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Annual 'Birthday Tax' Being Replaced by Title Tax

House Bill 386 removes the sales tax and the annual ad valorem tax on newly purchased vehicles that used to become due on your birthday every year. The new law becomes effective March 1, 2013.

The so-called “Birthday Tax” is going away later this year.

Effective March 1, 2013, House Bill 386 removes the sales tax and the annual ad valorem tax on newly purchased vehicles that used to become due on your birthday every year. It replaces these taxes with a new 6.5 percent title tax.

Here's what you need to know, according to the Gwinnet County Tax Commissioner’s Office:

If you purchase a vehicle on or after March 1, 2013, you will pay the new title tax to the tag agent in the county in which you register the vehicle. You pay when you apply for the title and register the vehicle.

The new title tax is not due every year but is due each time the vehicle is sold and titled. It applies to dealer sales as well as sales between individuals.

The new title tax is based on a percentage (6.5 percent in 2013) of the fair market value of the vehicle, not the sales price, as determined by the Georgia Department of Revenue.

You will continue to pay the annual ad valorem tax on vehicle(s) that you currently own.

If you purchase a vehicle in Georgia between Jan. 1, 2012, and March 1, 2013, (when the new program begins) you have the option of paying the new title tax instead of the current annual ad valorem tax. You have from March 1, 2013, until Dec. 31, 2013, to opt into the new program. Note: Vehicles purchased out-of-state are not eligible to opt in.

All other existing annual vehicle registration requirements, including annual tag renewal fees, decals, and emission tests (if applicable), remain in effect for all vehicle owners.

For more information and a title tax calculator, visit www.GwinnettTaxCommissioner.com.

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