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Georgia's New Vehicle 'Title Tax' Takes Effect March 1

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.

Effective March 1, 2013, House Bill 386 removes the sales tax and the annual ad valorem tax on newly purchased vehicles, according to a Gwinnett County newsletter.

Instead, there will be a new title tax of 6.5 percent in 2013 -- only due each time the vehicle is sold and titled. It applies to dealer sales as well as sales between individuals.You'll pay this tax in the county where you register the vehicle.

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

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.

For more information and a title tax calculator, visit www.GwinnettTaxCommissioner.com.

This information was obtained from Gwinnett News For Neighborhoods newsletter.

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Duluth2 January 08, 2013 at 02:00 PM
Any tax professionals out there know whether or not this new title tax is deductible on itemized federal and state income tax returns (as the current ad valorem tax is now)?
Jim Nelems January 08, 2013 at 02:48 PM
Imagine you are a new college graduate from North Carolina and just got a job in Georgia. In alabama you bought a new car for $25,000 and paid Alabama sales tax. You get to the Georgia tag office and the customer service rep says, "welcome to Georgia, you owe the $18.00 tag fee plus $6.5% or $1625, right now." THIS is the new law all new residents will face.
R T January 08, 2013 at 10:35 PM
Oh the best part, thanks to the car dealers lobby, is that you still have to pay the ad valorem tax if your are happy with your current car and don't want to buy another one from them. Please correct me if I'm wrong!
Tom H January 09, 2013 at 04:45 PM
I bought a new car in Feb 2012, at a dealer. I paid sales tax, etc. When a got my new tag in June, I paid the Ad Val. Tax. So this new law will impact my tag purchase this June. The AJC wrote an article about what it will cost you. See http://onlinemvd.dor.ga.gov/welcome.aspx You put your vin # in and it has the info on your car. According to the calculations I received I don’t have to pay anymore Ad Val. Tax. I will check this out again. Tom
Robert J. Nebel February 14, 2013 at 03:38 PM
This is for tax professionals and/or financial gurus. Does this new deal save a car owner over the long haul-like 10 years?
Judy Putnam (Editor) February 14, 2013 at 04:48 PM
I had the same question, perhaps a numbers guy (or gal) can put pencil to paper and figure it out and let the rest of know if we're getting a good deal or not.
Jim Nelems February 14, 2013 at 10:40 PM
It is a good deal for Georgia residents who plan to live here for at least 10 years. It is a financial disaster for anyone moving into Georgia because every new resident will have to pay 6.5% 'tax'on the value of all their cars brought into the state even if they have already paid sales tax in another state. Also because it officially is a fee not a tax, payments are no longer tax deductible as the annual birthday tax was.
Tom H February 15, 2013 at 12:27 AM
I seem to recall that this law was passed at the end of the session without much thought. Let’s pass it and then we’ll read it and figure it out. Tom
Sully February 24, 2013 at 05:15 AM
Here is a great FAQ from the Gwinnett Tax Commissioner Website. http://gwinnetttaxcommissioner.manatron.com/LinkClick.aspx?fileticket=Jhv%2fu5xcGtI%3d&tabid=108

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