Georgia Auto Sales Tax: The Title Ad Valorem Tax (TAVT)
Understand Georgia's Title Ad Valorem Tax (TAVT), a one-time fee based on vehicle value that replaces sales tax when you register and title your car.
Georgia streamlines its approach to vehicle taxation through a one-time fee known as the Title Ad Valorem Tax (TAVT). This system replaces the conventional sales tax and annual property taxes on motor vehicles for most transactions. Instead of paying a tax at the point of sale and then an annual tax, a Georgia resident pays a single tax when they title the vehicle. This tax applies whenever ownership is transferred or when a new resident brings a vehicle into the state for the first time. The TAVT system applies to vehicles purchased on or after March 1, 2013.
Calculating the Title Ad Valorem Tax
The foundation of the Title Ad Valorem Tax is a statewide rate applied to the vehicle’s taxable value. The TAVT rate is 7.0% of the vehicle’s value, which is not necessarily the purchase price. The law requires the tax to be calculated on the greater of two figures: the vehicle’s fair market value, as determined by the Georgia Department of Revenue’s valuation database, or the declared purchase price.
A factor that can lower the TAVT amount is the value of a trade-in vehicle. When you trade in a vehicle to a dealer as part of a new purchase, its value is subtracted from the new vehicle’s taxable value before the 7.0% rate is applied. This reduction is only applicable on dealer transactions where the trade-in is part of the same purchasing event.
For example, consider a vehicle with a fair market value of $30,000. With no trade-in, the TAVT would be $2,100 (7.0% of $30,000). If the buyer trades in a vehicle valued at $10,000, the taxable amount is reduced to $20,000, making the tax due $1,400.
TAVT for Different Purchase Scenarios
Purchasing from a Georgia Dealer
When buying a vehicle from a licensed Georgia dealership, the process of handling the TAVT is managed for you. The dealer calculates the tax based on the vehicle’s value and any applicable trade-in credits. This TAVT amount is collected from the buyer at the time of purchase, and the dealership is responsible for remitting the tax and submitting the title application paperwork to the state.
Private Party Purchases
In a private sale between individuals, the responsibility for the TAVT shifts to the buyer. After purchasing the vehicle, the buyer has seven business days to apply for the title and pay the tax. This is done by taking the bill of sale and the vehicle’s title to their local County Tag Office. The office will calculate the final TAVT amount owed, which must be paid before the title can be transferred into the new owner’s name.
New Residents Moving to Georgia
Individuals establishing residency in Georgia must register their vehicles within 30 calendar days. New residents are subject to a reduced TAVT rate of 3% of the vehicle’s fair market value. This tax must be paid to the County Tag Office to receive a Georgia title and license plate. Before registering, a new resident must first obtain a Georgia driver’s license, as failing to register within the 30-day window can result in penalties.
Exemptions from TAVT
Certain situations allow for a vehicle to be titled without paying the full TAVT rate. One instance involves title transfers between immediate family members, including spouses, parents, children, siblings, grandparents, or grandchildren. For these transfers, a reduced rate of 0.5% of the vehicle’s fair market value applies, provided the previous owner had already paid the full TAVT. This requires submitting Form MV-16 Affidavit to Certify Immediate Family Relationship to qualify.
Inherited vehicles are also subject to a reduced TAVT rate. An heir can pay a tax of 0.5% of the fair market value by submitting a T-20 Affidavit of Inheritance. Additionally, exemptions are available for certain disabled American veterans who are 100% service-connected, former prisoners of war, and recipients of the Purple Heart or Medal of Honor. These exemptions require official military documentation to be granted.
Required Documentation and Payment Submission
The primary document for this process is Form MV-1 Title/Tag Application, which can be downloaded from the Georgia Department of Revenue’s website. To complete the application and title transfer, you will need to present several other items at your local County Tag Office. These include:
- The original vehicle title properly signed over by the previous owner
- A completed Bill of Sale that shows the purchase price
- Proof of Georgia residency, such as a recent utility bill or bank statement
- Valid proof of Georgia motor vehicle liability insurance
With the completed MV-1 form and all supporting paperwork, you must visit your local County Tag Office. Most tag offices accept various payment methods for the TAVT, including checks and credit cards. Once the payment is processed, you will receive a temporary operating permit, and the official Georgia title will be mailed to you or your lienholder.