How Do I Get a Sales Tax Exemption in Massachusetts?
In Massachusetts, buyers often face a 6.25% sales tax on used car purchases, which can significantly increase the total cost of a vehicle. However, certain circumstances allow for sales tax exemptions. Understanding how to qualify for an exemption and what documentation is required can save you a substantial amount of money. Here’s a guide to help you navigate the process and claim a sales tax exemption in Massachusetts.
Gift Transfers Between Immediate Family Members
One of the most common exemptions is for vehicles gifted between immediate family members. This means that if a car is transferred as a gift from a parent, spouse, child, or sibling, sales tax may not be required. However, there are specific steps to follow:
Notarized Affidavit of Gift: To claim this exemption, both the donor and recipient must complete a notarized affidavit (Form MVU-24) confirming that the car is a gift.
Documentation: Be prepared to provide proof of the relationship between the donor and recipient (e.g., birth or marriage certificates).
Military and Out-of-State Residency Exemption
If you are a member of the military or a non-resident temporarily in Massachusetts, you may not need to pay Massachusetts sales tax on a car purchased out-of-state and brought into Massachusetts. To qualify for this exemption:
Military ID and Out-of-State Registration: Active-duty military personnel who are stationed in Massachusetts, or those who are out-of-state residents, can present their military ID and out-of-state vehicle registration to avoid paying sales tax.
Documentation: The RMV will require proof of your non-residency status and the car’s out-of-state registration.
This exemption is designed to protect service members and non-residents from having to pay sales tax in Massachusetts if they are only temporarily living in the state.
Inherited Vehicles
If you inherit a vehicle as part of an estate, you may qualify for a sales tax exemption. This exemption applies when the vehicle is passed down to heirs through a will or trust. To claim the exemption:
Provide a Will or Trust: You will need to submit the vehicle’s title along with documentation such as a will, trust agreement, or death certificate.
Proof of Inheritance: The RMV requires proof that you are the rightful heir to the vehicle, ensuring that the transfer is legitimate.
Additional Exemptions
There are other instances when Massachusetts allows for a sales tax exemption, such as for vehicles that have been previously taxed in another state or for certain low-value cars. Always check with the Massachusetts Registry of Motor Vehicles (RMV) for specific guidelines.
If you have questions about qualifying for a sales tax exemption in Massachusetts? Reach out to Dimov Associates today for expert guidance and personalized support.
