How car sales tax works in Massachusetts
Massachusetts charges a flat 6.25% sales or use tax on cars, with no local add-on. You pay it to the RMV when you register and title the car, within 10 days of buying it.
- Trade-in credit at a dealer: the trade-in value is subtracted before tax. A trade-in gives no credit on a private sale.
- Manufacturer rebates applied at the sale reduce the tax. A rebate you receive later, after the sale, does not.
- The doc fee is taxable. Massachusetts does not cap it, but the title preparation part is limited to $5.
- Private sales use book value: you pay 6.25% of the higher of the price or the NADA clean trade-in value, adjusted only for mileage. The car's condition does not lower the value.
- Family: sales or transfers to a parent, spouse, child or sibling are exempt if Massachusetts tax was paid before. Gifts with no payment are exempt too.
- New residents: no tax if you bring the car in more than 6 months after you bought it. Within 6 months, you pay any difference from the tax paid in the other state.
Title and registration fees in Massachusetts
| Fee | Amount |
|---|---|
| Certificate of title | $75 |
| Passenger registration (2 years) | $60 |
| Registration transfer from your old car | $25 |
| State inspection (within 7 days) | $35 |
| Electric vehicle fee | $0 |
Registration costs the same for every passenger car, whatever its weight or price. After you buy, your city or town bills the yearly motor vehicle excise: $25 per $1,000 of value, where the value is a set percentage of the original list price (90% in the model year, then 60%, 40%, 25% and 10%).
Example: a $32,000 new car
Price $32,000.00, $1,000.00 manufacturer rebate, $8,000.00 trade-in and a $499.00 doc fee, bought from a dealer:
| Sales and use tax (6.25%) | $1,468.69 |
| Title fee | $75.00 |
| Registration fee | $60.00 |
| State safety and emissions inspection (within 7 days) | $35.00 |
| Total taxes | $1,468.69 |
|---|---|
| Total government fees | $170.00 |
| Out-the-door price | $33,137.69 |
| After the trade-in, you pay | $25,137.69 |
Common mistakes
- Expecting a private-sale car to be taxed on a low price when its NADA clean trade-in value is higher.
- Counting on a manufacturer rebate you will receive after the sale to lower the tax (only rebates applied at the sale do).
- Forgetting the yearly motor vehicle excise of $25 per $1,000, based on the list price, not what you paid.
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