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Motor Vehicle Tax changes Q&A

By Staff
GAINESVILLE - Hall County Government officials are continuing their efforts to inform taxpayers about legislation enacted by the Georgia General Assembly in 2012, creating 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.

Tax Commissioner Darla Eden made a presentation about the changes to the county commission Thursday night, with commission chairman Dick Mecum expressing some concerns about them. (See separate story.)

The following is a ''Q&A'' developed by the Association County Commissioners in Georgia (ACCG) to help citizens understand the new Georgia Title Ad Valorem Tax:



Why is the system for paying my annual vehicle ad valorem taxes changing?

Legislation enacted by the Georgia General Assembly in 2012 created a new system for taxing bmotor vehicles registered in Georgia. As a result, the annual vehicle ad valorem tax (sometimes called the ''birthday tax'') is being changed to a state and local title ad valorem tax, or TAVT.

How does it work?

Beginning March 1, 2013, state and local sales tax will no longer apply to the purchase of a motor vehicle (except for the 1% 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 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 will only apply to a vehicle 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 own the vehicle.

Does the title ad valorem tax (TAVT) apply to all vehicles or just vehicles purchased through new car dealers?

All vehicles that are purchased on or after March 1, 2013, are subject to the TAVT, regardless of where the vehicle is purchased. Vehicles purchased through a private sale (non-dealer sale) that were previously exempt from sales tax will now be subject to the TAVT.

Are there any exceptions?

There is one exception for any vehicles purchased between January 1, 2012, and March 1, 2013. Owners of these vehicles are eligible to opt-in to the new system. To convert to the new system for free, the owner must prove that the taxes (sales and property) already paid exceed what the owner would have paid through the TAVT. If the amount of taxes paid is less than the TAVT owed, the owner can pay the remaining difference and convert to the new system. This one time option to convert must be exercised by the vehicle owner before December 31, 2013, at their county tax commissioner's office. Vehicles purchased out of state are not eligible to opt-in.

What about tag renewal fees, decals and emission tests?

The law requiring tag renewal fees, decals and emission tests did not change. Therefore, vehicle owners are still responsible for meeting these annual requirements.

Do vehicle owners have to pay the title ad valorem tax when a vehicle title is transferred to a family member?

Vehicle titles transferred between family members, including spouses, parents, children, siblings, grandparents or grandchildren, will be handled as follows:

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