Elimination of birthday tax on vehicles among new Ga. tax reform - WTOC-TV: Savannah, Beaufort, SC, News, Weather & Sports

Elimination of birthday tax on vehicles among new Ga. tax reform


Georgia lawmakers have moved very fast on proposed tax reform, passing it through the state Senate Thursday afternoon. The last stop: Governor Nathan Deal's desk.

If the governor signs off on this, married couples in Georgia who file joint tax returns would get an extra $2,000 for their state tax exemption. Sales tax holidays will also return for school supplies and energy efficient appliances. Plus, if you buy a new or used car, don't worry about paying the ad valorem tax, or birthday tax as some call it.

Most people WTOC spoke to approve of the tax overhaul. Others want to see more tax breaks.

"Yeah. Anything. We are taxed too much. I am a Vietnam vet. I fought for this country and we are taxed too much," Floyd Holly told WTOC.

The Holly family will enjoy the marriage tax exemption, but he may not like this. The bill also calls for more sales tax for internet sales, including cars. It also puts a cap on non-work income seniors can exclude from income taxes at $65,000.

The one change everyone seems to really be focused on, including Chatham County Tax Commissioner Daniel Powers, is the elimination of the Georgia property tax and ad valorem tax on cars.  Getting rid of the birthday tax, due every year on your birthday, is a big hit with car owners who will instead have to pay a one time only title fee to the state, starting in 2013, for newly purchased new and used cars.

"In 2013? My birthday is Tuesday. That will be great but it should have been March 2012," Tonya Holmes told WTOC.

"It's my birthday, yeah, but I have to pay the birthday tax," Rachel Wills said. "It will put a little extra money in people's pockets. A little can go a long way."

"It's a vehicle that gets me around to go to work to make money, to pay my taxes. Why tax me on something I need to pay more taxes," Holly said.

He may have a good point, but for those of us who will be keeping our old cars and trucks, you will still pay your ad valorem until you buy a new, new or used car.

"The vehicles that are in place right now, and you are currently paying an ad valorem tax, you will continue to pay that until a new or used car purchase is made," Powers told WTOC. If the bill is signed into law, anyone who buys a car in 2012 can opt-in for the exemption in March 2013, when the changes take effect.

If you are eligible, car owners will pay a one time title fee to the State of Georgia, which is 6.5 percent in 2013 and 2014 and goes up to 7 percent in 2015.

Chatham County Tax Commissioner Daniel Powers says he's still trying to dissect the 50 page bill and how it will impact Chatham County. He says the elimination of ad valorem, which is collected by the county and shared with the state, would end up costing the county tens of millions of dollars in taxes usually sent straight to the general fund for road repairs. The state has said the bill would share money with local governments so they don't bear the brunt of the tax cuts.

Powers still isn't sure how it will all work out.

"What we are trying to digest out of it is in the future, 2013 and beyond, when you purchase a new or used vehicle through a dealer, the Georgia sales tax and ad valorem will be eliminated. You will pay what is called a Georgia title tax. One time only," Powers said.

Casual car sales, from one owner to another, will also be taxed.

The bill is now in the hands of Governor Deal. Just the marriage income tax exemption alone, according to Georgia Southern University, will save married folks in Georgia more than $360 million from over three years.

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