Legislation allows municipalities and special taxing districts to tax motor vehicles at a different rate than other taxable property, but it imposes a cap on the mill rate for motor vehicles (32.46 mills), provided the mill rate for motor vehicles is lower than the mill rate for real property and personal property.  No district or borough may set a motor vehicle mill rate that if combined with the motor vehicle mill rate of the town, city, consolidated town and city or consolidated town and borough in which such district or borough is located would result in a combined motor vehicle mill rate above the cap.

How a mill rate is determined – The Board of Finance or Town Council meets to determine what the new budget figure is and will include all municipal salaries, education budget, any equipment and other purchases needed, local services, etc.  Then all other revenues such as federal and state grants are deducted, leaving the amount that needs to be raised by taxes if there is a deficit.  The mill rate is determined from this amount. The proposed budget and mill rate then go to a Town Meeting (legislative body) where taxpayers can discuss and may vote on the proposed budget and mill rate.