“Birthday Tax” System Changes Over on Friday

February 28, 2013

Changes will be implemented tomorrow in regards to Georgia’s Ad Valorem Tax on Vehicles, also known as the birthday tax.

The new system will apply to both new and used car purchases that are made after March 1st, 2013.

Georgia Department of Revenue Commissioner Doug MacGinnitie gives an overview of the new tax system.

“Both of those taxes are going to go away, and every time any car is purchased whether it is new or used, from a friend or from a dealer, you are going to pay a new tax called the title ad valorem tax”, said MacGinnitie. “Once you pay that tax you are done, you won’t get that yearly ad valorem tax, and you will just have to pay a yearly registration.”

The new title and ad valorem tax will be 6.5% of the value of the car, and not how much is paid for the vehicle.

If a vehicle is purchased without the use of the dealer, then the person who purchased the car will pay the title tax when applying for a tag.

Vicki Lambert with the Georgia Department of Motor Vehicle services, says that even the transfer of a vehicle falls under the new title tax

“If it was one that was purchased outside of this new tax, then at the time of the transfer to an immediate family member would have to play the title ad valorem tax at the rate”, she explained. “Once the vehicle is in the title system and it transfers to an immediate family member, then there is a reduced rate to transfer that vehicle.”

The birthday tax will continue to be in place on vehicles purchased before March 1st, 2013, unless you qualify to be able to “opt-in” to the new system.

For more information about the upcoming changes to the tax system, you can visit www.newtitletax.com.