Q: With the advent of the new title tax in place of the sales tax and ad valorem, I have two questions:
- How will the value of the vehicle be set for casual sales between private parties?
- When you lease a car, you do not own it. If you lease for two or three years, will you be required to pay for the entire title tax, even though you have the car for only a predetermined period?
—Alan Berman, Marietta
A: Georgia's new title tax, which was passed in March, bases the tax on sales between private parties on the "fair market value" of a vehicle. Under Georgia code 48-5-442, the taxable value of a motor vehicle is determined by "the average of the current fair market value and the current wholesale value of a motor vehicle, for a vehicle listed in the current motor vehicle ad valorem assessment manual utilized by the state revenue commissioner." There also is a provision that deducts any trade-in amount when determining fair market value. For leases, the title tax will be paid by the company leasing the vehicle, and that company likely will build that cost into "the cost of the lease," Clint Mueller, the legislative director for the Association County Commissioners of Georgia, told Q&A on the News. He said the person leasing the car would pay the tax for the period of the lease.
Andy Johnston wrote this column; Chris Joyner contributed. Do you have a question about the news? We’ll try to get the answer. Call 404-222-2002 or email q&a@ajc.com (include name, phone and city).
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