Finance Local News

Massachusetts’ Lawmakers contemplating extra 5% motor vehicle excise tax

Massachusetts’ Lawmakers contemplating  extra 5% motor vehicle excise tax

Massachusetts Gov. Maura Healey is contemplating the possibility of permitting local municipalities to impose an extra 5% excise tax on motor vehicles.

Healey’s proposed “Municipal Empowerment Act” includes a policy reform aimed at enabling municipalities to increase their revenue collection. The Act aims to provide local governments with enhanced powers and support to improve their autonomy and increase the efficiency and effectiveness of local management, as stated by Healey’s administration.

Massachusetts is one of 27 states that levy a $25 charge per $1,000 of a car’s worth each year on vehicle owners. The tax is collected by the municipality where the car owner resides.

Some claim that the tax is necessary due to the services provided by the commonwealth, such as social services. Eileen McAnenny from the Pioneer Institute, an independent local think tank, stated to CBS News that Massachusetts often offers more social and other services at a higher expense compared to many other states. “They seek diverse revenue sources and more tax revenue streams compared to most other states.”

Healey’s measure includes raising the local lodging tax from 6% to 7% and the local meals tax from 0.75% to 1%.

The idea was developed following discussions with local government leaders, notably during a listening tour conducted by Lt. Gov. Kim Driscoll and other Healey administration officials last year. “This package aims to decrease bureaucratic obstacles faced by municipal leaders and provide them with additional resources to enhance the resilience of their communities,” Driscoll stated.

Massachusetts contains 351 cities and towns that form the foundation of our state. In a press statement, Healey stated that our administration has been dedicated since the beginning to providing the necessary assistance and resources for building robust communities and fostering economic growth.

The Municipal Empowerment Act suggests various reforms requested by municipal leaders to enhance the services they offer to their citizens and streamline operations. We are pleased to announce an increase in financing for infrastructure projects such as roads, bridges, schools, and municipal services to enhance the quality of life in our communities.

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