Tag officials say whether a person should opt in depends on several factors, including the value of the car, how much tax they have already paid and how long they intend to keep the vehicle.
“If a person is eligible to opt in, it is definitely something worth looking into,” said Rockdale Tax Commissioner RJ Hadley. “In most cases, the sales tax they’ve already paid covers any tax they may owe this year, and those citizens have only had to pay the $20 tag fee. Needless to say, we’ve had some very happy people leave our office.”
Under House Bill 386, which became effective March 2013, car owners will pay a one-time title ad valorem tax on newly-purchased vehicles. In 2013, the ad valorem tax was 6.5 percent of the value of the vehicle. This year’s ad valorem tax is 6.75 percent of the value.
The dealership pays the title tax on behalf of the buyer, or the buyer pays the tax office directly if the purchase is made from an individual. The cost to renew thereafter is $20.
Those who have vehicles they’ve owned for years are ineligible for the title tax system. They will continue paying the annual “birthday tax” until they buy another car. Once they purchase another car, they will be eligible for the title tax system.
Eligible car buyers who opt in to the title tax system need:
• An original bill of sale and valid Georgia Driver’s License or GeorgiaIdentification Card. The vehicle owner must be present to opt in.
• If you purchase a vehicle from a dealer, the dealer is required to pay the title tax to the tag agent in the county where you reside. If you purchase a vehicle from an individual, the title tax is due when you apply for a title in your name. The new title tax is not due every year but each time the vehicle is sold and titled.
• For new vehicles, the title tax is based on the sales price.
• For used vehicles, the title tax is based on the fair market value.
• If you moved to Georgia and purchased a vehicle within the opt-in eligibility period (January 1, 2012 - February 28, 2013) and the vehicle title was transferred to Georgia during this period, you can opt in. All ad valorem taxes must be paid prior to opting-in.
• All other existing annual vehicle registration requirements, including annual tag renewal fees, decals and emission tests (if applicable), remain in effect for all vehicle owners.
The Georgia Department of Revenue has an online calculator at www.newtitletax.com that can help residents decide what option is best.
For more information, visit your tax commissioner’s office.