New Georgia Car Tax Affects Private Sales
People planning on buying a new or used car from a dealer or private seller are about to see a new state tax.
The "title ad valorem tax" (TAVT) will come into effect on March 1 and takes away the annual ad valorem tax, where people made an annual payment for their car tags. Also, there will no longer be a sales tax on cars purchased from a dealership.
"It should be a good thing you know, they won't be paying that three to $400 ad valorem every year and the upfront tax from what we understand for now is about a half a percent less," Walsh Honda sales manager, David Komae said.
Bibb County has a seven percent sales tax. The new tax is a half percent lower at six and a half percent which people will pay on the vehicle's value upfront. Komae said people in the market for a new car should not notice a difference because it’s like paying a sales tax. However, when it comes to leasing a car, he's still trying to figure out how the state plans to apply the tax to it.
"It's kind of a cluster right now,” he said. “We don't quite understand exactly how they're going to do it, I'm sure the state will come out with better training for dealerships."
People buying a car from a used car dealership might not see a change as well. The new tax will be factored in with the price but sales manager for J. Franklin Auto Sales, Tim Norris, said the dealer will notice a difference.
"We'll be paying the tax upfront for the customer,” Norris said. “So essentially money is still coming from the customer but you'll be able to pay it monthly to us."
The biggest change will be with private sales. Currently, there isn’t a sales tax on private purchases. However, the new tax will require the buyer to pay the six and half percent tax upfront on the value of the vehicle not the purchase price when transferring titles. The value of the vehicle is determined by the Department of Revenue. The public can go to http://onlinemvd.dor.ga.gov/TAP?Welcome.aspx to see the tax on a car.
People not intending to purchase a car before March 1 will continue to pay the annual ad valorem tax on their current car.
Vehicles from out of state needing new tags will be subject to the new tax and will pay it in two installments.