House Bill 386, passed in the 2012 General Assembly session, authorizes a one-time title tax of 6.5 percent of the fair market value, not the sales price, of the vehicle, as determined by the Georgia Department of Revenue. The rate of the title tax will rise to 6.75 percent next year and 7 percent in 2015.
“The title tax is not due every year, but only each time the vehicle is sold and titled,” said Carroll County Tax Commissioner Vickie Bearden. “It applies to sales between individuals, as well as dealer sales.”
Bearden said people who buy a car from a dealership probably won’t notice a difference, since the new title tax will be about the same as the sales tax buyers have been paying. The tax will be figured into the financed price of the car.
Car owners will continue to pay the ad valorem tax on vehicles that they currently own, she said. All tag buyers will also pay the $20 tag fee.
People who purchased cars between Jan. 1, 2012, and before March 1 of this year have an option to either pay the 6.5 percent, one-time title tax or stay with the annual ad valorem tax. However, they have to visit the county tag office between March 1 and Dec. 31 of this year and choose the opt-in option.
Bearden said the county tag office has a tax calculator that shows the cost under the ad valorem and title tax options, so car owners can make their best choice.
“However, if they bought their car during that time period, but are late in buying their tags, they will have to pay the ad valorem tax for this year,” she said, “but they can still opt in.”
Vehicle purchased out of state are not eligible for the option, she noted.
Bearden said information about the new law will be printed on the envelope in which tag bills are mailed.
Here are some other provisions of the new law:
• Those who bought cars between Jan. 1, 2012, and Feb. 28, 2013, will have the option to pay the ad valorem tax for the life of their car, or to opt into the new title tax. The opt-in period lasts from March 1 until the end of 2013. Those who opt in will not get refunded for any ad valorem tax they have already paid, but will get credit for paying sales tax, if the car was not purchased in a private sale.
• People who move into Georgia with a car after March 1 will have to pay the new tax on the market value of any vehicles when they register the cars in Georgia. New out-of-state residents can pay half the fee up front and will have the remainder of the year to pay the balance.
• Vehicles passed between immediate family members — spouses, parents, children, siblings, grandparents or grandchildren — will pay a reduced fee of 0.5 percent of the car’s worth to title the vehicle, provided the full one-time title tax has already been paid.
• People who were exempt from paying the annual car tax, such as disabled veterans, are exempt from the new tax.
• Vehicles that aren’t titled, such as boats and trailers, aren’t affected by the new law. Owners will continue to pay ad valorem tax on them.