Massachusetts Motor Vehicle Excise Tax: What You Pay and Why It Matters

Every March, cities and towns across Massachusetts issue motor vehicle excise tax bills to residents. Unlike vehicle registration fees, which arrive on individual anniversaries, these bills arrive simultaneously, making the tax unavoidable. For one Massachusetts resident, the arrival of 12 envelopes served as a reminder of their automotive passion.

In the photograph accompanying this article, 12 tax bills are visible—down from 14 the previous year. The vehicles subject to these bills include three daily drivers and nine Hagerty-insured collector cars:

• The three daily drivers: a 2003 BMW E39 530i, a 2013 Honda Fit, and a 2008 Nissan Armada.
• The nine Hagerty-insured cars: three BMW 2002s, an E9 3.0CSi coupe, the "FrankenThirty," a Z3 roadster, a Z3 M Coupe nicknamed the "clown shoe," and two vintage Lotuses.

The excise tax itself is calculated as 2.5% of a vehicle’s fully-depreciated value. Once a car reaches five years of age, the state considers it 90% depreciated. For example:

• A 20-year-old car originally priced at $30,000 would have a fully-depreciated value of $3,000, resulting in an annual tax of $75.
• A 60-year-old car originally priced at $3,500 would incur an annual tax of $8.75.
• A top-tier German luxury vehicle originally priced at $130,000 would cost $325 annually.

For the owner in question, the most expensive annual excise tax bill was $103 for the 2003 BMW 530i. Reverse calculations suggest a depreciated value of $4,120 and an original price of $41,200—an estimate that aligns closely with the car’s actual value. The next-highest bill was $95 for the 2008 Nissan Armada, with a depreciated value of $3,800.

The vintage cars, however, incurred minimal taxes, making the total annual excise tax bill for all 12 vehicles $618. This amount is roughly equivalent to the cost of a single repair bill, highlighting the financial commitment of maintaining a collection of cars.