Do I Have to Pay Georgia Ad Valorem Tax on a Car From Another State?

The Latin phrase" ad valorem" can be commonly defined as "according to value." In the state of Georgia, individuals who own a motor vehicle are required to pay a one-time ad valorem tax commonly referred to as the title ad valorem tax fee, or TAVT. The introduction of the TAVT represented a significant departure from early taxation policies related to automobiles. Beginning in the year 2013, an early method of taxation that incorporated an annual "birthday" tax on automobiles was scrapped in favor of the TAVT.

Regardless of whether you purchased a car new in the state of Georgia or are acquiring a new title for an automobile brought into the state, the TAVT will be used to full effect. Understanding your own tax obligations with respect to the TAVT will help ensure that you have paid all the necessary fees as part of automobile ownership in the state of Georgia.

Exploring The Ad Valorem Tax Georgia Guidelines

Georgia's title ad valorem tax fee was first passed by the Georgia General Assembly in 2012, with the provisions outlined in the legislative proposals coming into full effect in March 2013. According to the guidelines incorporated into the TAVT, vehicles that were purchased in the state of Georgia on or after March 1, 2013, were exempted from sales taxes and "birthday" taxes previously enforced by the state government.

Instead, these newly purchased automobiles are subjected to the TAVT, a one-time tax fee that fluctuates in proportion to the fair market value of the vehicle in question. For clarity, the fair market value of the automobile in question was defined as the taxable base of the car. As part of the fair market value assessment, unique policies were created for new vehicles as well as used automobiles that had been newly purchased.

Assessing Fair Market Value

As per the guidelines established as part of the TAVT, the fair market value of a newly purchased automobile was determined to be the greater of two prices: the current retail selling price and the automobile value listed within the current motor vehicle assessment manual. If a vehicle had already been used, fair market value was assessed by locating the current value listed within the motor vehicle assessment manual for a car of the same year, make and model.

With this information in hand, the TAVT is calculated by multiplying the fair market value of the new or used vehicle by the current TAVT rate. For tax year 2018, Georgia's TAVT rate is 7 prtvrny. As an example, if the fair market value of a used vehicle in Georgia is $14,000, the TAVT that the owner of the automobile is required to pay can be calculated using the following formula:

14,000 (the value of the car) * 0.07 (the decimal-formatted TAVT rate) = $980 (the amount owed by the car owner)

Buying a Car in Georgia From Out of State

If you are located out of state and are buying a car in Georgia, you will still be required to pay the applicable TAVT rate for the vehicle if a Georgia title is issued for the car. Without a Georgia title, the automobile in question does not qualify for TAVT taxation. Far more common than out-of-state individuals buying a car in Georgia are newly arrived individuals registering an out-of-state car for the first time.

According to Georgia state law, new residents of the state are required to register their car with local officials. As part of the registration process, automobile owners will be required to pay 50 percent of their TAVT tax within the first 30 days following their vehicle registration. The additional 50 percent of their TAVT tax must be completely paid off within 12 months of their arrival in the state.

TAVT Tax Rules

As can be seen, the TAVT tax is unavoidable for individuals who are living and working in the state of Georgia. If, for whatever reason, an individual chooses not to pay their one-time TAVT, they will likely be subjected to a variety of penalties and fines by the state government.That being said, specific exemptions are eligible for individuals who may qualify based upon a handful of unique circumstances. A full list of qualifying TAVT exemptions can be found on the state's revenue department website. Military veterans may also have the opportunity to receive an exclusion from TAVT if, among other exemptible scenarios, they are a disabled veteran or have received a Purple Heart during their time of service.

Looking Beyond the TAVT

Following a quick set of calculations on a GA TAVT calculator, some individuals may be somewhat intimidated by the amount of TAVT money they will owe. However, this particular fee will only ever be incurred once. Some fees are restored on an annual basis, however. For example, automobile owners will be required to pay the $20 standard vehicle renewal fee for each year of their residence. Although it should go without saying, automobile owners will still be required to purchase and maintain vehicle liability insurance throughout their active driving years.

By its very design, TAVT is supposed to be a fluctuating tax rate. With that in mind, prospective automobile owners should explore current TAVT rates to determine what they can expect to pay as part of this one-time fee. Under no circumstances should an individual purchase a vehicle and ignore their TAVT obligations.

Understanding Late Payment Penalties

Penalties for late payments can be quite significant. For example, if an individual pays their TAVT more than 30 days late, they will be required to pay an additional 10 percent of their current TAVT fees as well as an additional 1 percent of the TAVT for each month the payment is late. As can be imagined, this sum of money can grow quite large rather quickly. With that in mind, it is in the best interest of the automobile owner to pay their TAVT as soon as they are able to do so.

For those seeking more information about Georgia's ad valorem tax rules, the Georgia Department of Revenue maintains a large resource database that can answer any questions about this particular fee. Although the TAVT is relatively straightforward, taking the time to resolve any issues or concerns can help ensure that you don't run afoul of state tax laws.