New Title Ad Valorem Tax kicks in March 1
By Stephanie Johns
Car buyers no longer have to pay sales tax on a car. That tax is no longer. In its place: a new tax.
Georgia House Bill 386 created the new Title Ad Valorem Tax (TAVT), which replaces the sales tax on cars so car buyers no longer pay sales tax either through a purchase made at a car dealership or on an individual sale.
Becky Astin, Morgan County Tax Commissioner, explained that car buyers will pay their county tax commissioner 6.5 percent of the car’s fair market value, not the sale price of the car, to transfer their car title.
In cases where the tax commissioner does not have a fair market value listed in their assessment manual, Astin said the car purchaser would have to provide their bill of sale.
To put the TAVT into perspective, Astin provided the following example: on a $20,000 car purchase, the car buyer will pay 6.5 percent of that or $1,300 for TAVT, $18 for the title fee, and $20 for their decal sticker.
The title fee and decal sticker price are set by the state and have been “forever,” she said.
Several groups qualify for exemption from the TAVT: veterans, family vehicle sale transactions, nonprofit organizations, and cases of inheritance. Churches, which were exempt in the past, no longer will be exempt under the TAVT.
Beginning March 1 and going through Dec. 31 those who purchased a car in Georgia on or after Jan. 1, 2012 and prior to March 1, 2013, may be qualified to opt into the TAVT.
A TAVT calculator may be accessed online at http://onlinemvd.dor.ga.gov/Tap/welcome.aspx.
Vehicles not required to be titled, such as 1985 and older, do not have to pay the TAVT unless the owner wants to title it.
Astin explained that a person can get more money for a vehicle, especially if it is an antique vehicle, if the vehicle has a title.
“Some people will not purchase a car without a title,” she said.
Astin pointed out that the TAVT does not do away with the old ad valorem tax, commonly referred to as the birthday tax.
“This only applies to a new purchase,” she said. She explained that whether the car is a new 2013 model or not, the car would be ‘new’ to the purchaser. “A person must still come in to the Tax Commissioner every year and get the decal (sticker).”
She noted that people think when they pay the TAVT that they are through but that is not the case.
“You still have to come in and get the decal (sticker),” she reiterated.
Regarding leased cars, Astin said the leasee would pay charges or fees to the dealership as well as the TAVT. If the leasee chooses to purchase the car at the end of the lease, the leasee would have to pay the TAVT a second time because it is a new title transaction.
“That’s where all the controversy is coming in with the leased vehicles,” she said.
Printed in the February 21, 2013 edition