TAVT (TITLE AD VALOREM TAX)

HOUSE BILL 386

Frequently Asked Questions

New Title Ad Valorem Tax (TAVT) Form

How does this legislation impact motor vehicles?
What happens on March 1, 2013?
How is fair market value determined?
What if my vehicle is NOT listed in the motor vehicle valuation data base?
How is the TAVT calculated?
How is the trade-in value determined?
What is the TAVT rate?
Where do I apply for my title and pay the TAVT?
Is it possible to go the Department of Revenue Motor Vehicle Division Headquarters to transfer a title?
Can the fair market value of the vehicle be appealed?
Can the owner of a vehicle purchased prior to March 1, 2013 avoid payment of future ad valorem taxes on their vehicle?
When will I first be able to opt in to the new system?
Can a vehicle be transferred to an immediate family member or inherited by an immediate family member without having to pay the TAVT?
What sort of evidence will be required to prove that it is a family transfer or inheritance?
I will become a new resident of Georgia after March 1, 2013. How does this affect me?
What happens if the TAVT is not timely remitted to the county tag agent?
I am a Georgia resident but I plan to buy a car in an adjoining state. Will I be required to pay the TAVT when I title this vehicle in Georgia?
Are leased vehicles subject to the TAVT?
What vehicles are not subject to the TAVT?
Are salvage vehicles subject to the TAVT?
I plan to donate my car to a non-profit organization. Does the non-profit organization have to pay the TAVT when the title is transferred to its name?
Does the TAVT apply when a title is corrected, replaced or reissued to the same owner?
Are vehicles owned by certain veterans exempt from the TAVT?

How does this legislation impact motor vehicles?

  • House Bill 386 was passed by the 2012 Georgia General Assembly and provides for a new method of taxation for certain motor vehicles effective March 1, 2013.

 

What happens on March 1, 2013?

  • Vehicles purchased on or after March 1, 2013 and titled in this state will be exempt from sales and use tax and the annual ad valorem tax, also known as the "birthday tax". These taxes will be replaced by a one-time tax that is imposed on the fair market value of the vehicle called the title ad valorem tax fee ("TAVT"). In addition to the TAVT, if you live in one of the three transportation districts that approved the Transportation Special Purpose Local Option Sales Tax ("T-SPLOST") referendum in July of 2012, you will also be required to pay up to fifty dollars in sales tax when purchasing a motor vehicle.

 

How is fair market value determined?

  • Vehicles identified in the Georgia Department of Revenue motor vehicle valuation data base have a fair market value calculated by averaging the current wholesale and retail values of the motor vehicle pursuant to O.C.G.A. § 48-5-442. Accordingly, the fair market value for purposes of the TAVT will generally be the same as the fair market value used in the current ad valorem tax system.

 

What if my vehicle is NOT listed in the motor vehicle valuation data base?

  • If your vehicle is a used vehicle and not currently in the motor vehicle valuation data base, the value will be the higher of (1) the value listed on the bill of sale or (2) the value listed in a used car market guide designated by the Revenue Commissioner.
  • If the vehicle is "new" and not currently in the motor vehicle valuation data base, the value will be taken from the bill of sale less any rebate. Note that any trade-in value is subtracted before the tax rate is applied.

 

How is the TAVT calculated?

  

How is the trade-in value determined?

  • As defined in House Bill 386, the "trade-in value" is the value of the motor vehicle as stated in the bill of sale for a vehicle which has been traded in to the dealer in a transaction involving the purchase of another vehicle from the dealer.

 

What is the TAVT rate?

  • For the period from March 1, 2013 until December 31, 2013, the TAVT rate is 6.5%
  • For the period from January 1, 2014 through December 31, 2014, the TAVT rate is 6.75%
  • For the period from January 1, 2015 through December 31, 2015, the TAVT rate is 7.0%
  • For future years the rate may be adjusted, but in no event can the rate exceed 9%. The rate for the subsequent tax years, if increased, will be set by the Revenue Commission and published by August 31.

 

Where do I apply for my title and pay the TAVT?

  • The application for title and TAVT payment must be submitted to the county in which the purchaser registers the vehicle (i.e. county of residence). The TAVT must be paid at the time application for title and registration are made.
  • If you purchase your vehicle at a dealership, the dealer will accept the application for title and TAVT payment on your behalf and deliver the title application and TAVT payment to your county tag agent.

 

Is it possible to go the Department of Revenue Motor Vehicle Division Headquarters to transfer a title?

  • As of March 1, 2013, transfer of ownership for titled vehicles must be taken to the county tag agent in the new owner's county of residence. The only titles that will be issued from DOR MVD Headquarters are salvage titles, replacement titles, and title corrections.

 

Can the fair market value of the vehicle be appealed?

  • Yes, the value can be appealed in the same manner as values for ad valorem tax purposes are appealed.

 

Can the owner of a vehicle purchased prior to March 1, 2013 avoid payment of future ad valorem taxes on their vehicle?

  • If the vehicle was purchased in Georgia between January 1, 2012 and March 1 2013 and titled in this state, the owner is eligible to opt into the new system. If you qualify to opt in, you will get credit for any sales tax and ad valorem tax previously paid up to the amount of TAVT due. However, if the sales tax and ad valorem tax previously paid is less than the TAVT due, you will need to make up the difference when you opt-in. This option must be exercised before January 1, 2014.

 

 When will I first be able to opt in to the new system?

  • The earliest date that qualified owners will be able to opt in to the new system is March 1, 2013.

 

Can a vehicle be transferred to an immediate family member or inherited by an immediate family member without having to pay the TAVT?

  • House Bill 386 defines "immediate family member" as one's spouse, parent, child, sibling, grandparent, or grandchild.
  • Whether a motor vehicle transferred or inherited by an immediate family member will be subject to the TAVT will depend on whether the former owner had paid TAVT:
  • If the former owner of the vehicle had not paid TAVT and was paying annual ad valorem tax on the vehicle, the new owner may choose to either:
  1. Continue paying annual ad valorem tax on this vehicle, and therefore not be subject to the TAVT OR
  2. The new owner may elect at the time of transfer to pay the TAVT based on the current fair market value of the vehicle at the applicable rate for the current year.
  • If the vehicle is acquired from a family member who paid the TAVT at the time they purchased the vehicle then the new owner's TAVT rate will be 0.50% (one-half of one percent). In this case the new owner does not have the option to revert back to the annual ad valorem system.

 

What sort of evidence will be required to prove that it is a family transfer or inheritance?

  • The transferor and transferee will have to complete an affidavit affirming that such persons are immediate family members. Anyone who falsely attests shall be subject to a penalty up to $5,000.

 

I will become a new resident of Georgia after March 1, 2013. How does this affect me?

  • New residents moving into Georgia are required to pay 50% of the TAVT within 30 days of moving to the state and the remaining 50% must be paid within the next 12 months.

 

What happens if the TAVT is not timely remitted to the county tag agent?

  • If the purchase is made at a dealership, the dealer has 10 days from the date of purchase to remit the title application and TAVT payment to your county tag agent. If remitted later than 10 days from the date of purchase the dealer is liable for 5% of the TAVT owed plus an additional 5% for each month payment has not been remitted. A second penalty also applies to dealers if they do not remit the title application and TAVT payment within 30 days of the date of purchase.
  • For non-dealer sales, i.e. a "casual sale", the buyer must remit the application for title and the TAVT payment within 30 days of the purchase of the vehicle. If paid later than 30 days there will be a penalty of 10% of the amount of the TAVT owed plus an additional 1% per month for every month late.

 

I am a Georgia resident but I plan to buy a car in an adjoining state. Will I be required to pay the TAVT when I title this vehicle in Georgia?

  • Yes

 

Are leased vehicles subject to the TAVT?

  • Yes, the leasing company will have to pay the TAVT. The entity or individual leasing the vehicle will be subject to sales tax on the lease payments.

 

What vehicles are not subject to the TAVT?

  • Non-titled vehicles and vehicles that do not meet the statutory definition of a motor vehicle will continue to pay the annual ad valorem tax. For example, the following do not qualify as titled vehicles:
    • Trailers.
    • Pull-behind campers.
    • Any vehicle for which a title cannot be issued, such as
  1. Vehicles manufactured prior to 1963.
  2. 1963 -1985 year model vehicles that do not have a current Georgia title.

 

Are salvage vehicles subject to the TAVT?

  • Yes. The TAVT rate is 1% of the fair market value of the motor vehicle.

 

I plan to donate my car to a non-profit organization. Does the non-profit organization have to pay the TAVT when the title is transferred to its name?

  • If a vehicle is donated to a 501(c)(3) non-profit organization for the purpose of being transferred to another person, then that organization shall only pay a TAVT rate of 1% of the fair market value of the motor vehicle when the vehicle is titled in the name of the non-profit organization.

 

Does the TAVT apply when a title is corrected, replaced or reissued to the same owner?

  • No

 

Are vehicles owned by certain veterans exempt from the TAVT?

  • Yes, vehicles acquired by veterans who would otherwise receive an exemption from ad valorem tax will also be exempt from the TAVT.