Title Ad Valorem Tax (“TAVT")

The Title Ad Valorem Tax (“TAVT” or “Title Fee”) was passed by the 2012 Georgia General Assembly with additional amendments made during the 2013 legislative session.  

TAVT is a one-time fee that replaces the sales tax and the annual ad valorem tax (often referred to as the birthday tax) on motor vehicles.  You will now pay this one-time title fee when registering your car.  TAVT is mandatory for motor vehicles purchased on or after March 1, 2013.  (See the information below for motor vehicles purchased before March 1st.)

Cars Purchased On or After March 1, 2013

Vehicles purchased on or after March 1, 2013 and titled in Georgia are exempt from the sales and use tax and the annual ad valorem tax.  Instead, the purchased vehicles are subject to the new, one-time TAVT.   Buyers must pay this Title Fee on all vehicle sales, including private sales, and the Title Fee applies to all vehicles registered in Georgia, regardless of where you purchased the vehicle. 

The Title Fee is paid to the county where the buyer registers the motor vehicle.  It is due within 30 days of the purchase date for the vehicle.  You must submit the Title Fee payment with your application for a certificate of title.  If you purchase your vehicle from a car dealership, the dealership must collect the Title Fee from you and remit it to the county tag agent on your behalf. 

Until December 31, 2013, the TAVT rate is 6.5% multiplied by the “Fair Market Value” of the vehicle.  To calculate the Fair Market Value of a new motor vehicle, identify the retail selling price of the vehicle and the value listed in the Department of Revenue motor vehicle assessment manual, and then use the larger of the two numbers.  For a used vehicle, the Fair Market Value is usually the amount listed in the Department of Revenue motor vehicle assessment manual.   Reduce that number by any rebate or cash discount you received from the seller.  When the vehicle is purchased at a dealership, there is an additional reduction for the value of any trade-in. 

The Department of Revenue has set up an online Title Ad Valorem Tax Calculator that you can use to estimate of the new Title Ad Valorem Tax that will apply to all vehicles purchased in Georgia on or after March 1, 2013.  You will need the purchase date, vehicle value, as well as trade-in amount and rebate, if any.  Visit https://etax.dor.ga.gov/ and select “Online Services” under “Motor Vehicles.”

Don’t forget that vehicles subject to the TAVT are still subject to the $18 title application fee at the time the vehicle is titled. 

Keep in mind also that annual registration requirements still apply.  Check with your local county tag office for details on emissions testing, mandatory insurance, and driver’s license requirements necessary to renew your tag by your expiration date.  You will be required to pay the $20 tag renewal fee annually. 

Moving to Georgia?  If you move into the state after March 1, 2013, you are obligated to pay the Title Fee on any vehicles entering the state when you register your cars in Georgia.  You can pay half the fee up front and pay the balance within a year.

Are sales between family members subject to TAVT?  An immediate family member may or may not have to pay the TAVT when s/he purchases the car from you.  An "immediate family member" is defined as your spouse, parent, child, sibling, grandparent or grandchild.  You and your family member will have to complete an affidavit affirming that you are immediate family members. 

For immediate family members who buy or inherit a vehicle, their obligation to pay the TAVT depends on whether you, as the former owner of the vehicle, have already paid the TAVT. 

  • If you (the former owner) have not paid the TAVT and are paying annual ad valorem tax on the vehicle, your immediate relative has two options:
    • Continue to pay annual ad valorem tax on the vehicle, and therefore, not be subject to the TAVT; or
    • Elect, at the time of the purchase, to pay the TAVT based on the current Fair Market Value of the vehicle at the applicable rate for the current year (i.e. 6.5% of the Fair Market Value for 2013).  
  • If you (the former owner) were eligible to opt-in to the new system and did opt-in, or if you were mandatorily subjected to TAVT when you first acquired the vehicle, then your immediate relative’s TAVT rate will be reduced to 0.50% of the value of the car when s/he purchases it from you and the title is transferred.

What about Disabled Veterans?  Are they subject to TAVT?  Disabled veterans who were exempt from sales tax on vehicle purchases prior to the establishment of the new Title Fee will also be exempt from the New Title Fee.

Cars Purchased Between January 1, 2012 and March 1, 2013

If your motor vehicle’s title was issued on or after January 1, 2012, and before March 1, 2013, you can choose to be exempt from the annual ad valorem tax system and opt-in to the TAVT system.  You must make your selection by March 1, 2014.  You will be required to complete a form at your local county tag office and the Title Fee will be due in full at the time of the election.  The sales tax paid at the time of purchase and any ad valorem tax paid will be credited against the New Title Fee.  If the sales tax and ad valorem tax paid are less than the amount of the New Title Fee, the buyer will owe the difference.   If, on the other hand, the sales tax and ad valorem tax paid equal or exceed the amount of the New Title Fee, no further payments will be due and the difference will not be refunded. 

You may visit the Title Ad Valorem Tax Calculator to compare the current annual ad valorem tax and the new one-time Title Fee.  This comparison can then be used to see an estimate of the opt-in credit you may receive for sales tax and ad valorem taxes paid on a vehicle purchased between January 1, 2012 and February 28, 2013.  To access the calculator, visit https://etax.dor.ga.gov/ and select “Online Services” under “Motor Vehicles.”

Cars Purchased Before January 1, 2012

If you bought a car and titled it in Georgia before January 1, 2012, you are not impacted by TAVT.  You will continue to pay the annually assessed ad valorem tax, or birthday tax.  However, those vehicles that were purchased before 1985 and are not required to have titles will be affected should the owner decide to get a title after March 1, 2013.

 

For more information about the TAVT, visit the Motor Vehicle section of the Georgia Department of Revenue website at http://motor.etax.dor.ga.gov/motor/MVDOnline.aspx.