How to Figure Sales Tax for a Car in Massachusetts
According to the Massachusetts Department of Revenue website, before August, 2009, the sales tax on a vehicle purchase was 5 percent. After this date, the vehicle sales tax became 6.25 percent, either collected by a dealership at the time of purchase or during the registration process if purchased privately. The Massachusetts's Registry of Motor Vehicles charges the NADA trade-in value if the purchase price of the vehicle is lower than it should be, but charges whichever amount is greater.
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Instructions
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Subtract the value of your trade-in, if applicable, from the car's sales price.
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Multiply the net selling price of the vehicle by 6.25 percent (which excludes your trade). If you do not have a percent symbol on your calculator, multiply the sales prices by replacing the percentage amount with a decimal and a zero followed by "625". The equation would look like this: "12,000 X .0625" if the selling price was $12,000.
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Go to the NADA Guides website to determine the trade-in value for the car you purchased if you are concerned that the selling price is too low. Make sure to choose the correct year, make and model of the car value, and include the proper odometer reading and options. Multiply the NADA value by 6.25 percent--expect to pay the highest tax amount you calculated.
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Tips & Warnings
The state of Massachusetts also charges an excise tax. You will pay $25 for every $1,000 of NADA determine value for each year's updated registration.
References
Resources
- Photo Credit car image by Brett Bouwer from Fotolia.com
