MA Auto Excise Tax !

[holden125]

Originally Posted by crazyworld

I have a '05 Camry husband has a 2000 Explorer.

Once you get to 5 years old, both cars are assessed on 10% of the original bluebook value. If the Explorer cost more new than the Camry, the tax will be more on the Explorer. Starting in 2010, the Camry should have the exact same tax bill every year for as long as you have it. I imagine you've already seen the Explorer's bill stay the same for a while.

When the Camry was 4 years old, the tax was assessed on 25% of the original value. If the Explorer was considerably more expensive new, 10% of its original MSRP could be more than 25% of the Camry's.

[crazyworld]

Holden thank you very much for explaining that to me...it makes sense now.

[LeavingMA]

I don't understand why someone with a new or newer car should pay more money for excise tax than a car that is 5 or 10 years old. A new car isn't doing any more damage to the roads than an old one would do. Wouldn't it be better if the excise tax was just based on how many vehicles you have. So everyone might just pay a flat rate of $150 for each car they have. I really wish there was no excise tax, but I don't understand why if you buy a new car you should pay more. When you buy a new or more expensive car they already got you for more money with the sales tax...so your essentially being double hit. Almost as bad as they tax your income and then tax the same money again if you put into your savings account.

[holden125]

Originally Posted by LeavingMA

I don't understand why someone with a new or newer car should pay more money for excise tax than a car that is 5 or 10 years old. A new car isn't doing any more damage to the roads than an old one would do. Wouldn't it be better if the excise tax was just based on how many vehicles you have. So everyone might just pay a flat rate of $150 for each car they have.

I guess the idea is that people who can afford a more expensive new car are better positioned to pay more, but the system definitely does disfavor newer cars, which may be bad policy environmentally. I don't know how feasible it is, but maybe something based on miles driven. Like three tiers? $100 a car if it's under a certain level, $150 if it's over, $200 if it's over an even higher threshold? They could assess it based on the odometer reading at inspection.

[crazyworld]

The system I agree is strange...my son, a few months ago, bought off of his cousin a Saab that he was getting rid of and he paid 800.00 for it. When he went to the registry the tax he had to pay on it wasn't on the 800.00, he had to pay the tax based on the Blue Book Value. That really stinks.

[holden125]

Originally Posted by crazyworld

The system I agree is strange...my son, a few months ago, bought off of his cousin a Saab that he was getting rid of and he paid 800.00 for it. When he went to the registry the tax he had to pay on it wasn't on the 800.00, he had to pay the tax based on the Blue Book Value. That really stinks.

I think they want to keep it simple, based on the original value, instead of having to go through everyone's actual sale price and argue about it all day long.

A lot of people could avoid the tax with sweetheart deals with relatives, etc. Like I buy the car, pay the tax, then sell it to my sister next year for $100. Then she tells the town she owes $2.50 in tax on the car based on what she paid, rather than the $300 she would owe under the current system. Imagine if we bought the same car, and I "sold" mine to her for the same price and avoided tax also.

If the $800 Saab was a few years old, your son would only have to pay on a small percentage of the Blue Book value.

[crazyworld]

True but if I were to buy something in the store then I would be taxed on the purchase price. It should be the same when you purchase a car. You would have a bill of sale from the purchase of the car.
I understand the excise tax since you explained it to me but as far as the registry doing blue book value personally I think it is wrong.

[holden125]

Originally Posted by crazyworld

True but if I were to buy something in the store then I would be taxed on the purchase price. It should be the same when you purchase a car. You would have a bill of sale from the purchase of the car.
I understand the excise tax since you explained it to me but as far as the registry doing blue book value personally I think it is wrong.

Yeah, they do go by actual sale price when you pay the sales tax, but the excise is not exactly a sales tax. It's like an ownership fee. For property taxes they also evaluate the value of what it is you own, but I think it would just be too much work to evaluate every car individually just to collect somewhere from $25 to a few hundred.

[neil0311]

Originally Posted by LeavingMA

I don't understand why someone with a new or newer car should pay more money for excise tax than a car that is 5 or 10 years old. A new car isn't doing any more damage to the roads than an old one would do. Wouldn't it be better if the excise tax was just based on how many vehicles you have. So everyone might just pay a flat rate of $150 for each car they have. I really wish there was no excise tax, but I don't understand why if you buy a new car you should pay more. When you buy a new or more expensive car they already got you for more money with the sales tax...so your essentially being double hit. Almost as bad as they tax your income and then tax the same money again if you put into your savings account.

What you ask is a good question, and some states don't charge a value based tax on property such as cars, but many do. Of course, the same question could be asked of homes and real estate....why do I pay more because my home is larger or nicer inside or has more land surrounding it?

Will I use more town/city services because my kitchen is nicer or my basement is finished...no.
Will my children get a better education than the children who live in the less valuable home....no.
Will the fire and police depts respond to my 911 calls faster...no.
Will my roads get plowed and sanded more often...no.