A 6.25% sales tax is charged in Massachusetts when registering any motor vehicle for personal use. The tax is collected by the Registry of Motor Vehicles (RMV). Since Massachusetts has no local sales taxes, the tax does not vary by location.
Sales tax in the state also applies to:
- New and used vehicles
- SUVs, trucks, and motorcycles
- Recreational vehicles (for personal use only)
- Leasing and out of state vehicles (Massachusetts will register and motor tax)
Tax Estimation for a New Auto
The following tax estimation can be used for a 30,000 automobile purchase:
- $30,000 x 6.25/100 = $30,000 x 0.0625 = $1,875
- Total taxes: $1,875
Note that in addition to $1875, the RMV will charge document fees, and additional fees for title transfer and registration.
What Reductions / Exemptions May Apply?
There are some situations that may lessen or eliminate sales tax completely:
- Tax Trade In: When you trade in a vehicle, you only incur sales tax on the remaining amount owed after the trade-in.
- Military: Active military personnel stationed in Massachusetts may be eligible for some military sales tax exemptions.
- Government and Nonprofit Purchase: Some government or nonprofit organization purchases may be tax-exempt for official use with the appropriate paperwork.
Vehicle Purchase Out-of-State
When you buy a car from somewhere in the country that is not Massachusetts, you will be charged a use tax for bringing it to Massachusetts, which is equivalent to the state sales tax of 6.25%.
The tax is based on either:
- The purchase price of the car, or
- If the purchase price is very low, the tax will be based on the actual value of the car.
This is to make sure that the vehicles registered in Massachusetts are all subject to the laws, regardless of where the boundaries are.
Not sure how much tax you’ll really owe on your car purchase? Talk to a Massachusetts tax expert today and get clarity before you register.