Tax officials expect confusion with tag changes

Kara Mauldin helps Amy Sorrow renew her car tag.

Vehicle owners who trek to the tag office each year to renew their car tags typically bring a driver’s license and proof of insurance.

After March 1, they’ll also need to bring patience.

Georgia House Bill 386, signed into law last year, includes a provision to eliminate the so-called “birthday tax” charged to vehicle owners when their ad valorem tax is due. But county officials are worried that implementation will create confusion.

“We thought it was just a little bit deceitful for the legislators to say, ‘Oh, we did away with the birthday tax,’ because they essentially have not,” said Columbia County Tax Commissioner Kay Allen.

“If you bought a vehicle prior to Jan. 1, 2012, nothing is different – not one thing is different,” she said. “You still pay the birthday tax every year” for the next 10 years, when all vehicles roll into the program.

Much of the confusion from the reform, which the Georgia Budget and Policy Institute calls “complicated,” will arise from motorists who purchased vehicles between Jan. 1, 2012, and Feb. 28 of this year.

Those who bought from Georgia auto dealers during that period will have already paid sales tax and possibly the ad valorem tax once on the vehicle, and can either opt out and continue paying the “birthday tax,” or possibly pay little or nothing to opt in and thereby end future payments.

However, car purchasers who avoided paying sales tax by buying from a private owner now will be hit with new fees based on the vehicle’s value, Allen said. The change also will apply to those who purchased vehicles from a dealer outside of Georgia. Many of those buyers likely won’t discover the change until they buy a tag.

“There’s going to be a lot of unhappy people who show up to their counter at the tax office who have bought a car from a friend and they say before you can get it registered and titled you’ll owe 6¾ more percent,” said County Commission Chairman Ron Cross. “I don’t think the public has any idea of what’s going to happen in that situation.”

“It’s going to be mass confusion,” Allen said. Her office is trying to head it off by inserting informational flyers into water bills, along with providing updates on the tax office Web site.

Further complicating the process is that the state’s system, into which county workers enter the information, won’t go “live” until March 1 – the day all the changes go into effect.

As a result, Columbia County’s tag office that day will be closed until noon, Allen said, so staff members can learn the new system before receiving customers.

During the county’s initial budget meeting Tuesday morning, Allen warned county officials that because calculating the new tag fees could double the amount of time each renewal takes, she’ll need to hire additional staff.

“When people come in there and you say, ‘Oh, Mr. Kennedy, instead of $38 it’s going to be $238,’ we’ve got some people who can’t afford it,” Allen said. “There are going to be some confrontations.”

TAG CHANGES

• Owners of vehicles purchased before Jan. 1, 2012, will see no changes in the way annual renewals are calculated.

• Owners of vehicles purchased from dealers in Georgia between Jan. 1, 2012, and Feb. 28, 2013, will have the option of paying any additional fees and opting into the new system, or opting out and continuing to pay the “birthday tax.”

• Owners of vehicles purchased from private individuals or from out-of-state dealers between Jan. 1, 2012, and Feb. 28, 2013, must pay an additional fee based on the value of the vehicle when purchasing a tag for the first time.

• Drivers purchasing tags should bring their driver’s licenses, which must have the same address as the vehicle being registered. For new registrations, customers also should bring receipts or bills of sale and proof of insurance.

Source: Columbia County Tax Commissioners Office

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