Ensures Sales Tax Revenue Flows to Mass Not Buyer’s Home State
Out-of-state residents who buy a vehicle at a Massachusetts car dealership and pay for a newly-available temporary registration plate are expected to generate $100,000 in annual revenue for the state.
The Registry of Motor Vehicles wrote late last month to legislative leaders and Secretary of State William Galvin informing them that the agency proposed a $20 fee per short-term registration, which would raise $100,000 in revenue each year. The RMV said the fee is initially effective under emergency regulations and will become permanent as of Sept. 29.
A bill that Gov. Charlie Baker signed on the last morning of his eight years in office authorized Massachusetts dealerships to issue temporary registrations for buyers who live in other states, allowing drivers to take their vehicles home off the lot rather than waiting for delivery.
Rep. Smitty Pignatelli, a bill co-sponsor, said earlier this year that the allowance would save dealerships the cost of delivery and ensure that the sales tax revenue flows to Massachusetts, not to a buyer’s home state. While sales of the temporary tags are expected to generate $100,000 in state revenue, Pignatelli said that the retained sales tax revenue (plus a portion of excise tax revenue) is anticipated to total several million dollars a year.
The temporary plates are valid for up to nine days and first became available through the RMV in April. To qualify, purchasers must provide to dealers proof of residence, motor vehicle insurance and property damage insurance.
