Car Sales Tax in Massachusetts
In Massachusetts, the sales tax on every car purchase is 6.25%, which is rather high but there are no local taxes.
Written by Rob Shapiro
Reviewed by Jessica Barrett
If you buy a car in Massachusetts, you will need to pay a 6.25% sales tax on the purchase. There are no additional taxes at the county or city levels applied to the purchase of a new or used car, though. This is a bit high compared to other states, but it is offset by the lack of other sales taxes.
Sales tax is applied to car purchases in most parts of the U.S. So when shopping for a car, you need to consider the sticker price a starting point while remembering the total purchase price will be more.
While you’re navigating the car-buying process, it’s good to have a proper understanding of your state’s car sales tax. That’s why
car insurance
super app Jerry
has crafted this useful guide to help you understand how sales tax (and other fees) could affect your purchase of a new car in Massachusetts. How much is the car sales tax rate in Massachusetts?
The state sales tax in Massachusetts is 6.25%. This is the amount you will pay in tax on top of the purchase price of your new car. While some residents might view this as high, there is no additional county or city tax.
When all things are considered, Massachusetts’ car sales tax rate falls somewhere in the middle of the pack compared to the rest of the U.S.
How are car trade-ins taxed in Massachusetts?
Most dealerships offer a
trade-in option
. If you hand over the keys to your current vehicle, the dealership will credit you an agreed-upon amount toward the purchase of a new or used car on their lot. If you live in Massachusetts and are considering a trade-in, it’s important to note that Massachusetts does not tax the credit received for a trade-in.
Let’s say you’re buying a
Buick Encore
for $25,000 in Massachusetts and trading in your old Chevrolet Cobalt
for a $3,000 credit. This means you will pay 6.25% sales tax on $22,000—not the full sticker price.If you are being offered further rebates or incentives, you should first confirm whether you will be taxed on the purchase price before or after any of these are applied.
Key Takeaway Massachusetts does not apply sales tax on the credit received for a trade-in that is part of the purchase.
How to calculate sales tax on a car in Massachusetts
Massachusetts makes calculating car sales tax as easy as possible! All you have to do is add 6.25% to the price of your car, minus any trade-in credit.
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Exemptions from Massachusetts car sales tax
Massachusetts does exempt a few things from sales tax, like prescription medicine. That said, there does not seem to be any exemptions from its car sales tax.
How to estimate Massachusetts tax, title, and registration fees
In addition to sales tax, you will also have to pay a title fee, registration fee, plate transfer fee, and documentation fee when buying a new car. Most of these fees go to the state, except the documentation fee, which goes to the dealership.
Here is a breakdown of the additional costs associated with car purchases in Massachusetts:
Cost | Average cost |
|---|---|
Sales tax | 6.25% |
Registration fee | $128 to $180 |
Title fee | $50 |
Plate transfer | $10 |
Documentation fee | $295 |
Key Takeaway When budgeting to buy a new car, don’t forget to factor in the various taxes and fees including state sales tax, registration fee, title fee, plate transfer, and documentation fee.
How to find affordable car insurance in Massachusetts
It’s a lot of fun to buy a new car, but before you drive off the lot, you need to make sure you have the right car insurance. Using the
Jerry
app makes it quick and painless. Jerry lets you say goodbye to long wait times and dealing with annoying insurance agents. Simply download the app for free and sit back while Jerry searches for competitive quotes from more than 50 top insurance companies like Progressive and Allstate.
Jerry will present you with the best quotes in minutes. And Jerry users save an average of $887 a year on
car insurance
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FAQ
How much is sales tax on a used car in Massachusetts?
Massachusetts charges a 6.25% sales tax on all purchases for new and used cars.
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