Monday, September 30, 2013

One-time car tax in Georgia

If you plan to purchase a new or used vehicle in the State of Georgia this year, here’s something to consider.   In March, Georgia House Bill 266 changed the annual ‘birthday tax’ to a new type of car tax.   State residents will now pay a one-time 6.5% title ad valorem tax (TAVT) instead of the annual tax when they register a car.  This one-time tax is based on the fair market value of the vehicle.

According to the Georgia Department of Revenue, dealerships must compare the value listed in the Georgia Motor Vehicle Assessment Manual for Title Ad Valorem Tax with the retail selling price less trade-ins and rebates. The greater value is deemed the fair market value and is the taxable amount.  Even though you may get a great price from a dealer, it’s still the fair market value that determines the tax you’ll pay to the state of Georgia.

When you finance your vehicle purchase from a dealer, the tax can be included in the financed amount much like sales tax was.  However, the TAVT also applies to the sale of used cars.   For example, if you buy a car from a friend, the one-time fee will be charged at the county tag office.  The title to the car won’t be transferred unless the fee is paid.  Keep in mind that the fee is not based on the sales price of the car; it’s based on the fair market value, which is found in the 2013 assessment manual. To determine the fair market value of a vehicle, click on this link:  TAVT Assessment Manual

Also, if you purchased and titled a vehicle between January 2012 and March 2013, you may be eligible to opt-in to the TAVT. To determine whether you can opt-in, click on this link: TAVT Calculator.  You may have also received a letter from the Georgia Department of Revenue informing you that your vehicle is eligible to opt-in to the TAVT.
Eric Tydings