How Much Are Taxes on a Car in Georgia?
Understand Georgia's car tax system. Learn how vehicle taxes are calculated, paid, and what to expect when buying or registering a car in GA.
Georgia utilizes a one-time Title Ad Valorem Tax (TAVT) for vehicle taxation. This tax applies to most vehicle transactions, including purchases, transfers of ownership, and when new residents register vehicles in the state for the first time. TAVT replaces traditional sales tax and annual property taxes on vehicles.
Understanding Georgia’s Vehicle Tax System
The Title Ad Valorem Tax (TAVT) became effective on March 1, 2013. This one-time tax replaced both the sales tax on vehicle purchases and the annual ad valorem tax, commonly known as the “birthday tax.” TAVT is collected when a vehicle is titled in Georgia, applying to all title ownership changes and to vehicles brought into the state by new residents. The purpose of TAVT is to streamline vehicle taxation, ensuring a single payment covers the tax obligation for the duration of ownership. Once TAVT is paid, the vehicle is exempt from future annual ad valorem taxes and sales tax, simplifying yearly vehicle ownership costs. TAVT is separate from annual registration fees, which are required to keep a vehicle’s registration current and cover license plates and decals.
Calculating Your Vehicle’s Title Ad Valorem Tax (TAVT)
Calculating TAVT involves determining the vehicle’s fair market value and applying the current tax rate. As of July 1, 2023, the TAVT rate is 7.0% of the fair market value, capped by law at 9.0%. The tax base for new and used vehicle purchases is generally the retail selling price, reduced by any trade-in value or rebates.
For a new motor vehicle, the fair market value is the greater of the retail selling price or the value listed in the state motor vehicle assessment manual. Any trade-in value from a dealer sale, as well as rebates or cash discounts, will reduce this taxable amount. For example, if a new vehicle is purchased for $30,000 with a $5,000 trade-in, TAVT is calculated on $25,000.
For used motor vehicles, the fair market value is typically the value identified in the state motor vehicle assessment manual, calculated by averaging current wholesale and retail values. If a used vehicle is not listed, a designated used car market guide, such as the NADA guide, will be used. A reduction for a trade-in is applied if the sale is made by a licensed dealer. However, if purchased from a private individual, no reduction is made for a trade-in.
The calculation for TAVT is generally (Fair Market Value – Trade-in Value) x TAVT Rate = TAVT Liability. The fair market value often includes charges such as delivery, freight, and documentation fees. The Georgia Department of Revenue provides an online TAVT calculator to assist in estimating tax liability.
TAVT Payment and Vehicle Registration Process
TAVT payment and vehicle registration typically occur simultaneously. TAVT is paid at the County Tag Office in the county where the buyer resides at the time of the initial title application. If a vehicle is purchased from a Georgia dealership, the dealer collects the TAVT and submits the payment and title application to the County Tag Office.
For individuals purchasing from a private seller or moving to Georgia, they are responsible for initiating the titling and registration process. New residents have 30 calendar days from establishing residency to register their vehicles. Georgia residents purchasing from a private seller must register within 7 business days from the purchase date. If a dealership does not handle submission for new vehicle purchases, individuals have 30 days from the purchase date to apply for registration. Penalties and fines can be assessed for failing to register a vehicle within these specified timelines.
To complete TAVT payment and vehicle registration, several documents are generally required at the County Tag Office:
A valid Georgia driver’s license or identification card.
Proof of vehicle ownership, such as the original title or manufacturer’s certificate of origin.
Proof of Georgia liability insurance, electronically submitted by the insurance company to the state’s database.
A passing Georgia emissions inspection, if necessary for certain vehicle models.
Once all documentation is submitted and fees are paid, including the TAVT, the license plate and registration are typically issued on the same day for in-person transactions.
Specific Scenarios and Exemptions
Specific scenarios and exemptions can modify standard TAVT rules. New residents moving to Georgia with out-of-state titled vehicles pay a reduced TAVT rate of 3% of the fair market value.
Vehicles transferred between immediate family members may also qualify for a reduced TAVT rate. If the vehicle has a Georgia title and TAVT was previously paid, the family member pays 0.5% of the fair market value. An Affidavit to Certify Immediate Family Relationship (Form MV-16) is required to claim this reduced rate. If the vehicle was under the annual ad valorem tax system, the family member can continue paying annual ad valorem tax or pay the full TAVT amount to enter the TAVT system.
For inherited vehicles, if the vehicle was already in the TAVT system, the inheritor pays a reduced TAVT rate of 0.5% of the fair market value. This requires an Affidavit of Inheritance (Form T-20) and a certified copy of the deceased’s death certificate. If the inherited vehicle was under the annual ad valorem tax system, the inheritor may choose to continue with annual payments or opt into the TAVT system by paying the full tax.
Certain military veterans, including those with 100% service-connected disability, former Prisoners of War, Purple Heart recipients, and Medal of Honor recipients, may be exempt from TAVT. Non-titled vehicles and trailers remain subject to the annual ad valorem tax rather than TAVT.