Over the course of the next year there are huge changes coming to the tax policies on cars in the state of Georgia. Beginning on March 1, 2013 there will no longer be any sales taxes charged on new or used cars in Georgia. Sales taxes will be replaced with a new 6.5% title in tax in 2013 which will increase to 6.75% in 2014. This will apply to both dealership and private party purchases.
The title tax is not due every year and Ad Valorem taxes are being eliminated on cars purchased after March 1, 2013. You will continue to pay Ad Valorem taxes on any cars that you currently own.
The title tax will be charged on a fair market value, not the sale price. We have no idea how this will be determined.
If you purchase a car between January 1, 2012 and March 1, 2013 you will have the opportunity to opt-into the program after it begins on March 1, 2013 (but before December 31, 2013). You will have to pay the difference between the sales tax that you paid when you purchased the car (if you live in a 6% county).
You will still have to get an annual emissions inspection in counties where it is currently required. Tag renewal fees are also still going to be charged.
The biggest difference between the new program and the current sales tax structure is that there are no trade credits anymore. The title tax will be assessed on the vehicle value, not the net cost after trades are included.
What does this mean for you? Between now and March 1st of next year you should trade your car in to get the last chance at a discount of registration taxes. We will be able to give you the same trade credit towards sales tax that we always have until then. You will have to pay an annual ad valorem tax for as long as you own the car but that will be much less than the sales tax would have been on your entire purchase in most cases.
It is going to be a major change but we will do our best throughout the process to keep you informed and offer you the most beneficial options available.