Costs and Taxes for Motor Vehicles
Massachusetts has a sales and use tax on buying or transferring motor vehicles or trailers of 6.25%. The excise tax is $25 for every $1,000 of the vehicle’s value based on the manufacturer’s listing price for the year it was made.
To calculate the sales tax on a used car, find the total sales tax fee for the city which is a minimum of 7.25%. Multiply the vehicle price by the sales tax fee before trade-in or incentives. For example, a $20,000 vehicle with a 7.25% tax fee equals $1,450.
Massachusetts has a trade-in tax credit. With a $10,000 trade-in towards a $20,000 new car, the taxable amount is the $10,000 difference. This saves on the sales tax versus tax on the full $20,000 price. Rebates and incentives also reduce the taxable purchase amount.
Registration Fees
Registration renewal fees in Massachusetts are $60 for passenger vehicles and light trucks for 2 years. Initial registration is $60.
- Adding or removing a lien holder is $25.
- Transferring a certificate of title is $75.
- Registration gift tax transfer is $25.
To register a vehicle in Massachusetts, residents need to provide:
- Proof of insurance
- Vehicle title
- Odometer disclosure statement
- Payment for registration fees
Massachusetts allows 7 days to register a newly acquired vehicle after disposing of the previous one.
Additional Information
If you purchase a vehicle outside of Massachusetts and bring it into the state within 6 months for permanent use, a use tax is due the 20th day of the following month.
To obtain an RMV copy of registration in MA, motorists may submit requests online, in person or by phone. Replacement credentials are received within 10 days.
You can deduct sales tax paid on a vehicle purchase in 2018 for a Schedule A deduction. However, you can only claim sales taxes or state and local income taxes paid.