Georgia residents who buy or lease a motor vehicle will soon be paying more than the reduced Title Ad Valorem Tax (TAVT) rate that’s been in effect the last three years.
The reduced TAVT rate of 6.6 percent of a vehicle’s fair market value was provided by the General Assembly starting Jan. 1, 2020. It will expire June 30. Beginning July 1, the TAVT rate will return to 7 percent of the fair market value. The new rate will only apply to motor vehicles purchased, leased or titled in Georgia on or after July 1.
Motor vehicles titled in Georgia have been subject to the tax since March 1, 2013. Vehicles subject to TAVT are not subject to sales and use tax and are also not subject to annual ad valorem “birthday” taxes, as long as the vehicle remains with the same owner.
“It happens any time you’re doing any kind of title transfer,” said Gilmer County Tax Commissioner Becky Marshall. “They used to have sales tax when you purchased a vehicle, but they don’t have that anymore. Now it’s all TAVT. If you’re doing financing, they put it in your financing like they did when you were paying sales tax.”
Georgia Code provides for a special reduced TAVT rate for directly financed dealer sales by a direct finance dealer, commonly referred to as a “buy-here, pay-here dealer.” The special reduced rate is 2.5 percentage points less than the standard rate. Starting July 1, the special reduced rate for directly financed dealer sales will be 4.5 percent.
Other TAVT rates and exemptions can apply in certain situations. These specific, reduced TAVT rates have not changed.
For example, a 3-percent TAVT rate is provided for new Georgia residents who bring with them a motor vehicle already registered in another state, commonly referred to as the “New to Georgia” rate.
The statute also provides a reduced TAVT rate of one-half percent for certain transfers of motor vehicles between immediate family members and a 1-percent rate for certain transfers of motor vehicles following a divorce. These statutory rates have also not changed.
Marshall said a TAVT rate calculator is available online through a state Department of Revenue website (eservices.drives.ga.gov) that can help to estimate TAVT amounts.