Do I Still Have to Pay the Ad Valorem Tax for my Car?

I know a lot of you have been hearing misinformation about not having to pay the ad valorem tax on your car anymore so I decided to clear that up any confusion here. First, I’ll clearly explain what the ad valorem tax is for people that may not be familiar with it. Generally, an ad valorem tax is a tax based on the value of real estate or personal property. In Georgia, vehicle owners have to pay a tax before or on their birthday every year. However, Governor Deal signed a new law that has changed how the Georgia Department of Revenue will collect this tax in this future. Below are a few answers to some common questions people have regarding the title fee law.

1. When does the new title fee take effect?

This law goes into effect on March 1, 2013.

2. How does the title fee affect the sales of both new and used cars?

On all cars purchased beginning March 1, 2013, there will be a title fee assessed in lieu of state and local sales taxes and the annual ad valorem tax also known as the birthday tax.

3. Is this tax just for cars bought at dealerships?

No, this title fee applies to both new and used vehicles sold either through a dealer or just a sale between people.

3. How much will this new title fee cost?

The fee starts at 6.5% of the fair market value of the car and increases to 7% in 2015.

4. If a customer buys a vehicle prior to March 1, 2013, can they opt into the new title fee system?

Yes, a customer who purchases a vehicle between January 1, 2012 and February 28, 2013 can opt into the title system between March 1, 2013 and January 1, 2014.

5. What about vehicles currently owned?

Owners of motor vehicles titled prior to March 2013 will continue to pay annual ad valorem taxes until the vehicles are sold or transferred.