News 3 Special Report: Welcome to Georgia - WRBL

News 3 Special Report: Welcome to Georgia

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In the market for a new car? Maybe you're new in town. What you don't know can hurt...your wallet.

Mar. 1 was the start of a new era in Georgia car registration, the title ad valorem tax era, doing away with the old 6% sales tax on vehicles.

Now when you register a vehicle in the state you pay 6.5% of what they say your vehicle is worth up front.

Muscogee County tax commissioner Lula Huff says, "It takes us probably three times as long now to process one of these new House bill 386 TAVT registrations than it did before. One, because people were used to the old system, and two, it's taking longer because there are so many unique situations that can come about."

New residents have to pay half of the tax within 30 days of moving to the state. You have 12 months to pay the rest. In the past you would have paid a fairly nominal fee, but now you are looking at at least hundreds of dollars to get Georgia plates.

And when a car is sold from one person to another, the tax has to be paid in full before you can get tags; again, hundreds of dollars.

Huff says, "If you have a used car, this is where the state is really making its money, is on casual sales because it used to be we didn't pay sales tax on casual sales. Georgia was one of the few states that was not charging sales tax on casual sales, and my understanding is that about 60% of the sales in the state of Georgia were casual sales."

If you're thinking about buying a car in the near future, don't wait. Next year the tax will increase to 6.75% and in 2015 it'll be 7%. From there it can go as high as 9%, but that'll be up to lawmakers.

Huff says many people are surprised by the tax when they come into the registration office, but sometimes it's good news. For those who bought new cars in the past year the tax is optional. You can choose to keep paying a birthday tax every year or pay the ad valorem price once and only pay $20 for tags yearly.

New car buyer Darrel Beck says, "I'm not sure how it's all calculated or how it makes the government money or whatever, but I like it."

He bought his new car in October and looked at the difference between the two taxes before he opted into the new system. "I went online and it said, 'how many years do you plan on keeping your car?' I said at least 5, and it was a savings of over $1200. No brainer," he says.

For car dealers the change was hard to get used to.

Kia Autosport manager Ed Braun says his team had to conduct a number of recalculations on their sales in the beginning. "It does get confusing," he says, "I have to admit, but we're selling into it and it seems to be working fine now."

Braun says after they explain the tax, most new car buyers are more than willing to use the new system. He says, "I think that in some ways it's better for the consumer now because they don't have to pay for the tax, the ad valorem tax, out of pocket every year. They can finance it into the purchase of their vehicle, and a large majority of people do finance their vehicle."

If you paid sales tax on a new car last year, already sent in your birthday tax for this year, and wish to opt into the new system, the state will refund the difference of the cost if you overpaid.

If you have more questions about how the new system works, including how much your vehicle is worth, visit

Jessi Mitchell

Jessi joined the WRBL news team in October 2012 after working as a freelance production assistant for MTV Networks in Los Angeles.

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