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Massachusetts Vehicle Sales Tax & Fees [+Calculator]
Michael Collado is a car buying expert and has been a professional automotive writer since 2009. He’s written about dealership sales, vehicle reviews and comparisons, and service and maintenance for over 100 national automotive dealerships. Previously, Collado was a copywriter at the ad agency TBWA/Chiat/Day where he worked on brand campaigns for Nissan, ABC Television, Sony PlayStation, and Energizer. His recognition in the ad industry includes awards from Communication Arts and The Clios.
Collado has a Bachelor’s degree from the University of South Florida, with a major in Psychology and a minor in Marketing.
If you are looking to purchase a vehicle in Massachusetts, then you will want to know about the sales tax that you may have to pay.
The state sales tax can affect the final purchasing price of your vehicle. Because of this potential expense, many people want to know if tax exemptions or if buying a car out of state can help.
Here, we will take a look at the current information on Massachusetts sales tax on vehicle sales.
How Much Is the Car Sales Tax in Massachusetts?
The sales tax for vehicle sales in Massachusetts is 6.25%. There are no additional local or county tax rates in Massachusetts.
How to Calculate Massachusetts Sales Tax on a Car
To calculate the sales tax on your vehicle, find the total sales tax fee for the city and/or county. In Massachusetts, this will always be 6.25%. Multiply the vehicle price (after trade-ins and/or incentives) by the sales tax fee.
For example, imagine you are purchasing a vehicle for $30,000 with the state sales tax of 6.25%. You trade-in a vehicle for $10,000 and get an incentive for $2,000. Massachusetts does not charge tax on trade-ins and rebates, so you would subtract $12,000 from the car cost, to get $18,000, which is the taxable amount.
In this example, multiply $18,000 by .0625 to get $1,125, which makes the total purchase price, $19,125.
Caculate Car Sales Tax in Massachusetts Example
- Initial Car Price: $30,000
- Sales Tax Rate: 6.25%
- Trade-In Amount: $10,000
- Rebate/Incentive Amount: $2,000
Sales Tax = ($30,000 - $10,000 - $2,000) * .0625
Sales Tax = $1,125
Remember that the total amount you pay for a car (out the door price) not only includes sales tax, but also registration, and dealership fees.
Massachusetts Sales Tax Calculator
Do I Have to Pay Sales Tax on a Used Car?
Yes, all used car sales are subject to a 6.25% sales tax.
Which County Has the Highest Tax? Which Has the Lowest?
There is no additional sales tax at a local level in Massachusetts. Therefore, you will pay a flat 6.25% in each county.
Car Sales Tax for Trade-Ins in Massachusetts
You do not have to pay a sale tax on the trade-in on your vehicle in the state of Massachusetts.
In other words, when calculating sales tax, be sure to subtract the trade-in amount from the car price.
Let’s say that you're purchasing a new car for $45,000 and your trade-in is valued at $15,000. This would put your new vehicle purchase price at $30,000, which is the taxable amount.
Car Sales Tax on Private Sales in Massachusetts
Private car sales are taxed at the same 6.25% rate.
As an example, if you were to purchase a car from a private owner for $25,000, then you would pay 6.25% of the purchase price or $1,562.50. That would bring the total purchase price up to $26,562.50.
Tax on Rebates & Dealer Incentives
The state of Massachusetts does not tax rebates and dealer incentives. In other words, be sure to subtract the incentive amount from the car price before calculating the sales tax amount.
As an example, let’s say you want to purchase a new truck for $32,000 and the dealer provides a $4,000 rebate. You do not have to pay a sales tax on the $4,000 rebate. Therefore, the taxable amount is $38,000.
Massachusetts DMV & State Fees
- Registration Fee: $60.00 per year
- Title Fee: $25.00
The following drivers are exempt from paying a registration fee:
- Disabled Veteran
- Emergency Vehicle
- Ex-POW
- Gold Star Family
- Bronze Star Recipient
- Medal of Honor Recipient
- Legion of Valor Recipient
- Distinguished Flying Cross Recipient
Massachusetts Dealership Fees
The average dealership fee in Massachusetts is about $340, and there is no statewide limit. However, additional fees such as advertising and transport fees can be negotiated.
When Sales Tax Is Exempt in Massachusetts
If a vehicle is transferred to and from a business entity, then there is no sales tax. Vehicles that are transferred by a contest, drawing, or raffle are exempt.
Also, if the vehicle is given as a gift, then the sales tax can be waived.
If you are disabled and have suffered a loss in both legs, both arms, or 1 leg and 1 arm, then you do not have to pay the sales tax.
Massachusetts EV Rebates & Incentives
Under the MOR-EV statewide program, EV purchasers are eligible for a $2,500 rebate on vehicles that cost less than $50,000. Those who purchase a hybrid vehicle can receive a rebate of up to $1,500.
The federal EV tax credit is still available for cars purchased in Massachusetts.
Tax information and rates are subject to change, please be sure to verify with your local DMV.
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