New car tag tax is coming - WALB.com, Albany News, Weather, Sports

New car tag tax is coming

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ALBANY, GA (WALB) -

What many of you call the dreaded "birthday tax" for your car tags is going away. The state is replacing the annual ad valorem tax on your car with a one-time payment.

It sounds better, but if you buy a vehicle from an individual, you may get quite a shock on your next trip to the tag office. Before you buy a vehicle from your neighbor or friend, beware.

What may seem like a great deal at the time could cost you a lot more than you were expecting when you go to register your vehicle. If you don't buy from a dealership, be prepared to pay more than just the $18 application fee and tag fee. If you don't plan to trade in your car, or buy a new vehicle nothing will change. You still pay the annual "Birthday Tax."

But Starting March first, the tax will go away for newly purchased vehicles. That annual tax will be replaced with a onetime title tax.

"It's a onetime thing. This year they pay that six and a half percent and next year they will only buy the plate and the year after that. So their birthday tax goes away," said Denver Hooten, Dougherty County Tax Director.

Good news for some, but others may be caught off guard. "In the past, you only paid what that individual wanted for that vehicle, but now you have to walk up to the counter but now you have to walk up to the counter and give us six and a half percent of the value of that vehicle," said Hooten.

Car shoppers who buy from dealerships probably won't notice the difference at first. Since they no longer have to pay sales tax, the sales tax savings will be about the same as the cost of the new title ad valorem tax.

"You will pay that one lump sum and then you won't have ad valorem anymore. It's a way for the State to collect more money and cut back on private sales between individuals."

The 6% is based upon the value of the vehicle, so it's going to be a real shock because some folks are going to have to pay more out of pocket especially owner to owner instead of dealership to individual.

If you purchased a vehicle in Georgia between January first of 2012 to March first of this year, you have the option to opt in and pay this one-time fee.

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