The amount of tax is determined by two things:
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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.
Excise Tax is calculated by multiplying the manufacturer's suggested retail price (MSRP) by the mill rate as shown below. The rates drop back on January 1 of each year.
For example, a 3-year old car with an MSRP of $19,500 would pay $263.25.
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.
Excise Tax was designed with equity in mind. In 1925, this tax was enacted as a Maine law. At that time, the State Legislature decided that the fairest tax assessment would be based on what the manufacturer suggested it sell for.
This law has remained in effect for over 75 years to ensure that everyone who drives the same vehicle pay the same amount of tax.
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 that must be must be presented on first-time registrations.
Many towns have adopted software and can actually use the VIN number in order to get the MSRP of that vehicle.