A non-Massachusetts resident who purchases a vehicle and takes delivery in Massachusetts must pay the full 6.25% sales tax on the purchase price of the vehicle or the National Automobile Dealers Association clean trade-in value, depending on the seller.
If the vehicle was purchased in Massachusetts 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 in Massachusetts 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.
In some cases, the purchaser may trade in his/her current vehicle to reduce the price of the new vehicle and therefore reduce the tax due. For more information on trade-ins, please see the Reducing the Tax Due section.
Sales/use tax on a salvage vehicle, purchased from either a dealer or non-dealer, is collected based on 6.25% of the purchase price.
A non-resident who buys a motor vehicle in Massachusetts is not required to register or title the vehicle in Massachusetts. In these cases, this is considered a Tax-Only Transaction, since the buyer is still obligated to pay sales tax to Massachusetts. To satisfy the tax obligation, the buyer should present the following documents at an RMV Service Center:
• A completed ST-7R Form
• Copy of the Bill of Sale or Invoice
Because the sales tax has already been paid, an out-of-state resident who wishes to title his/her car in Massachusetts is not required to pay sales tax again. These customers must present Proof of Tax Paid in addition to other required documents when they apply for a Title in Massachusetts.