MILLEDGEVILLE — Tax reform, via House Bill 386, enacted by the Georgia General Assembly’s 2012 session created the title ad valorem tax (TAVT) effective March 1.
Georgia’s new car tax eliminated sales and the annual ad valorem (birthday) taxes on automobile purchases in favor of a one-time title tax. Owners pay the title tax when they register a new or used vehicle and apply for the title at the county tax commissioner’s office.
The tax is calculated at 6.5 percent of the vehicle value. Next year, the TAVT rate bumps to 6.75 percent and could go as high as 9 percent in the future if revenue targets aren’t met.
This new system only applies when ownership shifts through title exchange. All others continue operation under the current system, paying the annual tax and fees.
Not even two weeks into the new state car tax system lawmakers acted quickly to clean up the old legislation by passing House Bill 266.
Several oversights including a double tax on leased vehicles were corrected. HB 266 removes the monthly sales and use tax from leases.
Leasing companies are required to pay just the title tax.
The opt-in parameters and fair market value also changed.
The original TAVT bill said owners who bought a vehicle between Jan. 1, 2012 and Feb. 28 can opt-in to the new system if the owner proves sales and property taxes already paid exceed the potential TAVT payment. If the amount is less, the individual can pay the difference and convert.
House Bill 266 changed the opt-in deadline from Dec. 31 to Feb. 28, 2014.
Now, vehicles purchased outside of the state can also jump to the TAVT.
These individuals will only be credited for Georgia sales tax paid not the old reciprocal agreement that credited owners for out of state dealer tax payments, according to Baldwin County tax commissioner Cathy Settle.