HOUSE BILL 386
New Ad Valorem Title Tax ("TAVT")
How has the law changed regarding the taxation of motor vehicles?
  • House Bill 386 was passed by the 2012 Georgia General Assembly and provided for a new method of taxation for certain motor vehicles effective March 1, 2013. House Bill 266 was passed by the 2013 session of the Georgia General Assembly and amended numerous aspects of House Bill 386. The title tax law is codified in O.C.G.A. § 48-5C-1.
What happened beginning March 1, 2013?
  • Motor vehicles purchased on or after March 1, 2013 and titled in this state are exempt from sales and use tax and annual ad valorem tax, also known as the "birthday tax". These taxes are 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"). The fair market value is the taxable base of the motor vehicle. The manner in which fair market value is determined depends on whether the motor vehicle is new or used.
How is fair market value determined for a new motor vehicle?
  • A new motor vehicle is any motor vehicle which is not a demonstrator vehicle and has never been the subject of a sale at retail to the general public.
  • For a new motor vehicle, the fair market value is the greater of the retail selling price (or in the case of a lease, the agreed upon value) or the value listed in the state motor vehicle assessment manual. The higher number that is used should then be reduced by the trade-in value, as well as reduced by any rebate or cash discounts provided by the selling dealer at the time of the sale. Retail selling price (or in the case of a lease, the agreed upon value) includes charges for delivery, freight, doc fees, and other such fees and is meant to mirror the taxable base that was formerly used for sales tax.
How is fair market value determined for a used motor vehicle?
  • A used motor vehicle is any motor vehicle which has been the subject of a sale at retail to the general public.
  • For a used motor vehicle, the fair market value is the value identified in the state motor vehicle assessment manual. This value is 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 a used motor vehicle for purposes of TAVT will generally be the same as the value that was used in the old annual ad valorem tax system.
  • A reduction is made for the trade-in when the sale was made by a dealer, but not when the sale was made by a private individual.
What if the used motor vehicle is NOT listed in the motor vehicle assessment manual?
  • If the vehicle is a used vehicle and not listed in state motor vehicle assessment manual, the fair market value will be the higher of (1) the value from the bill of sale or (2) the value listed in a used car market guide designated by the Commissioner of the Department of Revenue.
  • A reduction is made for the trade-in when the sale was made by a dealer, but not when the sale was made by a private individual.
How is TAVT calculated?
  • The TAVT is calculated by multiplying the fair market value by the rate in effect on the date of purchase. For 2013, the rate is 6.5%.
  • A reduction is made for the trade-in when the sale was made by a dealer, but not when the sale was made by a private individual.
How is the trade-in value determined?
  • As defined in O.C.G.A. § 48-5C-1, 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 Commissioner of the Department of Revenue and will be published by August 31.
Where do I apply for my title and pay 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 must accept the application for title and TAVT payment on your behalf and deliver the title application and TAVT payment to the county tag agent in the county where the vehicle will be registered
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 county where the new owner will register the vehicle. The only titles that will be issued from DOR MVD Headquarters are salvage titles, replacement titles, title corrections, and titles for vehicles registered under the International Registration Plan.
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. The appeal takes place at the county level.
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 between January 1, 2012 and March 1, 2013 and titled in this state, the owner is eligible to opt in to the new system and thereby receive an exemption from annual ad valorem tax in the future. If you qualify to opt in, you will get credit for any Georgia sales tax and ad valorem tax previously paid up to the amount of TAVT due. However, if the Georgia 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.
What is the time period when the opt-in can occur?
  • The earliest date that qualified owners will be able to opt in to the new system is March 1, 2013. The last day an opt-in can occur is February 28, 2014.
Can a vehicle be transferred to an immediate family member or inherited by an immediate family member without having to pay TAVT?
  • "Immediate family member" is defined as a spouse, parent, child, sibling, grandparent, or grandchild and includes those who have obtained such status through a legal determination recognized in this state.
  • Whether a motor vehicle transferred or inherited by an immediate family member will be subject to 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 TAVT OR
  • 2. The new owner may elect at the time of transfer to pay TAVT based on the 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 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 on a notarized form [ FORM MV-16 ] affirming that such persons are immediate family members. Anyone who falsely attests shall be subject to a penalty up to $5,000.
I am a new resident of Georgia. How does TAVT affect me?
  • New residents moving into Georgia are required to register and title their motor vehicle in Georgia and must 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 TAVT is not timely remitted to the county tag agent?
  • If the purchase is made at a dealership, the dealer has 30 days from the date of purchase to remit the title application and TAVT payment to the county tag agent of the county where the vehicle will be registered. If remitted later than 30 days from the date of purchase, the dealer will begin to accrue penalties.
  • For non-dealer sales, i.e. a “casual sale”, the buyer must remit the application for title and TAVT payment. If paid later than 30 days from the date of purchase there is a penalty of 10% of the amount of the TAVT owed plus an additional 1% per month for every month late. Please note that motor vehicles purchased on a casual sale must be registered within 7 days from the date of purchase, and that titling of the motor vehicle and payment of the TAVT should generally take place at that time.
I am a Georgia resident but I plan to buy a car in another state. Will I be required to pay TAVT when I title this motor vehicle in Georgia?
  • Yes.
I am a Non-Georgia resident but I plan to buy a car in Georgia and immediately drive it back to my home state and will be titling and registering the motor vehicle in my home state. Will I be required to pay TAVT?
  • No. Form ST-8 should be executed to provide for the “drive out” exemption. You will not pay TAVT or Georgia sales tax but will be subject to the taxing rules of your home state. Please reference Form ST-8 to ensure you qualify for this exemption.
Are leased motor vehicles subject to TAVT?
  • Yes.
What vehicles are not subject to the TAVT?
  • The TAVT applies to any motor vehicle purchased on or after March 1, 2013 for which a Georgia title is issued unless a specific exemption applies. If it is a motor vehicle for which no title is required then the TAVT does not apply. Likewise, if there is a vehicle that has a title but it is not a motor vehicle, then TAVT does not apply. For those vehicles not subject to TAVT, normal sales and use tax rules and annual ad valorem tax may still apply.
  • For example, the following are not subject to TAVT:
  • Pull-behind trailers
  • Pull-behind campers
  • Mopeds
  • Any vehicle for which a Georgia title has not been issued, such as
  • 1. vehicles manufactured prior to 1963 (these vehicles are not eligible to receive a Georgia title)
  • 2. 1963 -1985 model year vehicles that do not have a Georgia title (these vehicles may have a Georgia title but are not required to in all cases)
I have a motor vehicle with a model year between 1963 – 1985 and want to have it titled. Does the TAVT apply?
  • Yes. 1963 – 1985 model year motor vehicles for which a title is obtained are subject to a TAVT of 1% and will receive the associated sales and use tax exemption and the exemption from the annual ad valorem tax.
What other TAVT exemptions are available?
  • Titles being corrected, replaced, or reissued to the same owner
  • Addition or substitution of lienholders on the title so long as the owner of the motor vehicle remains the same
  • Bonded titles pursuant to O.C.G.A. § 40-3-28 issued to registered Georgia dealers
  • Titles issued pursuant to the foreclosure of a mechanics lien under O.C.G.A. § 40-3-54
  • Titles issued to certain persons acquiring abandoned vehicles under Chapter 11 of Title 40
  • Titles issued to an insurance company paying out a claim on a stolen vehicle under O.C.G.A. §40-3-43
  • Titles issued to a registered rebuilder, retail dealer, or manufacturer for the purpose of resale
  • Titles issued pursuant to the foreclosure of a security interest in the name of the security interest holder pursuant to Part 6 of Article 9 of Title 11
  • Motor vehicles on which the TAVT was paid and the owner subsequently moves out of state but later returns and retitles the same motor vehicle in Georgia are not subject to TAVT
  • Vehicles registered in the International Registration Plan are not subject to TAVT
Are motor vehicles acquired by veterans exempt from TAVT?
  • The following veterans may be eligible to receive an exemption from TAVT.
  • Disabled Veteran receiving a grant from U.S. Dept. of Veterans Affairs to purchase and adapt a vehicle for their disability
  • Disabled Veteran who is 100% disabled and entitled to receive service-connected benefits, or who is entitled to a statutory award from the U.S. Dept. of Veterans Affairs for loss of certain faculties
  • Former Prisoner of War or their unremarried surviving spouse
  • Purple Heart Recipient
  • Medal of Honor Recipient
I plan to donate my car to a non-profit organization. Does the non-profit organization have to pay 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.
If I pay TAVT do I still have to register my vehicle every year and pay the tag renewal fee? What other fees still apply?
  • You are still required to annually register your vehicle in your home county and pay the associated $20 standard renewal fee, or the applicable higher renewal fee in the case of specialty tags. The existing $18 title application fee still applies when the vehicle is titled. You must continue to maintain liability insurance as required by Georgia law. If you live in one of the 13 emissions counties, the annual emissions test is still required prior to registration.
For Information On How to Opt-In