Saturday, February 09, 2013

Oconee County Tax Commissioner Explained New Title Ad Valorem Tax to Civic Center Crowd

Tax Rate Can Increase

More than 50 people showed up at the Civic Center on a Thursday evening to hear Oconee County Tax Commissioner Jennifer Riddle explain the complexity of House Bill 386, which eliminates what is referred to as the “birthday” tax on vehicles.

In its place, the bill passed by the General Assembly last year puts into effect on March 1 a Title Ad Valorem Tax, which everyone who registers a vehicle must pay.

The new Title Ad Valorem Tax also replaces the current sales tax applied to vehicle sales involving dealers.

But the new Title Ad Valorem Tax also applies to the transfer of vehicles between individuals, which currently is not subject to sales tax.

At present, the Title Ad Valorem Tax rate is 6.5 percent, but that rate is scheduled to increase to 6.75 percent in 2014 and 7.0 percent in 2015.

If the tax is not generating enough revenue, the state can adjust the rate up to 9.0 percent, Riddle said.

New Car Purchaser Can Pay Less

Riddle said someone buying a new car this year could pay significantly less than under the current system.

In her calculation, a person who bought a car for $35,000 but traded in a car for $15,000, producing a taxable value of $20,000, would pay $1,300, rather than the current $1,750.

In addition, the purchaser would not pay the annual ad valorem tax each year on her or his birthday. The owner of a car valued at $35,000 currently would pay $350 in ad valorem tax.

Each owner still will be required to pay $20 on the owner’s birthday each year for the tag itself. Special tags cost more.

Currently owned vehicles will remain subject to the annual ad valorem tax and move to the new tax only when they are sold.

Opt-In Option

Those who purchased a vehicle from someone in Georgia from Jan. 1 to Feb. 28 of this year may opt in to the new system, Riddle told the group.

Oconee County Board of Commissioners Chairman Melvin Davis introduced Riddle, who spoke for about 20 minutes. She then took questions from the audience. The full session lasted an hour.

The full video of the session is available on the Oconee County Observations Vimeo Site.

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