilege of registering a motor vehicle or a trailer in the Commonwealth of Massachusetts. The excise is levied annually in lieu of a tangible personal property tax. Non-registered vehicles, however, remain subject to taxation as personal property.
A vehicle's excise valuation is based on the manufacturer's list price (M.S.R.P.) in the vehicle's year of manufacture. Various percentages of the manufacturer's list price are applied as follows:
Once the value of the vehicle is determined, an excise at the rate of $25.00 per thousand is assessed. Excises are assessed annually, on a calendar year basis, by the Assessor of the municipality in which the vehicle is primarily garaged.
If a motor vehicle is registered after January 31, it is taxed for the period extending from the first day of the month in which it is registered to the end of the calendar year. For example, if a vehicle is registered on April 30, it will be taxable as of April 1, for the nine remaining months of the year (April through December) and the excise due, therefore, will be 9/12 of the full excise. In no event shall an excise be assessed for less than $5.00, nor shall an abatement or refund under Section 1 of Chapter 60A reduce an excise to less than $5.00.
A partial abatement of the excise is appropriate in any of these circumstances, transfer of a person and vehicle to another state or country, sale of a vehicle or if existing plates are transferred to a new vehicle, overvaluation of a motor vehicle or theft of the vehicle.
In the case of a stolen vehicle subsequently recovered and registered in the same calendar year by the same owner, a proportionate part of the excise is paid for those months of the year remaining.
An exemption may be granted if the motor vehicle is owned and registered by the following entities:
The abatement application form is used to apply for an exemption, and likewise must be filed with the assessors within 3 years after the date the excise was due, or 1 year after the excise was paid, whichever is later.
A taxpayer may file an abatement application and receive an abatement for any of the following reasons:
Applications for abatement must be filed with the local board of assessors within 3 years after the date the excise was due, or 1 year after the excise was paid, whichever is later. If the taxpayer's application for abatement is denied, there can be an appeal to the Appellate Tax Board (ATB).
The Registry of Motor Vehicles annually calculates the value of all registered motor vehicles for the purpose of excise assessment. For most motor vehicles, the calculations are performed electronically using valuation tapes. For automobiles and light trucks, the valuation tape is created by the National Automobile Dealers Used Car Guide Co. (NADA.); for heavy trucks and school buses, the tape is created by Maclean Hunter Market Reports, Inc., publisher of the Truck Blue Book; and for motorcycles, the tape is created by Hap Jones, publisher of the Motorcycle Blue Book. In each case, it is the vehicle’s identification number (VIN) which drives the electronic valuation process.
An excise must be paid within 30 days of the issuance of the bill. Any unpaid bill accrues interest at a rate of 12% per annum from the 31st day to the date of payment. The following steps for collection are set forth in M.G.L. Ch. 60A Sec. 2A:
Excises are prorated on a monthly basis. If a motor vehicle is registered after the beginning of any calendar year, no excise will be imposed for those months, if any, which have fully elapsed before the vehicle is registered. If a vehicle is registered for any part of a month, however, the excise will be due for all of that month. The annual excise due on a vehicle registered after January 1 will be reduced, therefore, by one-twelfth of the full year’s excise for every month prior to the month in which the vehicle was registered.
The following example illustrates the calculation of the excise due on a vehicle registered after January 1.
Example: A vehicle is registered on March fifth. If that vehicle had been registered for the entire year, the excise due would have been $360.00. Therefore, the amount due should be reduced as follows:
Where, as in this example, a vehicle is registered after January first, the Registry performs a proration, automatically, in its calculation of the excise amount due for that calendar year. Therefore, the bill or billing information prepared by the Registry for that vehicle will provide the correct amount due. Local assessors do not have to perform the calculations, themselves.
A registrant who cancels a registration during a calendar year may qualify for a partial abatement. To be eligible, however, such a registrant must also either (a) transfer title to the vehicle or (b) move out of Massachusetts and register the vehicle in some other jurisdiction. For a registrant who so qualifies, the assessors, not the Registry, must calculate the amount of the abatement for which the registrant is eligible. A registrant will never qualify for an abatement on any vehicle for any month during which the vehicle was registered for any portion of that month.
The minimum motor vehicle assessment which may be made is $5.00. Therefore, if the value of a vehicle produces an excise amount less than $5.00, an assessment of $5.00 must be made.
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. Prior to 1981 the rate was $66 per thousand. With the passage of Proposition 2 1/2 the rate was set at $25 per thousand. The excise is levied for a full calendar year and is assessed by the community where the motor vehicle is customarily garaged. In those instances where vehicles are registered in the Commonwealth but garaged outside of Massachusetts, the Commissioner of Revenue assesses the excise which is paid into the State treasury. 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.
To be eligible for a motor vehicle excise exemption, a veteran must, as documented by the United States Department of Veterans Affairs, have actually lost, or have the permanent loss of use of, at least one foot or hand, or have permanent legal blindness in at least one eye, due to his or her military service. A veteran who does not have one of those specific disabilities can also qualify for an excise exemption if the RMV's Medical Advisory Board (MAB) has determined the veteran is permanently disabled due to his or her military service. MGL c. 60A, sec. 1.
Until recently, RMV policy and practice was for the MAB to make the necessary determination of a permanent service-connected disability when a veteran applied for and was issued a disabled veteran (DV) plate. The veteran did not receive a letter or other notice that the MAB had made the required determination. Therefore, as a practical matter, the veteran had to have been issued a DV plate in order to establish he or she qualified for this exemption.
Now, the MAB will issue a letter that states it has determined that the individual is a veteran who has a permanent service-connected disability and is eligible for a DV plate. The veteran may then choose whether to be issued the DV plate. As a result of this change in procedure, a veteran will now be able to establish eligibility for the motor vehicle excise exemption by (1) providing the assessors with a copy of the MAB determination of permanent service-connected disability or (2) having been issued a DV plate. For more information, see Bulletin 2015-01B.
Medical Advisory Board
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 list price in the year of manufacture. 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 manufacturer's list price are as follows:
The excise on any particular vehicle is to be assessed at the place where that vehicle is principally kept, i.e., garaged. The relevant statute, Ch. 60A §6, provides:
“The excise...shall be laid and collected at the residential address of the owner, if an individual, or at the principal place of business in the commonwealth, if a partnership, voluntary association or corporation, as determined by the owner’s registration, except that if a motor vehicle...is customarily kept in some other municipality, the excise shall be laid and collected in such other municipality.”
This statute was drafted with a presumption that any particular motor vehicle is kept for excise purposes at the residence or principal business address of its owner. On the basis of this presumption, the statute sets out two alternatives. It instructs that the excise for the vehicle is to be imposed and collected by the city or town where its owner (a) if an individual, lives, or (b) if a partnership, voluntary association or corporation, maintains its principal place of business unless the motor vehicle is customarily kept in some other city or town.
It is only when the Registry is specifically notified that a vehicle is principally kept in some other municipality that the Registry will include the excise for that vehicle in the commitment for the other municipality. Otherwise, the excise will be included in the commitment of the municipality where the individual lives or the principal place of business is located.
The place where a motor vehicle is principally kept is not identified on the registration certificate for that vehicle. However, that place is identified on the registrant's insurance coverage selection sheet. Therefore, where an issue arises concerning the place of garaging, the assessors should request a copy of this insurance document.