We are going live with HB 386 beginning March 1st in Georgia tag and title offices. This is a major change for motor vehicle taxation. All motor vehicle sales will be exempt from sales tax, but all (including individual-to-individual) sales will be subject to a new Title Ad Valorem Tax.

The TAVT will function very much like a sales tax. The beginning rate for the remainder of 2013 is 6½%. In 2014 the rate will increase to 6¾%. In 2015 the rate will increase to 7%.

Once this TAVT is paid on a vehicle purchase, that owner will not be subject to the annual ad valorem tax that is paid with their tag renewal. But each time the vehicle goes to a new owner (except for inheritances and immediate family member transfers), it will again be subject to TAVT.

Most Georgia motor vehicle owners will remain subject to ad valorem on their vehicles until they trade or buy a new vehicle. If a vehicle was purchased between January 1, 2012 and December 31, 2012, an owner can take advantage of an opt-in provision. If sales tax was paid at the time of purchase most owners will qualify without additional cost. If no sales tax was paid at the time of purchase the owner may elect to pay the TAVT and then pay no ad valorem going forward at renewal time. HB 80, if passed, will allow our local residents that purchased out of state and paid their sales tax to also take advantage of the opt-in provision and the extend the time to February 28, 2013.

New residents will be greeted with the addition of TAVT to their title and tag fees at initial registration in the state. These folks will have the option of paying 50% at the time of the application for title and the balance within 12 months. The title will not be issued until the balance is paid.

Certain disabled veterans, former POW’s, Purple Heart recipients, and a few others that are currently exempt from ad valorem will continue to be exempt from TAVT. Trucks registered under IRP will not be subject to TAVT.

There are certain provisions regarding leased vehicles and buy-here-pay-here dealers that also remain subject to change under HB 80.

An internal change that will occur is that the Department of Revenue will not collect and distribute the TAVT like the old sales tax. That means each vehicle title application must be submitted to the county where the owner resides. This can be done by electronic means through Georgia Department of Revenue approved vendors, walk-in presentation, or by mail.

Sandra Self is tax commissioner for Catoosa County. She can be reached at sandra.self@catoosa.com.