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New vehicle sales tax rate goes up this year

Opt-in period ends soon for one-time charge replacing ad valorem ‘birthday’ tax

POSTED: January 3, 2014 11:24 p.m.

The new Title Ad Valorem Tax increased at the start of the new year, 10 months after its implementation. 

The tax began last March in response to a new state law that changed the way motor vehicles were taxed. 

TAVT allows taxpayers to trade in annual payment of their car’s tax for a one-time fee of 6.75 percent of the vehicle’s worth. License plate decals still need to be purchased annually for $20. 

The former ad valorem tax was paid every year along with license tag renewals and was often called the “birthday tax.” 

Those who already own a car purchased before January 2012 will continue to pay the old ad valorem tax each year with their tag renewals. People who have purchased a car between Jan. 1, 2012, and Feb. 28, 2013, can go to the tax commissioner’s office at the Hall County Government center on Browns Bridge Road to opt into the one-time fee instead of continuing to pay the birthday tax.

The deadline to opt in is Feb. 28, and vehicle owners will need to bring in their Georgia’s drivers license with a Hall County address and bill of sale to complete the process.

“That is the last day if you are eligible to opt in and you don’t take the initiative to do that, if you wait until March 1, you will not be able to opt in,” Hall County Tax Commissioner Darla Eden said. “There is no extra week. That’s the very last day the state of Georgia will allow you to opt in if you are eligible to opt in. There is no grace period.” 

Eden said the office is sending out some 250 letters a week to eligible vehicle owners letting them know they qualify for the one-time tax and encouraging them to take advantage before the deadline. 

Vehicles purchased after Feb. 28, 2013, are automatically entered into the new TAVT system. Those purchased before the start the new year will be charged the lesser rate of 6.5 percent. 

Eden said it’s important for taxpayers to be aware the rate is based on the fair market value or purchase price of the car, whichever is higher. 

To help taxpayers better prepare, a title tax calculator is available on the Hall County website, 

State and local governments will split the funds from the new title tax, with local governments guaranteed a total base amount of $1 billion, plus 2 percent growth per year through 10 years. The state takes a larger percentage of the funds initially because the ad valorem tax will still be collected on vehicles. The local tax share starts at 43 percent in 2013 and rises to 72 percent in 2022.

Eden said the revenue generated through the tax in 2013 was approximately $2 million each month, with 57 percent going to the state. This year, 55 percent will go to the state and 45 percent will stay local. 

Eden said the change in the law resulted in an increased workload for the tax office but several new initiatives were started to help people get through the lines quickly.

In addition to installing an information desk and call center to make sure people have the documents they need, Eden said employees are getting regular training on the new law.

Purchasing from a dealer, an individual seller or a neighbor can affect the total cost of the tax. Clerks are able to offer some direction when needed.

“They’re more advisers than they used to have to be,” Eden said. “Because they’re helping people determine which system they need to go into, if they need to go into the new TAVT or if they need to go into the old birthday tax ad valorem.”


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