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Massachusetts considering additional 5% motor vehicle excise tax

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(The Center Square) – Massachusetts Gov. Maura Healey is considering allowing local communities to charge an additional 5% excise tax on motor vehicles.

The policy change is a part of Healey’s proposed “Municipal Empowerment Act,” which is supposed to allow municipalities to collect more revenue. The legislation is “designed to arm local governments with greater tools and supports to chart their own course and make local management more efficient and effective,” according to Healey’s administration.

Massachusetts is one of 27 states that charge vehicle owners $25 for every $1,000 of the vehicle value annually. The tax is collected by the municipality where the car owner resides.

Some argue the need for the tax stems from the services the commonwealth supplies, including social services. “Massachusetts tends to provide more social services and other services and have higher cost than many other states,” Eileen McAnenny from the Pioneer Institute, an independent local think tank, told CBS News last year. “So they look for a variety of sources of revenue and more sources of tax revenue than many other states.”

Other features in Healey’s bill are increasing the local lodging tax from 6% to 7% and local meals tax from 0.75% to 1%.

Healey’s administration said the proposal resulted from conversations with local government officials, specifically a listening tour by Lt. Gov. Kim Driscoll and other Healey administration officials last year. “This package reduces red tape that municipal leaders far too often encounter and gives them more options to utilize tools that will make their communities stronger,” Driscoll said.

“Massachusetts is home to 351 cities and towns that are the bedrock of our state. From day one, our administration has been committed to giving them the support and resources they need to build strong communities and grow their economies,” Healey said in a press release.

“The Municipal Empowerment Act proposes multiple reforms that municipal leaders have asked for to improve the services they can provide to their communities and make operations more efficient. We are also proud to be increasing funding for roads, bridges, schools, and municipal services to improve quality of life in all of our communities.”

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