Motor Vehicle Excise Taxes & Abatements
The Assessment Process
Motor Vehicles Subject to Excise
Pursuant to Ch. 60A of the Massachusetts General Laws, every motor vehicle and trailer registered in the Commonwealth is subject to the motor vehicle excise unless expressly exempted.
Basis of the Excise Assessment
The motor vehicle excise is imposed for the privilege of registering a motor vehicle. Registering a motor vehicle automatically triggers the assessment of the excise.
Calculation of the Excise Amount
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 a vehicle for the purpose of the excise is the applicable percentage for that year of the manufacturer's suggested retail price for that vehicle. The applicable percentages are set out in Ch. 60A S1 as follows:
| In the year preceding the year of manufacture: | 50% |
| In the year of manufacture: | 90% |
| In the second year: | 60% |
| In the third year: | 40% |
| In the fourth year: | 25% |
| In the fifth and succeeding years: | 10% |
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 calculating the motor vehicle excise.
Abatements
The rules and laws relating to abatements of the motor vehicle excise are set out in Ch. 60A S1. The authority to abate an excise lies in the Board of Assessors. No other person may grant an abatement. While assessors possess jurisdiction to abate a motor vehicle excise only if an application for abatement is timely filed.
Pro-ration
Motor vehicle excises are pro-rated on a monthly basis. For each month that the assessors allow an abatement on a motor vehicle, the excise due on that vehicle is reduced by an amount equal to one twelfth of the annual amount which would otherwise have been due, multiplied by the number of months during which the vehicle was not registered. Except in the case of an overvaluation, a condition precedent to the granting of an abatement is the cancellation of the registration on a motor vehicle. Where a requisite for an abatement is such cancellation, an abatement cannot be given for any month during the vehicle was registered for any period of time.
Cancellation of Registration
Canceling the insurance policy on a motor vehicle does not effect a contemporaneous cancellation of the registration on that vehicle. Rather, to cause a cancellation, a registrant should deal directly with the Registry of Motor Vehicles, either in person, by phone or by mail.
To effectuate a cancellation on a particular vehicle, a registrant should return the license plates to the Registry and receive a Plate Return Receipt. A registrant who does not have possession of those plates should obtain from the Registry a Form C19, "Lost Plate Affidavit for Cancellation of Registration." Obtaining either a Plate Return Receipt or a processed Form C19 will effectuate a cancellation of the registration on that vehicle.
An insurer, in order to cancel or revoke an insurance policy on a motor vehicle, must give electronic notice to the Registry. If the Registry does not receive a new certificate of insurance covering the same vehicle within the following twenty-three days, it will mail notice to the registrant that unless a new certificate is provided within the ensuing ten days, the registration on that motor vehicle will be revoked.
Minimum Abatement
The minimum motor vehicle abatement which may be made is five dollars. If a registrant otherwise qualifies for an abatement but the amount of that abatement is less than five dollars, no abatement may be made.
Some Circumstances Which Allow Assessors to Exercise Abatement Authority
Where assessors possess jurisdiction to make abatements, they may exercise that authority in the following circumstances:
- A Vehicle is Over-Valued – This procedure is based upon the manufacturer's list price for that vehicle, discounted by the designated percentage which accords with the age of the vehicle. However, that statute permits the assessors to abate that value if, in the opinion, the value so determined is excessive. Assessors should rarely exercise this abatement authority and, then, only in the case of some extraordinary circumstance unique to a particular vehicle. If, for example, a vehicle were substantially damaged due to an accident or other cause and were not repaired, the assessors could lawfully abate its value. In the absence of some extraordinary circumstance, however, a value properly calculated should not be altered because valuing all motor vehicles using a uniform procedure ensures equity and regularity in the assessment process.
- A Registrant Transfers Title to a Vehicle and Cancels the Registration on that Vehicle – Ch. 60A S1 makes an abatement available if "during a calendar year ownership of a motor vehicle…is transferred by sale or otherwise and its registration is surrendered." Two actions are necessary for qualification for this abatement eligibility. A vehicle owner must both (a) convey title to the vehicle and (b) cancel the registration on that vehicle. The performance of one of these actions, alone, does not qualify a person for an abatement. Therefore, a person who cancels the registration on a vehicle during a calendar year but does not convey title to the vehicle is not entitled to an excise abatement for any part of that year. For the succeeding fiscal year, the vehicle should be assessed as personal property. A transfer of title may be made by gift, sale, repossession or any other action which conveys ownership from the registrant to some other person. In processing an application for abatement under this provision, assessors should require that they be presented with a copy of a bill of sale or some other document which establishes that a transfer has occurred. If a registrant claims abandonment of a vehicle at a junk yard or some other place of disposition, that registrant must present evidence thereof, such as a receipt from the owner of the junk yard. If an insured vehicle is totaled in an accident and settlement is made for the full value of the vehicle, title passes to the insurance company by right of subrogation (legal doctrine of substituting one creditor for another). In such a case, the month the insurance company makes payment to the insured is the month that title transferred. Generally, the assessors should require a plate return receipt to show evidence of cancellation of registration. However, in some circumstances, such as when a vehicle is totaled in an accident and the vehicle is removed to a junk yard, it may not be possible for the owner to retrieve the plates. In such circumstances, the registrant should cancel the registration on that vehicle using Registry of Motor Vehicle Form C19. Filing this form with the Registry will eliminate future billings on the vehicle. Otherwise, excise bills will issue until the registration expires. Whenever the performance of more than one activity is required to establish eligibility for an abatement, the proper date for use in calculating the amount of the abatement is that date when the final one of the activities is performed.
- A Registrant Moves Out of State and Registers in Some Other State or Country – A registrant is eligible for an excise abatement who "during a calendar year…removes to another state and registers such motor vehicle or trailer in such other state and surrenders or does not renew his registration in this state." (G.L. Ch. 60A S1. Emphasis supplied.) As above, two actions are also necessary for abatement eligibility under this provision. A person must have (1) registered his vehicle in some other state and (2) surrendered his Massachusetts registration. Although, assessors should generally require a person to present to them a plate return receipt as evidence of cancellation of his Massachusetts registration, this requirement should be abandoned in the case of a state (e.g., Arizona and California) which, when issuing a registration, confiscates the plates of any other state in which the vehicle may be registered at the time. In such a case, proof of registration in that state is sufficient evidence of the registrant's cancellation of his Massachusetts registration. The date of registration in the other state could appropriately be deemed the date of surrender of the Massachusetts registration for purposes of the relevant abatement provision under Ch. 60A S1. Of course, if a person does not cancel his registration in Massachusetts using a Form C19, excise bills will continue to issue until the registration expires.
- A Person Sells or Trades a Motor Vehicle, Cancels the Registration on that Vehicle and Subsequently Transfers the Registration to Some Other Vehicle in Same Month – If a person sells or trades a vehicle, cancels the registration on that vehicle and transfers that registration to another motor vehicle in the month of cancellation, the excise may be fully abated on the transferred vehicle for that month. Otherwise, the person would be liable for two excises on the same registration for the same month. Such a person is not liable for a minimum $5.00 assessment on the transferred vehicle.