Georgia County Government - January/February 2013 - (Page 35)
System for Taxing Motor Vehicles
to Change March 1, 2013
By Clint Mueller
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/
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
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
• 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
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
Clint Mueller serves as ACCG Legislative
Director and may be reached at (404) 5225022 or at firstname.lastname@example.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
Table of Contents for the Digital Edition of Georgia County Government - January/February 2013
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