How is sales tax calculated on a used car in massachusetts

Massachusetts enforces an excise tax each year for people who have vehicles registered in the state. The car's value is based on the manufacturer's listing price for the year the car was manufactured.

The following is a chart of how the value is determined:. Most people who buy a car in Massachusetts will be required to pay the sales tax within 10 days of purchasing the vehicle, according to Sapling. This is also true when a car is transferred to another person in the state. Individuals must make their vehicle sales tax payment to the Registry of Motor Vehicles. The total you get after these subtractions is what you will be required to pay tax on. However, if your vehicle was purchased from a private individual or dealer who is not registered through the Massachusetts Department of Revenue, the vehicle's value will be determined based on the National Automobile Dealer's Association's valuation of it.

You can find the valuation of your vehicle with the National Automobile Dealer's Association by going to their website and inputting your car's information. When using the NADA to determine your vehicle's trade-in value, you will use the highest value listed. This ensures that dealers do not use too low of prices to illegally reduce tax requirements. If you cannot find a clean trade-in value for your vehicle, the Registry of Motor Vehicles and the Department of Revenue will come to an agreement regarding your vehicle's valuation.

This valuation is what will be used for your taxes. Knowing everything that may affect the tax and fees you pay on a vehicle in Massachusetts can help you be better prepared when going into a deal.

The states with no car sales tax include:. The minimum sales tax states are:. You must pay sales tax when you lease a car. In most states, you pay sales tax on the monthly lease payment not the price of the car. If you live just across the border from a state with little or no sales tax, it might be tempting to buy your car out of state to save money on sales tax. While there are other reasons to consider buying a car out of state , you will not save money on sales tax by buying a car in a state with low or no sales tax.

You must pay the sales tax for the state you will register your car in, which is the state you live in. However, there are a few legal ways to avoid paying sales tax on a car. Check out which states are the best to buy a car in. In many states, you can get a sales tax credit based on the value of your trade-in. Depending on the amount of your appraisal, you may be able to get more money trading to the dealership than selling your car on your own. We've created a calculator that will tell you the tax credit amount and help you determine whether it's better to trade-in to the dealership or to sell your car privately.

Tax information and rates are subject to change, please be sure to verify with your local DMV. See all Car Deals for November ». Best Cash Back Deals. Best Lease Deals. Let us know in a single click. We read every comment!

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