One of the most confusing tax increases the Georgia General Assembly has foisted on the public is the TAVT, the Title Ad Valorem Tax. The annual birthday tax that rolls around for our vehicles is no more, replaced by the 2012 law that gathers all that tax money up front at a rate that started at 6.5 percent and could end up as high as 9 percent. For lawmakers who have pledged not to raise taxes, this was a case of wink-wink, nod-nod.
What’s more upsetting to taxpayers is the state hook that now extends to private sellers. Old Joe down the street selling that clunker must now calculate the tax due on the sale -- oh sorry, it’s not the seller who has to jump through the TAVT hoops, it’s the buyer. And the buyer has a short time window to figure the TAVT out. If they take more than 30 days, there’s a 10 percent penalty. But there’s a catch that makes the 30 days deceiving.
Casual sales have to be registered within seven days, and as the Department of Revenue’s website suggests, “Please note that motor vehicles purchased on a casual sale must be registered within seven days from the date of purchase, and that titling of the motor vehicle and payment of the TAVT should generally take place at that time.”
Figuring the TAVT is a daunting task. The 2014 Assessment Manual is 958 pages. Buyers need to find the make, model, year and vehicle ID number for more accuracy. They can also depend on the dealer or the Department of Revenue to divine how much the tax might be. If you’re bringing a car in from out of state, the confusion continues. New residents must pay 50 percent of the TAVT within 30 days and the other 50 percent within 12 months. This may catch some new residents unaware. It’s an additional cost that could hit them for thousands of dollars -- up front.
Even with the TAVT, vehicle owners aren’t totally off the annual hook. They still have to register and pay the $20 standard renewal fee or more in the case of specialty tags. However, owners are starting to realize it’s the state’s general fund that reaps the majority of the funds, not the causes they support by purchasing vanity tags.
There are ongoing attempts to adjust the TAVT by legislators. Some counties are net losers and others are winners. The tax money, instead of staying in the county of purchase, goes to the state and then a percentage (45 percent this year) to the home counties of the buyers. For now, the state is reaping a huge windfall.
So the next time our lawmakers wrap themselves in the anti-tax blanket, ask if they voted for the TAVT. That will indicate where they really stand on taxes.