New Georgia Vehicle 'Title Tax' Takes Effect in March 2013

HB 386 replaces the annual ad valorem tax on newly purchased vehicles.

The so-called "birthday tax" that Georgia vehicle owners pay will end in March 2013 – for people who purchase a new vehicle.

Vehicles purchased on or after March 1 and titled in the state will be exempt from sales and use tax and the annual ad valorem tax, according to the Georgia Department of Revenue.

Instead, due to the passage of House Bill 386, these vehicles will be subject to a new, one-time title ad valorem tax that is based on the value of the vehicle.

If you buy a new vehicle where you were paying sales tax on it, now it's called a title tax and is pretty much the same rate. 

It's going to be 6.5 percent in 2013, 6.75 percent in 2014, in year three it will increase to seven percent and so on. However, you will not be paying the annual ad valorem tax on that new vehicle.

Another difference in the new law is that it will affect individuals who purchase a vehicle from another individual. The private sales that were traditionally exempt from being taxed will now be.

The tax is based on the fair market value of the vehicle at the time of the purchase or the sales price, whichever is higher. 

You will continue to pay the annual ad valorem tax on vehicle(s) that you currently own.

To help residents understand the changes, Cherokee County Tax Commissioner Sonya Little said she will place an outline of the changes, answers to commonly asked questions and a link to the tax calculator on the agency's website.

Other aspects of the new law:

  • The new title tax is based on a percentage (6.5 percent in 2013) of the fair market value of the vehicle, not the sales price, as determined by the Georgia Department of Revenue.
  • If you purchase a vehicle in Georgia between January 1, 2012, and March 1, 2013, you have the option of paying the new title tax instead of the current annual ad valorem tax. You have from March 1, 2013, until December 31, 2013, to opt into the new program. Note: Vehicles purchased out-of-state are not eligible to opt 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.

Will the new Georgia tax affect your decision to purchase a new vehicle? Share your thoughts in the comments below.

Phil McCall February 02, 2013 at 09:51 PM
Frank - You framed the argument of passage of HB 386 as republican, I pointed out democrats also voted for HB 386 by stating correctly HB 386 was a bi-partisan passed bill and not just a republican bill. It is false to say one party when both parties passed HB 386. I agree HB 386 is a tax increase - you & I do NOT disagree on that point. I define outlandish tax increases to include "revenue neutral" that our republican BOC voted in July, and the previous tax increases heaped on us by both our BOC and BOE. I also believe HOST and TSPLOST fell into the category of outlandish tax increases and I was glad to see the democrats and republican voters recognized the tax increases for what they were - and voted both down.
Debra DeBord February 28, 2013 at 10:13 PM
My mother is 70 and by no means wealthy. Some of those seniors paid the same type of tax that you now pay. With inflation considered, I am sure they paid amounts similar to yours. Would you rather pay $1300 a year forever or just pay that amount till you reach 65 and then get a cheaper rate? The seniors have paid their fair share of the taxes which go to pay for education. They paid for my education and yours. If they have children, they even paid for their kids education. And if the seniors do have some money (probably not wealthy) since you only pay $1300 a year, you probably aren't living in the wealthiest neighborhood, they earned it and most of them scrimped and saved to get it. Unlike a lot of people today, they saved for what they wanted & needed instead of "charging" it (which in up costing more in the long run). What is wrong with that? Nothing. I think everyone hopes to have some money and maybe a paid for house when they get in their senior years and not have the government keep taxing them excessively until they die.
maggie mcgee July 04, 2013 at 08:55 AM
My husband and I are retired and moving to GA in a couple of months. I've read the article twice and I'm still confused. Should we buy a new vehicle in another state to avoid these taxes? I've never heard of paying tax on the life of a vehicle. Is it me ?
maggie mcgee July 04, 2013 at 09:03 AM
What is a "birthday tax"?
mary September 06, 2013 at 09:07 PM
I was getting ready to move into the state. I'm retired. I paid 2,000 sales tax on my 2012 car and 200.00 for license and registration. Every year people in my state paid 100.00 to get a new tag/sticker. Now, I'm told I need to pay a 1400.00 in one day to get a sticker. I can easily move into a surrounding state since Ga is close to several other states. I will look up their taxing rules. Georgia, I don't think so.


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