By Stephen Markley on July 10, 2008
Some people get all the luck.
Thanks to a foul-up by the Massachusetts Registry of Motor Vehicles, owners of some 131,000 ultra-luxury cars, such as Lamborghinis and Maseratis, escaped or paid only a fraction of the auto excise tax they owed the state.
How did this happen? From the late 1990s to 2007, the RMV calculated the vehicle tax bills with a database from the National Auto Dealers Association. The problem is—and boy, this is a hoot—NADA excludes high-end luxury cars.
Therefore, someone who bought a $1.5 million vehicle in Boston during that period likely paid less in excise taxes than someone who purchased a Honda Civic. In the worst-case scenarios, RMV workers guesstimated ultra-luxury car values at $17,000. In the case of a $325,000 Maserati, the tax would amount to $383 rather than the correct $7,313.
The real losers are the cities and towns of Massachusetts, which overall lost $32 million per year—money they won’t recoup because the state has found it to be too costly, laborious and possibly illegal to charge luxury car owners for the back taxes.
The question is: How many other states use the NADA database? And for those that do, how many have mechanisms for tallying ultra-luxury vehicles?
Luxury Car Levy Too Taxing for State (The Boston Herald)