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New Georgia Vehicle 'Title Tax' Takes Effect in March 2013

HB 386 replaces the annual ad valorem tax on newly purchased vehicles.

The so-called "birthday tax" that Georgia vehicle owners pay will end in March 2013 – for people who purchase a new vehicle.

Vehicles purchased on or after March 1 and titled in the state will be exempt from sales and use tax and the annual ad valorem tax, according to the Georgia Department of Revenue.

Instead, due to the passage of House Bill 386, these vehicles will be subject to a new, one-time title ad valorem tax that is based on the value of the vehicle.

If you buy a new vehicle where you were paying sales tax on it, now it's called a title tax and is pretty much the same rate. 

It's going to be 6.5 percent in 2013, 6.75 percent in 2014, in year three it will increase to seven percent and so on. However, you will not be paying the annual ad valorem tax on that new vehicle.

Another difference in the new law is that it will affect individuals who purchase a vehicle from another individual. The private sales that were traditionally exempt from being taxed will now be.

The tax is based on the fair market value of the vehicle at the time of the purchase or the sales price, whichever is higher. 

You will continue to pay the annual ad valorem tax on vehicle(s) that you currently own.

To help residents understand the changes, Cherokee County Tax Commissioner Sonya Little said she will place an outline of the changes, answers to commonly asked questions and a link to the tax calculator on the agency's website.

Other aspects of the new law:

  • The new title tax is based on a percentage (6.5 percent in 2013) of the fair market value of the vehicle, not the sales price, as determined by the Georgia Department of Revenue.
  • If you purchase a vehicle in Georgia between January 1, 2012, and March 1, 2013, you have the option of paying the new title tax instead of the current annual ad valorem tax. You have from March 1, 2013, until December 31, 2013, to opt into the new program. Note: Vehicles purchased out-of-state are not eligible to opt in.
  • All other existing annual vehicle registration requirements, including annual tag renewal fees, decals, and emission tests (if applicable), remain in effect for all vehicle owners.

Will the new Georgia tax affect your decision to purchase a new vehicle? Share your thoughts in the comments below.

Kz January 12, 2013 at 01:32 PM
Seems a bit confusing. Why are they not getting rid of the ad valorem tax all together on current or new vehicles and just have a one time tax like a sales tax. I don't understand why we have to pat a tax on a depreciating assets. What's next an annual tax on otger depreciating assests like clothing and furniture.
People are Crazy January 12, 2013 at 03:55 PM
So...people who bought a vehicle last year, pay tax on it for the life of the car while new owners only have to pay once? So confusing.
Flyit4 January 12, 2013 at 07:30 PM
I recently moved to GA from another state. This "Ad Velorem" Tax is a sham! I used to pay $99/yr per vehicle TOTAL! Yes I paid a sales tax at purchase, but that was it. The voters need to speak out to our representatives and have this unfair tax abolished. I for one, will not be buying any new vehicles while living in the great state of Georgia. I only see this TAX as a hindrance to the local economy and an incentive for people to choose to live in a more tax friendly state, such as Tennessee or Florida! No STATE INC TAX and NO AD VALOREM!
Barbara Holloway January 13, 2013 at 06:38 PM
I agree with the other comments. Totally another valid reason to start looking Into a move. I like Tennessee For warning my friends this is no reason to think one is better off than another. Ad valorem tax isn't any more or less than this. New verbiage of taxing. Good luck getting it turned around. You can't get ANY politician to do Anything for the people. Laws and taxes they don't apply to them
Sylvia January 14, 2013 at 04:11 PM
Stealth taxes are taxes and all states have them. Read HB 386. Looks like there are two agendas at work here. More revenue for education since seniors don't pay school tax in GA. That needs to change but never will. I pay $1300+ a year and my wealthy 65+ neighbors pay $300 a year in property taxes. And, enough loopholes for businesses to drive a fleet of cars through. Re-electing incumbents is a bad idea. But everyone still does.
Daren Richmond January 31, 2013 at 12:04 AM
well. they slipped a new one in on us. looks to me like if you trade cars often (with this new law) you will be paying lots of extra taxes. Im gonna drive mine. till the wheels fall off.
Frank Jones January 31, 2013 at 03:26 AM
What people don't seem to realize is that the incumbent Republicans are relentless on trying to tax the poor and giving tax breaks to the wealthy. How so? HB 386 implements a new sales tax on private party used vehicle sales...sales typically engaged in by people with lower income. For new vehicle purchases...purchasers fiscally by the more affluent, HB 386 reduces their tax burden by eliminating the annual tax. If you do the math, the new sales tax in used vehicles will cost consumers more than the benefit of eliminating the ad valorem tax. As to the general class warfare, remember the HOST tax referendum last election, that tax would have increased taxes on the poor while giving tax breaks to the rich.
Phil McCall January 31, 2013 at 01:45 PM
Frank Jones - Two notes to your note; 1 - HB 386 was a bi-partisan vote. More republicans voted against HB 386 than democrats in the Georgia House. 2 - HOST was defeated by a bi-partisan effort in a county that is overwhelmingly republican. The reason the legislative delegation is CURRENTLY republican in Cherokee County is because the democrats have yet to find candidates that did not propose even more outlandish tax increases as their platform - as proof read your party's County website.
Georgia Moderate January 31, 2013 at 05:12 PM
Phil, where on the Cherokee Democratic party does it state that "outlandish tax increases" is part of their platform? You're making that up. And it seems that the most recent Democratic candidate that ran for House 21 was eminently more qualified than the Republicans, and did not have a platform of "outlandish tax increases." And tell me what makes you think that the defeat of the HOST was a "bipartisan effort."
Frank Jones January 31, 2013 at 10:49 PM
Phil...Yes HB 386 passed with bi-partisan support, however that does not nullify the argument that HB 386 shifts the tax burden from those with means to those without. Also, HB 386 was proposed and passed in 1 or 2 days without substantial notice to the constituents. HB 386 was lobbied for extensively by the new & used car dealers as they will reap huge advantages from the law. If you look at the law you'll see that it is a tax increase on 90% of the citizens of this state. Transfer a car to your spouse or child...new tax. Move to Georgia with a $30K car...welcome to GA tax of $1,9500. Two cars, $3,900. Like to buy private-party used cars out of necessity...new tax. Like to lease cars...new tax. As to HOST...Yes we defeated it, but it was fairly close and could easily have gone the other way. One must look at who proposed it, supported it, and actively promoted it. Outlandish Tax Increases? Gimme a break.
Phil McCall February 02, 2013 at 09:51 PM
Frank - You framed the argument of passage of HB 386 as republican, I pointed out democrats also voted for HB 386 by stating correctly HB 386 was a bi-partisan passed bill and not just a republican bill. It is false to say one party when both parties passed HB 386. I agree HB 386 is a tax increase - you & I do NOT disagree on that point. I define outlandish tax increases to include "revenue neutral" that our republican BOC voted in July, and the previous tax increases heaped on us by both our BOC and BOE. I also believe HOST and TSPLOST fell into the category of outlandish tax increases and I was glad to see the democrats and republican voters recognized the tax increases for what they were - and voted both down.
Debra DeBord February 28, 2013 at 10:13 PM
My mother is 70 and by no means wealthy. Some of those seniors paid the same type of tax that you now pay. With inflation considered, I am sure they paid amounts similar to yours. Would you rather pay $1300 a year forever or just pay that amount till you reach 65 and then get a cheaper rate? The seniors have paid their fair share of the taxes which go to pay for education. They paid for my education and yours. If they have children, they even paid for their kids education. And if the seniors do have some money (probably not wealthy) since you only pay $1300 a year, you probably aren't living in the wealthiest neighborhood, they earned it and most of them scrimped and saved to get it. Unlike a lot of people today, they saved for what they wanted & needed instead of "charging" it (which in up costing more in the long run). What is wrong with that? Nothing. I think everyone hopes to have some money and maybe a paid for house when they get in their senior years and not have the government keep taxing them excessively until they die.
maggie mcgee July 04, 2013 at 08:55 AM
My husband and I are retired and moving to GA in a couple of months. I've read the article twice and I'm still confused. Should we buy a new vehicle in another state to avoid these taxes? I've never heard of paying tax on the life of a vehicle. Is it me ?
maggie mcgee July 04, 2013 at 09:03 AM
What is a "birthday tax"?
mary September 06, 2013 at 09:07 PM
I was getting ready to move into the state. I'm retired. I paid 2,000 sales tax on my 2012 car and 200.00 for license and registration. Every year people in my state paid 100.00 to get a new tag/sticker. Now, I'm told I need to pay a 1400.00 in one day to get a sticker. I can easily move into a surrounding state since Ga is close to several other states. I will look up their taxing rules. Georgia, I don't think so.

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