All motor vehicle owners in Massachusetts must pay a yearly excise tax for the privilege of registering a vehicle. The excise tax rate is $25 for every $1,000 of your vehicle’s value.

From personal property taxes to sales tax, taxes can be confusing—but you need to know about them because the consequences of not paying could be serious. Here to walk you through the requirements of the Massachusetts excise tax is

Jerry

, the trusted car insurance broker that saves Bay State drivers hundreds of dollars on

auto insurance

each year.

In this guide, we’ll cover everything you need to know about the excise tax: who it goes to, how much you owe, and what happens if you don’t pay. To round it off, we’ll also show you how to find

cheap Massachusetts car insurance

that could free up your finances to absorb that annoying excise tax.

What is an excise tax in Massachusetts?

Anyone registering a motor vehicle in Massachusetts must pay an excise tax bill every year to the local tax assessor’s office. This tax is different from the

Massachusetts car sales tax

, which applies only when you purchase the car.

An excise tax is levied against manufactured goods—often those which pose some kind of health or environmental threat. That’s why cigarettes and alcohol are also subject to excise taxes. In the case of motor vehicles, the environmental damage caused by emissions justifies this tax.

The exact requirements for the Massachusetts excise tax are laid out in

Chapter 60a

of the Massachusetts General Laws (M.G.L.), but we’ll break them down here so you don’t have to wade through all that legalese:

The Massachusetts excise tax rate is $25 per $1,000 of your vehicle’s value

The minimum excise tax that can be levied is $5

The excise tax rate is based on a percentage of the manufacturer’s list price (or MSRP) in the designated year of manufacture—not purchase price or assessed value

The excise tax is charged for a full calendar year

You’ll be sent an excise tax bill every year with instructions for payment. This tax goes directly to the tax collector’s office in the municipality where your vehicle is garaged—not to the Massachusetts Registry of Motor Vehicles (RMV). It’s due 30 days from the issue of the bill, and it’s better to pay as early as possible. The tax collector must receive the payment by the due date—if it’s only sent or postmarked on that date, your payment will be considered late.

For extra detail on the Massachusetts excise tax law, go to the

Massachusetts Department of Revenue’s guide

on mass.gov.

MORE:

Massachusetts gas tax

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Calculating your excise tax payment

Your motor vehicle excise bill will include a payment amount, but if you want to know in advance how much your tax will be—or if you suspect you’ve been billed the wrong amount, refer to the table below to calculate your excise tax rate.

Year you bought your vehicle	Vehicle valuation
Year before the model year (e.g. a 2023 model purchased in 2022)	50% of MSRP
Model year	90% of MSRP
Second year after model year	60% of MSRP
Third year after model year	40% of MSRP
Fourth year after model year	25% of MSRP
Fifth year and all succeeding years	10% of MSRP

Let’s say you purchased a 2021

Honda Accord

in 2022. Assuming an original MSRP of $24,970, the value of your vehicle for the purposes of excise tax would be $14,982. Excise tax for that vehicle would be approximately $350.

Penalties for nonpayment

Not paying your excise tax will result in some expensive penalties. The most serious? If you delay paying your bill long enough, the tax collector can actually prohibit the renewal of your driver’s license and vehicle registration, leaving you without a vehicle.

The tax collector can also add a 12% annual interest rate to your original bill, racking up additional debt on top of the tax itself. In addition, you could be liable for the following collection costs:

Demand for payment: up to $30

Issuance of warrant to collect to deputy collector: $10

Notice of warrant to collect: $12

Serving warrant to collect: $17

Marking vehicle registration and license for nonrenewal: $20

In other words, nonpayment could cost you an additional $89 on top of the original fee and interest.

Partial payment can be submitted for the excise tax—but it will only be accepted at the individual tax collector’s discretion. Even if your local tax collector does accept a partial payment, it’ll go to interest first, then to collection costs, and to the actual outstanding excise last. If the interest and collection costs are less than $15, however, the tax collector may choose to waive them.

MORE:

How to get a temporary license plate in Massachusetts

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How to avoid excise tax in Massachusetts

In most cases, you can’t get out of paying excise tax in Massachusetts. There’s no statute of limitations on this tax, which means you’ll continue to owe any unpaid tax (plus interest and collection costs!) until it’s paid.

However, certain taxpayers may be eligible for an exemption. Most exemptions are for governments, charitable or religious organizations, and manufacturers or farmers using special plates, but exemptions are also available for:

Former prisoners of war and their surviving spouses (subject to documentation and local approval)

Disabled or blind veterans

Massachusetts servicemembers

Disabled or blind persons

If you’re eligible, you can only have an exemption on one vehicle at a time, and you’ll need to file your

abatement application form

with the local board of assessors within three years after the tax was due or within one year after the tax has been paid—whichever comes last.

You can use the same form, or

a shorter version

, to apply for an abatement—that is, a reduction in the amount of excise tax you owe. Common reasons for an excise abatement include:

If you moved to a new state midway through the year (considered a cancellation of your Massachusetts registration)

If you moved out of the billing area midway through the year

If your vehicle was overvalued

If you transferred the title or registration of the vehicle during the calendar year

If your vehicle was stolen

To get an abatement for any of these causes, you’ll need to provide documentation of the circumstances (e.g. a plate return receipt, new registration from a different state, or bill of sale from a transaction).

MORE:

Gifting a car in Massachusetts

How to save on car insurance in Massachusetts

Insurance companies typically charge Massachusetts drivers lower rates than in other states—so if you’re paying more than you want to, there’s a good chance there’s a better option out there for you.

But how to find it? Simple: download the

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