I like the premise of "none of what follows below below is an anti-tax rant. I love my home state of Massachusetts and don’t mind paying my fair share to fund some of the best public schools and social safety nets in the country." as if you wrote it while a revenue agent from your local unit of government held a loved one hostage.
Even though it is basically an anti-tax rant, albeit one more rooted in the government's typically arcane taxation methodology. You should at least tell us what this tax is used for. Given that it's accessed locally, I'll assume it's for a local service. Should I further assume you don't pay any taxes upon your real estate?
If the answer is "Yes I do.", then why does your local government hide costs inside of a fund that is so potentially volatile and costly to administer? By volatile, I mean that just by moving somewhere else, your locality would lose how many hundreds (thousands?) of dollars? Whereas by simply incorporating the true costs of government into your real estate taxes, there would be far less annual fluctuation. How does one budget like this? Cross-referencing your ownership data (annually) with the DMV isn't free, nor is mailing out 12+x1000s of similar statements, (nor is follow-up). By eliminating separate winter/summer tax bills, my 27th largest city in Michigan saves $30,000 annually.
You would think that one of the most socially-safe and well-educated populations wouldn't miss such an obvious trick.
We do pay property taxes to our towns, but I don't know what they use the car taxes for. I will tell you that at least in Lexington, which is socioeconomically equivalent to Rob's town, the property taxes have become outrageous. I pay more than $12 Gs. When I bought the house from the estate, in '04, I was paying less than half that. When my parents bought the same house in 1962, in inflation adjusted terms, they were paying the same. So after staying pretty much constant for 42 years, the taxes doubled in less than 16 years. That probably reflects socioeconomics. When I was a kid in the '60s, there was one Mercedes in the neighborhood, but most of the cars were Chevies, Plymouths, and Fords, with a handful of Peugeots (these were not expensive), a single Buick station wagon... Now, at least 10, probably 12 Teslas, and climbing (but only one S), a handful of BMWs, some Volvos, etc. (I pay $42.50 for the excise on my Civic.)
In MS, in a private sale, the buyer doesn't have to pay sales tax on a vehicle if it's older than 10 years. I just bought a 2010 Highlander, and the tag/title/taxes was a little less than $50. If a vehicle is 25 years or older, you have the option of getting an antique tag, which is $25 once. Antique tags are then good for as long as you own it without any additional yearly costs. Annual inspection stickers were done away with a few years ago. And we don't currently have any emissions testing. MS gets a bad rap for a lot of things, and on some points unfairly so, but it's a good place to live when you have antique vehicles and you also like to daily drive old beaters. Hagerty makes insuring the antiques very affordable, and the old daily drivers have cheap liability through another insurance company.
Great summary of MA excise tax and how it's better for folks like us with older, cheaper cars. When I had multiple vehicles in Boston, I was always more annoyed at having to write another check in Tax-achusetts than I was at the amount of the tax itself, which was never more than $50 or so. Also had to remind myself that the money was going to "some of the best public schools and social safety nets in the country," because they sure weren't spending it on fixing the roads!
Why not create an LLC in a different state, and transfer ownership? It would eliminate this tax, and other liabilities. Although you’d have to figure out the annual LLC filing cost, and additional tax filing cost for the LLC. Here’s a name idea— Not-a-moneyed collector LLC.
Michigan doesn't have an excise tax, but they have a very inequitable license plate fee system.
The cost of the plate is based on the new price of the car. Forever. The guy who cuts my lawn pays as much for the plates on his 12 year old Camry as the well-off professor who bought it new. I have brought this up with state people. including my senator, but I haven't gotten much traction. I suggested that the cost of plates should decline 10% per year until the car i 9 years old, and then remain at 10%. Of course that means that new car buyers will have to pay more in order to raise the same amount of money each year, and that isn't going to go over very well wit legislators.
Here in the People's Republik of Kaliforniastan, we pay a license fee AND a registration fee every year. For example, my 2005 Cadillac STS costs me $43.00 to license, but the registration fee is another $147.00. The county I live in also receives an additional $9.00, well, just because. So my 16 year old car costs me $199.00 every year, and every other year there's an additional $75.00 for the emissions inspection. I have four other vehicles that run about the same amount, except my 1963 GMC 4000 series flatbed (which was the last vehicle that my late father and I built together) that rarely sees the road and is not for hire is still considered a "heavy duty" truck and therefore is assessed $395.00 for its little stickers on the license plate. Every year. Fortunately, it is exempt from the emissions inspection, so I have that to celebrate. I really don't know why I still live here...
Taxing cars isn't very popular and Washington had a ruckus over people keeping Oregon plates on their cars when they moved to Vancouver to avoid income tax. For that matter I take perverse pride in stiffing Missouri for personal property tax when we left the state. I actually like Oregon's approach where income tax is the primary revenue source and there's no sales tax on anything. Even my property taxes are modest by East coast standards. Car registration is currently based on EPA combined mileage, in an attempt to compensate for reduced gasoline tax revenues so an F150 is cheaper to register than a Prius, but it's only $75-100 difference. I think they are pushing per mile for electric vehicles. There's a more equitable burden since income tax is progressive while sales tax is regressive and there's no weird value based taxes like Massachusetts excise or Michigan plates
TN has a tax on large commercial out of state vehicles above the IRP portion. It relates to miles operated in the state and the original cost of the truck. We avoided that state as much as possible but when necessary, sent the older, less initial value trucks to haul the freight. Not sure if that is still the case as I haven’t sent trucks that way in 10+ years.