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What Is A Motor Vehicle Excise Tax?

By September 13, 2021April 12th, 2023No Comments

a person in a car posing for the camera


What Is A Motor Vehicle Excise Tax?

Did you recently purchase a new car to celebrate returning back to the office? Maybe you surprised your teen with a used car to help them get to school and back.

Regardless of why you purchased a new motor vehicle, you have. Congrats!

Not only do you need to call your local Gaudette Insurance agent to purchase the proper coverage, it’s also important to remember how your yearly motor vehicle excise tax will be affected.

What Is A Motor Vehicle Excise Tax?

A motor vehicle excise tax is an annual tax for the registration of your motor vehicle. Anyone who registers a vehicle with the RMV will be billed based on the information given on your registration application. When you receive your motor vehicle excise tax, you will also receive information on how to pay it.

To learn more about how to pay, we suggest:

What Is Considered A Motor Vehicle?

“Motor vehicles” are defined as “all vehicles constructed and designed for propulsion by power other than muscular power including such vehicles when pulled or towed by another motor vehicle,” according to the Massachusetts Department of Revenue. This excludes:

  • Trains and trolleys

  • Vehicles used for purposes other than transporting property and that are incapable of being driven at a speed more than 12 miles per hour

  • Automatic wheelchairs

  • Motorized bikes

Who Pays the Excise Tax?

The excise tax is billed to anyone with a Massachusetts license plate.

How Much Do I Owe?

Based on the rates set by the state of Massachusetts, vehicles are valued based on:

  • 50% of the manufacturer’s price the year preceding the designated year of manufacture (example: a brand new car released before model year)

  • 90% in the year of manufacture

  • 60% in the second year of manufacture

  • 40% in the third year of manufacture

  • 25% in the fourth year of manufacture

  • 10% in the fifth and all succeeding years of manufacture

It is important to note that the minimum excise tax bill is $5 and the excise tax rate is $25 per $1,000 of assessed value.

What Happens if I Sell My Car?

This is called an exercise abatement. Excise abatements happen when a vehicle is sold, traded, or donated with the year, or has been registered in another state.

For more information, visit the Excise Abatement Form.

To learn more about what the excise tax is, and how to be prepared for it, call your local Gaudette Insurance agent or visit