Ad valorem tax on cars (Norcross: for sale, 2015, how much)

[jerseygeek]

I purchased a 2011 Toyota Corolla in Nov 2011 for which I already paid the sales tax. I got a letter for registration renewal which states that I have to pay $200 for Ad Valorem tax and $20 for tag. $200 for Ad valorem tax is just ridiculous.
Isn't the Ad Valorem tax a replacement for Sales tax on the vehicle? I already paid the sales tax for my car when I purchased it.

[flyonpa]

Nope.. Its another tax you have to pay each year on your birthday...

[cittic10]

Welcome to GA.

Just to correct/clarify the above post, it's due on your birthday. You don't have to pay it on your birthday.
"Ad Velorum" means based on the value so as the car goes down in value, so will the taxes.
Now that said, this system is changing in 2013 so as far as I know this is the last year of Ad-v taxes.
Instead there will be a very expensive title tax that is not transferable to any other state so you registered the car in the nick of time.

[BobKovacs]

Be thankful it's only $200- must be a pretty cheap car, as the tax amount is based on value.

[Eresh]

Originally Posted by BobKovacs

Be thankful it's only $200- must be a pretty cheap car, as the tax amount is based on value.

It also depends on the millage rate where the person lives.

[roxyrn]

Happy Birthday from the state of Georgia!

[livinginbuffalo]

I actually was waiting to buy a new car until after March of next year. My understanding is that in March 2013, any car purchased after that date will not have ad valorem but any car you already own will still have it. I also thought the title tax was basically the sales tax and not anything additional on what you already pay on a new car so, again, we are waiting to buy so as to avoid the ad valorem. Am I wrong in thinking waiting is better?

Originally Posted by cittic10

Welcome to GA.

Just to correct/clarify the above post, it's due on your birthday. You don't have to pay it on your birthday.
"Ad Velorum" means based on the value so as the car goes down in value, so will the taxes.
Now that said, this system is changing in 2013 so as far as I know this is the last year of Ad-v taxes.
Instead there will be a very expensive title tax that is not transferable to any other state so you registered the car in the nick of time.

[livinginbuffalo]

Beginning on that date, a big change in Georgia's tax laws will eliminate that tax for motorists. In its place, a one-time title tax will come into being for purchases of new or used cars after that date.

The big question: will the new tax cost motorists more?

For most people, the answer is no.

Motorists who purchase a new or used car or truck now pays a sales tax on the vehicle, then a once-per-year tax based on the value of the vehicle. That fee is paid out when the vehicle's tags are renewed each year.

As a result of this change, the ad valorem tax deduction vehicle owners have been able to take will go away.

For purchases on or after March 1, 2013, owners will pay a title tax of 6.5 to 7 percent on the purchase of the vehicle.

Buy a car, truck or used vehicle right now and you will pay a sales tax and on top of that--on your birthday--you'll pay a once-a-year Ad-Valorem tax based on the value of the vehicle.

"The title fee takes off the sales tax. There is no sales tax and there is no ad valorem on the car--a one-time title fee until 2015 will be less than the sales tax you pay on your vehicle," said Rep. Tom Rice (R-Norcross).

For car owners who have been paying an ongoing ad valorem tax each year on their vehicle, they will continue to pay that tax as long as they own that vehicle.

But under the new tax law and rules, motorists will not have to pay more.

For example, a motorist purchasing a new vehicle for $40,000 today pays sales tax -- 7 percent in most Georgia counties -- which in most counties would come to $2,800. After that, motorists continue paying an annual ad valorem tax based on the value of the vehicle. In this example, the motorist would pay about $700 per year, which comes with the license plate renewal.

After the new tax law kicks in next March, that same motorist would end up paying a one-time title tax that would come out to about $2,800. That's it. No sales tax; no annual ad valorem tax.

That would allow the annual out-of-pocket fee for license plates to drop significantly.

[cwkimbro]

Originally Posted by livinginbuffalo

I actually was waiting to buy a new car until after March of next year. My understanding is that in March 2013, any car purchased after that date will not have ad valorem but any car you already own will still have it. I also thought the title tax was basically the sales tax and not anything additional on what you already pay on a new car so, again, we are waiting to buy so as to avoid the ad valorem. Am I wrong in thinking waiting is better?

You don't have to wait!

"Rep. Rice said that anyone who buys a new or used vehicle in 2012, but wants to be included in the new law which will formally take effect on March 1, 2013, may do so. The state will allow 2012 purchasers -- who, in 2012, pay the state sales tax as well as the first year of ad valorem tax on the vehicle -- to apply those 2012 taxes toward the new "title tax" next year and be done with sales taxes and ad valorem taxes on their vehicle forever. "
-http://www.11alive.com/news/article/234824/40/Sales-tax-AND-ad-valorem-tax-on-vehicles-in-Georgia-being-replaced-by-title-tax


I found it in the bill as passed just to make sure....

"(10) The owner of any motor vehicle purchased in this state for which a title was issued in this state on or after January 1, 2012, and prior to March 1, 2013, shall be authorized to opt in to the provisions of this subsection at any time prior to January 1, 2014, upon compliance with the following requirements:
(A)(i) The total amount of state and local title ad valorem tax fees which would be due from March 1, 2013, to December 31, 2013, if such vehicle had been titled in 2013 shall be determined; and
(ii) The total amount of state and local sales and use tax and state and local ad valorem tax under Chapter 5 of Title 48 which were due and paid in 2012 for that motor vehicle and, if applicable, the total amount of such taxes which were due and paid for that motor vehicle in 2013 shall be determined; and
(B)(i) If the amount derived under division (i) of subparagraph (A) of this paragraph is greater than the amount derived under division (ii) subparagraph (A) of this paragraph, the owner shall remit the difference to the tag agent. Such remittance shall be deemed local title ad valorem tax fee proceeds; or
(ii) If the amount derived under division (i) of subparagraph (A) of this paragraph is less than the amount derived under division (ii) of subparagraph (A) of this paragraph, no additional amount shall be due and payable by the owner."

-http://www1.legis.ga.gov/legis/2011_12/versions/hb386_HB_386_APP_7.htm

(I'm currently in the market for a new car )

I'm sure this will require a visit to the county tax office, some paperwork, and possible confusion among everyone.... but there is a way to opt-in.

The only downfall to this tax, which hasn't been mentioned in most places. There is sort-of a hidden to a private seller of a used car.

The new law also mandates this tax on a private purchase of a used car between individuals. This means the cost difference between dealers and private sellers will go away... making buying from dealers slightly more attractive than before.

It also means when a private individual chooses how much they can put down on a used car... they will have to factor in taxes. I'm willing to bet that will put a small negative pressure on the resell value of a car between private individuals.

[livinginbuffalo]

Huh, good to know.

In NY, we had to pay tax on a private sale anyway but people would just fudge the sale amount if they wanted to cheat which I don't advocate but that is what people would do.

I'm in no rush to buy especially since we just bought a house that needs some cash to update but it's good to know it can be done.

Thanks, cwkimbro!!