A Massachusetts resident who purchases a motor vehicle outside of Massachusetts may be required to pay use tax upon entering the state.
If he/she did not pay sales tax to the state of purchase, then the full 6.25% tax is due. If the vehicle was purchased from a dealer, the purchaser must pay the 6.25% state sales tax on the purchase price of the vehicle. If the vehicle was purchased from a private party, the purchaser must pay the 6.25% state sales tax on either the purchase price or the National Automobile Dealers Association clean trade-in value, whichever is higher. If no clean trade-in value is available, a default value agreed upon by both the Registry of Motor Vehicles and the Department of Revenue will be used.
For more information on a vehicle’s National Automobile Dealers Association trade-in value, please see the National Automobile Dealers Association website.
If sales tax was paid to the state of purchase, then the tax due depends on the reciprocity relationship between Massachusetts and the state of purchase. If the purchase state is reciprocal with Massachusetts, then the tax due to Massachusetts is 6.25% calculated on the purchase price subtracting the tax paid to the purchase state. If the purchase state is not reciprocal with Massachusetts, then the full 6.25% tax is due.
Please see the Reducing the Tax Due section for more information on reciprocity.
The following documents are required for this exemption:
• A completed Form MVU-29