How Do I Determine the Excise on a New or Used Vehicle?

Answer

Motor vehicle excise amounts are based on a vehicle’s original manufacturer’s list price (M.S.R.P.).  Depreciation percentages are applied to the list price for the first five years of vehicle life as follows:  

In the year preceeding the designated year of manufacture:          50%

In the designated year of manufacture:                                            90%

In the second year:                                                                            60%

In the third year:                                                                                40%

In the fourth year:                                                                              25%

In the fifith and succeeding years:                                                     10%

Condition and market value are not considerations in determining the value, nor is age after the fifth year.  

The rate of $25.00/$1,000 of valuation determines the actual billed amount. Excise follows the calendar year.  The annual excise tax year runs from January 1st through December 31st.   Excise bills are taxed from the first day of the month in which the vehicle is registered through the end of the calendar year.  

The following example may help to determine the annual excise liability on a new or used vehicle. In our example we are assuming a brand new vehicle. Our new vehicle is a model year 2023 with the original manufacturer’s list price of $50,000. We will assume our model year 2023 vehicle is first registered in calendar year 2022 (the year preceeding the designated year of manufacture), during the month of December. Calendar year 2022 will be the first year of taxation for this new model year 2023 vehicle.  In this scenario the vehicle was purchased and registered on December 23rd 2022.  As such a calendar year 2022 excise bill will be issued.  It will be a one month bill issued in the amount of $52.08.  In addition, the calendar year 2023 excise bill will follow shortly thereafter, and will be issued in the amount of $1,125.00.  Here is how the calculation works according to the depreciation schedule:

CY 2022  50% of the M.S.R.P = $25,000 x .02500 =$625.00 annual 1/12 = $52.08

CY 2023  90% of the M.S.R.P. = $45,000 x .02500 =$1,125.00 annual

CY 2024  60% of the M.S.R.P. = $30,000 x .02500 =$750.00 annual 

CY 2025  40% of the M.S.R.P. = $20,000 x .02500 =$500.00 annual

CY 2026  25% of the M.S.R.P. = $12,500 x .02500 =$312.50 annual 

CY 2027  10% of the M.S.R.P. = $5,000 x .02500 =$125.00 annual