Changes to ad valorem tax on cars begin

Longer wait times at tax commissioner’s office for those wanting to opt in



FORSYTH COUNTY, Ga. — Tax reform legislation enacted by the Georgia General Assembly in 2012 created a new system for taxing cars registered in the state.

On March 1, House Bill 386 went into effect, removing both sales tax and annual ad valorem taxes for cars bought March 1, 2013 and beyond, replacing them with a single, one-time title ad valorem tax (TAVT).

“It means that automobiles purchased beginning March 1 are no longer subject to sales tax or annual ad valorem tax,” said David D. Hicks, Forsyth County’s chief deputy tax commissioner. “Both have been replaced with a one-time ad valorem tax.”

In the past, on a person’s birthday, they would pay the ad valorem tax along with a $20 registration fee to renew a car’s registration.

Now, that has become a one-time tax paid at the time the title is processed. The value of the vehicle is assessed one time, and thereafter motorists only pay an annual $20 registration fee.

“Now you only pay the $20 registration fee,” Hicks said.

The changes have created slightly longer wait times at the tax commissioner’s office.

“It has increased the transaction time for those wishing to opt in,” Hicks said. “Because that has to be done in person; you can’t just mail it in.”

Hicks said he believes the workload for staff will level out as time goes on.

If a car was bought out-of-state between Jan. 1, 2012 and prior to March 2, 2013, they are eligible to opt-in to the new tax, thus eliminating their birthday tax, regardless of where the car was purchased. People who move into Georgia with a car after March 1 will have to pay the new tax on any vehicles entering into the state when they register their cars in Georgia. New out-of-state residents will have to pay half the fee up front, and will have a year to pay the rest.

Those who choose not to opt in will continue to pay the annual ad valorem tax, as in the past.

Vehicles purchased before Jan. 1, 2012 will not be able to opt in and are subject to the annual ad valorem tax until they are resold and retitled.

The new law is revenue neutral, Hicks said, and has just created an alternate method, meaning there’s not supposed to be a financial impact on the tax commissioner’s office.

The new title ad valorem tax is calculated as a percentage of the car’s fair market value (FMV), not the sales price, as determined by the Georgia Department of Revenue.

The new tax rate will be 6.5 percent of FMV for cars bought March 1, 2013 through Dec. 31, 2013, increasing to 6.75 percent for cars bought Jan. 1, 2014 through Dec. 31, 2014, and to 7 percent for those bought Jan. 1, 2015 and beyond.

Owners who choose to opt in to the TAVT system will need to go to their local county tag office at any time between March 1, 2013 and December 31, 2013 to do so. To calculate TAVT, visit the Georgia Department of Revenue website

EDITOR'S NOTE: An earlier version of this article said that out of state cars could not opt-in.

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