The former North Augusta resident had recently moved to Richmond County, bringing with him a 2005 Chrysler minivan that needed a new Georgia license plate and registration.
That’s what took Carter to the south Augusta tag office Friday.
He and a few hundred other residents had come on the first of the month to renew registrations, buy tags and register titles – things that normally take place at the beginning of every month, said Tax Commissioner Steven Kendrick.
“We always have a line on the first of the month,” he said.
Friday was no different, except for one very significant change – Georgia’s new automobile title tax went into effect. Many of those who weren’t aware of the changes, including Carter, were in for a surprise.
“I was expecting between $80 and $100 out of pocket,” said Carter, who assumed he would be paying the yearly ad valorem tax that Georgia car owners have been accustomed to doing every year. “I got hit for $300-something. It left me broke for the weekend.”
Because Carter was transferring his vehicle from South Carolina, he was subject to a one-time title tax of 6.5 percent, based on his car’s fair market value.
He didn’t have a choice. In order to receive a Georgia tag, Carter had to pay the tax on the spot.
“If I had come yesterday, I wouldn’t have to pay it,” he said.
The new law replaces the yearly ad valorem tax, or “birthday tax,” on vehicles with a one-time “title tax” when a vehicle is purchased or transferred to another party. Car purchases will be exempt from most sales tax, too. Residents still will have to pay 1 percent on the first $5,000 of the purchase price for the new transportation sales tax – a maximum of $50.
Kendrick said there are three main categories of car owners who will be affected:
• Residents who bought a car before Jan. 1, 2012, will continue to see yearly ad valorem tax bills due on their birthdays.
• Those who buy cars starting March 1 will be exempt from sales tax on the vehicle and will not pay the birthday tax. They will pay only the one-time title tax.
• Residents who purchased a car between Jan. 1, 2012, and the end of last month can “opt in” to the new title tax, or they can continue to pay the birthday tax each year.
Whether a resident should opt in depends on several factors, including the value of the car, how much tax they have already paid and how long they intend to keep the vehicle. The Georgia Department of Revenue has an online calculator at www.dor.ga.gov that can help residents decide what option is best.
Takiyah Douse, the tax commissioner’s Motor Vehicle Division director, said there were a few people surprised by the tax, but for the most part Friday was business as usual. By 12:30 p.m., the office had served about 450 customers. Of that number, less than 10 percent were affected by the new law, Douse said.
Kendrick, Douse and other tax officials were at the tag office to help explain the new law and ensure things ran smoothly.
Ed Pippin said he was aware of the new law when he came to get a tag for a 2012 Nissan Sentra he had recently purchased. He wasn’t expecting to opt in to the title tax because he thought he would have to pay more.
“I’m not going to because of the up-front cost,” he said.
It was explained to Pippin that he likely would not have to pay anything because he had already paid sales tax this year on
the purchase, which can be credited toward the title tax amount.
By opting in to the title tax, he will pay no more taxes on the Nissan as long as he owns it, just the $20 tag fee each year.
“That sounds OK to me,” he said.