Excise tax is an annual tax that must be paid prior to registering your vehicle. Except for a few statutory exemptions, all vehicles registered in the State of Maine are subject to the excise tax.
Excise tax is defined by Maine law as a tax levied annually for the privilege of operating a motor vehicle or camper trailer on the public ways.
- Where do I pay the excise tax?
- How much is the excise tax?
- How is the excise tax calculated?
- Where does the excise tax go?
- Why is the tax based on MSRP?
- Where can a municipality get the MSRP?
1. Where do I pay the excise tax?
Excise tax is paid at the local town office where the owner of the vehicle resides. When a vehicle needs to be registered, an excise tax is collected prior to the registration.
2. How much is the excise tax?
The amount of tax is determined by two things:
- The age of the vehicle
- Manufacturer's suggested retail price ("MSRP")
3. How is the excise tax calculated?
Excise tax is calculated by multiplying the MSRP by the mill rate as shown below. The rates drop back on January 1st of each year.
YEAR 1 .0240 mill rate
YEAR 2 .0175 mill rate
YEAR 3 .0135 mill rate
YEAR 4 .0100 mill rate
YEAR 5 .0065 mill rate
YEAR 6 .0040 mill rate
For example, the owner of a three year old motor vehicle with an MSRP of $19,500 would pay $263.25.
4. Where does the excise tax go?
The town that collects the excise tax can use it as revenue towards the annual town budget. Typically, the revenue is spent on local road maintenance, construction and repair.
5. Why is the tax based on MSRP?
Excise tax was designed with equity in mind. In 1925, this tax was enacted as a Maine law. At that time, the Legislature decided that the fairest tax assessment would be based on what the manufacturer suggests it sell for.
This law has remained in effect for nearly 100 years to ensure that everyone who drives the same vehicle pays the same amount of tax.
6. Where can a municipality get the MSRP?
There are several resources for the MSRP that will provide the information on the retail price of a vehicle. New vehicles are required to have a window sticker and the window sticker must be must be presented on first time registrations.
For used cars, individuals and municipalities can use the JD Power Official Used Car Guide (formerly the NADA Guide), the New Car Cost Guide, the Automobile Red Book and the Automobile Blue Book to determine the MSRP of a vehicle.
Many towns have adopted software based on the Automobile Red Book and can use the VIN number to determine the MSRP of that vehicle.
Please note: The State of Maine Property Tax Division only provides quotes to the Municipal Tax Collector, not to individuals.
For more information see 36 M.R.S. § 1482 or Property Tax Bulletin No. 13.