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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: outline of the changes, answers to commonly asked questions and a link to the tax calculator on a local 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.

Donald Virchow March 02, 2013 at 01:05 PM
If your vehicle falls into the catagory of option 2, you have to forecast how long you will keep your vehicle! That's crazy! Nobody knows what tomorrow may bring. In other words, if you opt to pay the one time tax, and it amounts to $1000,00 for example, and your car gets destroyed in an accident the next day, you lost your car and your $1000.00!!!!! If you pay the $1000.00 and the following year you decide to buy a new car....you lost the $1000.00 and you get to pay it all over again on your new car! What's wrong with this picture?
R. Barron March 02, 2013 at 05:34 PM
It would be the same scenario if you paid "sales tax". They are really just changing the name of the tax you would already be paying.
electric123 March 10, 2013 at 07:24 AM
I have lived in many states and countries in the world and Georgia is the most money hungry state I have ever seen in my 50 years of living for revenue.
Ossie Champagnie April 01, 2013 at 05:28 AM
Just registered my wifes 2006 bmw x3 and was told the value was $14325.00 and charged $931.00 for taxes WOULD LIKE TO KNOW WHICH VALUATION BOOK ARE THEY READING FROM since all valuation I have seen (kellys blue book ,black book, edmunds.com ) have the price between $8000 and $10000. Need a refund
Lynn Hubbard May 13, 2013 at 06:09 PM
Plus if you sell the vehicle you paid a "lifetime" of taxes for, the state charges the new buyer tax on the same vehicle. Double dipping.

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