Georgia State Proposal Could Eliminate Car Ad Valorem Tax

Augusta, GA—For Georgia car owners, your birthday is a reminder that you have to dish out money to renew your tag, but a proposal passed by the Georgia House of Representatives may change that.

Steven Kendrick, Augusta Tax Commissioner: “Most times, we pay Ad Valorem taxes on the value of a vehicle, or 40% value of that vehicle.”

Under House Bill 480, what’s known as “Ad Valorem” tax would get the boot, which means no more paying property tax on your car, every year. That tax is used to help support state and local government services. Instead, the Ad Valorem tax would be replaced by a one-time fee of seven percent.

Steven Kendrick: “Now, we get all of that money up front. Those Ad Valorem taxes you would have paid, over the years, we are getting that full 7% up front. That’s being split in half with the state.”

That fee would be applied to the purchase of a new car, beginning in 2010. Georgians who currently have cars will still have to pay for Ad Valorem. However, city leaders like Steven Kendrick have some concerns over the proposed bill.

Steven Kendrick: “Our school board will be a loser in that because school boards are part of the Ad Valorem Tax system. They receive a large portion for Ad Valorem taxes.“

Kendrick also says the new fee may also do away will casual sale of cars.

Steven Kendrick: “If your father sold you a car, you may not pay sales tax on it at all because you were responsible for going to the state and saying, ‘I brought this car, I need to pay these taxes.‘ Now, we know you have to come in.”

The proposal still needs to be approved by the Georgia Senate before the ‘Birthday Tax’ can be axed, for good.