Tax Changes Coming To Car Sales - Local news, weather, sports Savannah | WSAV On Your Side

Tax Changes Coming To Car Sales

SAVANNAH, GA -

In 2012, the Georgia General Assembly passed House Bill 386. The Chatham County Tax Commissioner, Daniel Powers, says the new law eliminates sales tax and annual ad valorem tax to vehicles purchased on and after March 1, 2013.

Those taxes are replaced by a one time new title tax of 6.5% of the fair market value of the vehicle. Powers said the new title tax will apply to purchases from a dealership as well as casual sales between individuals and is paid when you transfer the title in your name.

Powers said once the title tax is paid on the vehicle you'll only have to worry about vehicle registration requirements like annual tag renewal fees and decals. The tax commissioner said those who buy cars from an individual rather than a dealer will feel the most impact.

"That 6.5 percent has to be paid before that title can be transferred, whereas in the past that was not the case. You registered the vehicle and you paid the annual birthday tax," said Powers.

Powers said if you can't pay the title tax up front then the transaction can't be completed.

For those who lease a car, the current legislation doesn't eliminate all the same taxes.

"A lease doesn't fall in to the exemptions of sales taxes under the new legislation at this time," said Powers.

Powers said there is a new bill that specifically targets leases so it doesn't become a more expensive option.

Those who purchased a vehicle in Georgia between January 1, 2012 and March 1, 2013 can also opt in.

This is the link to the answers to the most frequently asked questions about the new title tax  http://onlinemvd.dor.ga.gov/Tap/faqs.aspx

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