MadisonJournalTODAY

Big changes are coming to those who buy a car — used or new — in the upcoming year.

Beginning next March, car purchasers will no longer be required to pay an annual ad valorem tax (also called the “birthday tax”) or state and local taxes on the purchase of a vehicle. Instead, those taxes will be replaced with a one-time state and local title tax that must be paid every time a vehicle’s ownership is transferred. There is an exception when the vehicle is transferred to an immediate family member. These changes are part of house bill 386.

County tax Louise Watson said there will be no change for car owners until they purchase another vehicle.

“They will continue to pay their ad valorem tax and renewal registration fees on their birthdays, as usual,” Watson said.

She added that even after paying the title tax on a vehicle, owners will still be required to pay the $20 renewal registration fee each year.
Watson said her office will not undergo training on the new tax requirements until January and she pointed out that there could be changes in the current information about the new tax.

The tax rate on purchases and transfer of ownership will be 6.5 percent in FY2013, 6.75 percent in FY2014 and 7 percent thereafter — unless the state revenue target is not met, in which case the tax could be adjusted up to 9 percent.

Values will not be based on what you paid for the car, but on what the state estimates the value to be, Watson said.

This title tax will be collected by the county tax commissioner’s office where the vehicle is registered, just as the annual ad valorem tax is now, Watson said.

A vehicle can be transferred to an immediate family member (a spouse, parent, child, sibling, grandparent or grandchild) without requiring a title tax, but an annual ad valorem tax will continue to apply to the vehicle.

Those claiming transfer to an immediate family member must supply the tax commissioner with an affidavit affirming that they are immediate family members. Falsification of an affidavit can carry state and local penalties of up to $5,000, according to information from the state.
The title tax will also apply to those moving into the state, as well as to Georgia residents who purchase a vehicle out of state.

Veterans who are exempt from ad valorem tax will also be exempt from the title tax.