But school officials are also concerned about the uncertainty the change is causing to their budgeting process, which is currently under way for the Fiscal Year 2013-2014.
“It’s definitely hard to budget now because we don’t know what to expect,” said Carroll County Schools Superintendent Scott Cowart. “Nobody can tell us what we’ll have. The local folks are trying to help us, but the state hasn’t been able give an estimate of what it’s going to do.”
Cowart said the school system has experienced 10 straight years of state funding reductions and any changes in the formula is very concerting.
“We don’t get state numbers until mid-May and local taxes in June,” he said. “We have to make an estimated budget at that point. The new tax will have been in effect only a couple of months, so we have no idea how it will play out.”
Cowart said no one at the state level can give local tax workers a good estimate on tax revenues.
“It’s not the fault of local folks, they’re caught in the middle of a difficult situation,” he said. “They’re giving us all the info they can, but nobody knows the impact yet.”
Cowart said he’s sure there will be revenue, but no one knows if it will be as much as in past years.
Carrollton school officials are having similar concerns.
“It’s somewhat nebulous for us at this time, given all the variables,” said Carrollton City Schools Superintendent Scott Cowart. “It’s a source of revenue for us and it’s difficult to budget for it, not knowing what the amount will be.”
Edwards the changes will have a big effect on education special purpose local option sales tax (ESPLOST) revenue. The new law eliminates sales tax on new vehicle sales, which means the school systems will lose the 1-cent ESPLOST portion of that tax.
He said the city school system is awaiting some guidance from county Tax Commissioner Vickie Bearden, who will be attending state workshops on the new taxation system.
“We’re hoping she will get some guided direction about how collections will occur and provide us with information on changes in the ad valorem revenue,” Edwards said. “There’s some trepidation on everyone’s part at this point. It’s difficult to predict. It was somewhat predictable in the past because we knew what the average was.”
In past years, car owners paid the sales tax at the time of purchase and an ad valorem tax, based on current vehicle value, every year with tag purchases. That changed with the passage of House Bill 386 in the 2012 General Assembly session.
Under the new system, all vehicles purchased on March 1 and after will follow the new rules. Instead of sales tax and ad valorem taxes, the owner will pay a one-time title tax of 6.5 percent at the time of purchase. The title tax will increase to 6.75 percent for vehicles purchased in 2014 and 7 percent for vehicles bought in 2015. Once the title tax is paid, car owners will only need to pay the annual $20 tag renewal fee.
Car owners who purchased their vehicles before Jan. 1, 2012, will continue to pay the ad valorem taxes each year, plus the $20 renewal fee.
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.