New Title Tax is Unfair and Discriminatory

By now, most Georgia residents have heard of the new vehicle title tax, which replaces the sales tax on vehicles, replacing it with a one time fee of about the same amount, and which eliminates the annual ‘birthday tax,” or ad valorem tax most of us have all been paying each year.

And for any new Georgia resident who plans to live here at least four years, this is a good deal, says Georgia House representative Tom Rice, who sponsored the bill.

But this bill overlooks the tremendous unfairness and discriminatory impact on a very important group of people, new Georgia residents, who have had and can have no voice in the matter, but instead are faced with in many cases, thousands of dollars which must be paid immediately when registering a new or used vehicle in Georgia.

I do not believe this is an unknown consequence by the author and our legislators who voted for the bill; in fact, Representative Tom Rice stated in a comment on the Patch that one would have to live here for four years to receive any benefits under the law.

Many folks who move into Georgia are young, many are low income and do not plan to live here at least four years. Many, especially in the military, are assigned to a new post knowing they will be here only for one to three years. Yet such a new resident is required to pay, with half up front, the required ‘title tax” when their car(s) are registered in Georgia, even if they have already paid a sales tax in their previous state.

In the past, when a new resident moves into Georgia, if the sales tax has been paid in the previous state, Georgia does not require a tax to be paid again. That is only fair. Now, however, even if a new Georgia resident buys a new or used car and pays sales taxes in the previous state, they have to pay what is often an equivalent amount to Georgia. Further, the new resident cannot deduce the value of a trade-in when calculating the tax. This is another grievous error in the bill.

Read this recent true story. An employee is transferred to Georgia from another state, and has three cars. Although the sales tax has already been paid to his former state, Georgia requires this new resident to pay, with half up front, $5200 to register these three vehicles in Georgia. Now, this new resident may well be transferred out of state in the next three years, so he does not get the benefit of living in Georgia for four years and thus loses the benefit of no birthday tax.

Due to having to pay $2,600 immediately, which was totally unexpected, the new resident has to drain his bank account, and now has no money left to buy groceries. (I am not making this up.) How many of us can write a check for $2,600 or other major amount, from their checking account? How many have that much left on their charge card?

Now the amounts and situations may be different, but a version of this impact will hit tens of thousands of new residents over the next few years. Current residents can continue paying the annual birthday tax, and last year purchasers can decide if they want to opt in to the new system, or not. It is only fair to offer such an option to new residents, rather than blindside them at the tag office and expected them, in effect, to repay a tax they have already paid in another state.

The current system is unfair and discriminatory to new residents, and just plain wrong. The bill needs to be amended. Who knows, it may well generate even more revenue to the state by new residents actually registering their vehicles in Georgia, instead of continuing to renew in their previous state since the bill has a strong incentive to do that.