Annual 'Birthday Tax' on Vehicles Being Replaced by Title Tax
House Bill 386 goes into effect March 1, but vehicles owned prior to Jan. 1, 2012, will remain in the old system.
The “Birthday Tax” is going away this year, but not for everyone.
Effective March 1, 2013, House Bill 386 removes the sales tax and the annual ad valorem tax on newly purchased vehicles due on your birthday every year. It replaces these taxes with a new 6.5 percent title tax.
Here's what you need to know:
- If you purchase a vehicle on or after March 1, 2013, you will pay the new title tax to the tag agent in the county in which you register the vehicle. You pay when you apply for the title and register the vehicle.
- The new title tax is not due every year but is due each time the vehicle is sold and titled. It applies to dealer sales, as well as sales between individuals.
- The new title tax is based on a percentage — 6.5 percent in 2013 — of the fair market value of the vehicle, not the sales price, as determined by the Georgia Department of Revenue.
- You will continue to pay the annual ad valorem tax on vehicles that you currently own.
- You have from March 1 through Dec. 31, 2013, to opt in to the new program, but vehicles purchased out-of-state are not eligible.
- All other existing annual vehicle registration requirements, including annual tag renewal fees, decals and emission tests, remain in effect for all vehicle owners.