The new Georgia car tag law is set to take effect March 1. And local tax offices know they’re going to be hit with plenty of questions once the law changes.
In a nutshell, anyone who owns a vehicle and pays a yearly tax on it can continue the same routine for as long as they own that vehicle.
However, once a person gets another vehicle, they must pay a one-time ad valorem title tax (TAVT) based on the value of the vehicle. Likewise, they must continue to pay a yearly $20 registration fee.
For vehicles purchased between Jan. 1, 2012, and Feb. 28, 2013, the buyers of those vehicles have the choice to opt in to the new system or to continue under the current ad valorem tax structure.
The tax rate for fiscal year 2013 is 6.5 percent of the value of a purchased vehicle. That rate will go up to 6.75 percent in fiscal year 2014 and seven percent in all future years. If the state’s revenue targets aren’t met, legislators could raise the rate up to nine percent, according to a synopsis of the legislation from the Association County Commissioners of Georgia.
Tax commissioner Louise Watson said her office has received training on the new law, but she said it take some time before the public understands how the changes will affect them. Her staff will likely have to explain what has happened to numerous people who come into the tax office confused.
“Our staff has gone to the meetings (regarding the new law) and we have to be understanding when people come in and be as calm and sympathetic as we can,” said Watson. “But we have to let them know that this is the law and it’s our job to enforce it.”
Perhaps the greatest potential sticking point for people regarding the new law is the determination of “fair market value” regarding used vehicles. The Georgia Department of Revenue sets a value on make and models for vehicles, but the condition of a used vehicle can vary.
“If you purchase a vehicle and have a bill of sale for $2,000, but the state says the value of the vehicle is $3,200, then you’ll have to pay taxes on the $3,200,” she said.
Watson noted that people will be able to appeal the value, but it will involve an up front 100-percent payment of the state’s tax. The vehicle owner can then go to the tax assessor’s office and fill out an affidavit appealing the value. The assessor’s office will then be in charge of reviewing the appeal. And a refund can be issued to the vehicle owner if the appeal is ultimately approved.
Watson said the one-time tax will come as a shock to some people who have a hard time paying the current yearly tax.
“Some people have a hard time already with paying $38, but then they might have to pay an additional $200 to get a title and it’s going to hurt,” she said.
People who purchase a vehicle from outside of Georgia will also be required to pay the tax. Likewise, anyone moving into Georgia must pay the one-time tax on all vehicles they move with them, Watson said.
Anyone wanting to calculate the DOR value of a vehicle can visit: https://etax.dor.ga.gov/AdValorem/Default.aspx or visit www.etax.dor.ga.gov. In the search field, enter “AdValorem Tax Lookup.”