Georgia County Government - January/February 2013 - (Page 35)

Feature System for Taxing Motor Vehicles to Change March 1, 2013 By Clint Mueller T ax reform legislation enacted by the Georgia General Assembly in 2012 created a new system for taxing motor vehicles registered in Georgia. As a result, the annual vehicle ad valorem tax, often called the “birthday tax,” will change to a state and local title ad valorem tax on March 1, 2013. Beginning March 1, 2013, state and local sales tax will no longer apply to the purchase of a motor vehicle (except for the 1 percent transportation tax on the first $5,000 of any vehicle sale in regions that have this tax). All vehicles purchased or transferred into ownership after this date also will no longer be subject to the annual ad valorem tax. Instead, these vehicles will be subject to a new, one-time state and local title ad valorem tax (TAVT) that is paid at the time the owner registers the vehicle and applies for the title with the county. The new system for taxing vehicles only applies when the ownership of the vehicle is transferred through a title exchange. All other vehicle owners will continue to operate under the current system and pay the annual ad valorem taxes until they no longer hold title to the vehicle. The title ad valorem tax is collected by the county tax commissioner before a new title is issued and the vehicle is registered. The new title ad valorem tax is calculated at a rate of 6.5 percent of the vehicle’s value, not the sales price, as defined by the Department of Revenue’s motor vehicle ad valorem assessment manual. When there is no value available in the assessment manual, the bill of sale or a reputable used car market guide determines the value. The trade-in value of another motor vehicle will be deducted from the value to get the taxable value. For example, consider an individual who purchases a vehicle with a fair market value of $15,000. He or she also receives $2,500 as the trade-in value for a previously owned vehicle. The title ad valorem tax that would be due when the individual applies to have the title issued is $812. The Georgia Department of Revenue (DOR) has developed a title ad valorem tax calculator to help people determine the amount of taxes they will owe that is available at: http://onlinemvd.dor.ga.gov/ Tap/welcome.aspx. All vehicles purchased on or after March 1, 2013 are subject to this new system, regardless of where the vehicle is purchased. Vehicles purchased through a private sale that were previously exempt from sales tax, such as vehicles that are sold between individuals and not through a dealer, will now be subject to the title ad valorem tax. Following are other important changes that will go into effect on March 1, 2013: • Vehicles transferred from another state to Georgia will be subject to the title ad valorem tax in two installment payments, in addition to the title and registration fees that they were responsible for in the past. • Leased vehicles will still be subject to a use tax on the monthly lease payment. The dealership is responsible for paying the title ad valorem tax and may include this cost in the term of the lease. • Vehicle titles transferred between family members, including spouses, parents, children, siblings, grandparents or grandchildren, will be handled as follows: ° Vehicles owned prior to March 1, 2013: The family member who is titling the vehicle has the option to pay the full title ad valorem tax or continue to pay the annual ad valorem tax under the old system. ° Vehicles purchased on or after March 1, 2013: The family member who is titling the vehicle is subject to a 0.5 percent title ad valorem tax. • Title applications must be processed in the county where the vehicle is to be registered. • Salvage vehicles and vehicles donated to charities will pay a reduced title ad valorem tax at a rate of 1 percent. • Certain veterans who were exempt from annual motor vehicle ad valorem tax will also be exempt from the title ad valorem tax. ACCG has developed several tools to assist counties in educating the public about these changes. They are available at www.accg.org by clicking on “Motor Vehicle Tax Reform” in the middle of the page. ■ Clint Mueller serves as ACCG Legislative Director and may be reached at (404) 5225022 or at cmueller@accg.org. All vehicles purchased on or after March 1, 2013 are subject to this new system, regardless of where the vehicle is purchased. Vehicles purchased through a private sale that were previously exempt from sales tax, such as vehicles that are sold between individuals and not through a dealer, will now be subject to the title ad valorem tax. SPRING 2013 www.accg.org 35 http://www.accg.org http://www.accg.org

Table of Contents for the Digital Edition of Georgia County Government - January/February 2013

President's Message
Director's Desk
Chatham County: Cultivating Opportunities to Grow Investments
2013 ACCG Annual Conference Preview
Eight Annual Georgia County Excellence Awards
County Government : Emergency Management Agencies: Prepared Today for Tomorrow's Disaster
Federal Update: The Fiscal Cliff: What's in the Final Deal and When's the Next One Coming?
Counties & the Law: Avoiding First Amendment Liability in the Employee Discipline
System for Taxing Motor Vehicles to Change March 1
News & Notes
Index of Advertisers

Georgia County Government - January/February 2013

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