Massachusetts is one state which doesn’t drain your wallet while buying a new or a used car. But there are some expenses that you can’t avoid while buying a car in the state – like the MA sales tax on cars. How much is it? Is there a way that you can avoid sales tax for cars in MA? Our article has decoded everything you need to know about it!
How Much Is the Car Sales Tax in MA?
Whether buying a new or a secondhand car, the MA sales tax on cars is 6.25%. The state doesn’t charge city or county taxes compared to a few other states. Considering all these factors, Massachusetts’ car sales tax rate ranks in the mid of the pack compared to the rest of the country.
Does a Trade-in Reduce Car Sales Tax in Massachusetts?
Yes. Trading in your old car to buy a new one is one way by which you can reduce the MA car sales tax. For instance, imagine you’re buying a car worth $25,000. And you’re trading in your old car for a credit of $4,000. So, the sales tax rate of 6.25% will only apply to the final buying price of $21,000 (after subtracting the trade-in value from the sticker price). So, you save tax on $4,000.
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Rebates and Incentives
Many dealers offer discounts and incentives to promote sales when buying a new car. For instance, your dealership may offer you a $2,000 rebate on buying a car worth $25,000. Fortunately, the MA sales tax on cars is calculated after applying the rebates and incentives. So, you’ll have to pay the tax after deducting the rebate amount from the original sticker price.
How to Calculate Sales Tax on a Car in MA?
Calculating the sales tax rate is very simple. All you must do is add 6.25% to the sticker price of your car, deducting any trade-in credit or rebate if required.
How Much Is the Sales Tax on a Used Car in Massachusetts?
Yes. MA used car sales tax of 6.25% applies when you buy a secondhand car.
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Do I Have to Pay Sales Tax on a Gifted Car in Massachusetts?
No. You’ll be exempt from MA sales tax on cars if you receive your car as a gift.
How Do I Avoid Paying Sales Tax on a Car in Massachusetts?
There are only a few instances where you can avoid paying the MA car sales tax.
- Vehicles transferred through a contest, lottery, or raffle are exempt.
- There’s an exemption on paying the sales tax if you received the car as a gift.
- There is no sales tax if a car is transferred to and from a business entity.
Does Private Car Sale Get Taxed in MA?
Yes. Private car sales also incur a sales tax rate of 6.25%. For instance, if you buy a new car worth $30,000, the final buying price will be $31,875 if there is no trade-in credit or rebates.
Do I Have to Pay Sales Tax on My Car When I Move to Massachusetts?
You’re exempt from paying the tax if you bought the car and registered in another state for more than six months while you were a resident of that state. Also, if you bought the car in MA more than six months ago, but it was delivered to you outside of the state by the seller, you needn’t pay the tax.
Do NH Residents Pay MA Sales Tax on Cars?
No. You don’t have to pay the sales tax rate if you’re a resident of New Hampshire. If you’re buying the car via a car dealer in Massachusetts, they know how to handle the documentation part.
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What Other Fees Must You Pay While Buying a Car in Massachusetts?
It isn’t just the sales tax rate that surges your buying price. While buying a car in the state, you must also be aware of these charges.
| Category | Fee |
| Title | $50 |
| Registration | $128-$180 |
| Plate transfer | $10 |
| Documentation | $295 |
The dealers will also charge you the documentation fee, or the “doc fee,” to cover the costs of finishing and filing the sales contract, sales tax forms, etc. The state law doesn’t limit the doc fees a dealer can collect from you. Since the dealers fix this rate rather than the government, they might differ from one dealership to another or even between car models.
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