Georgia Taxes on Leases – HB340 TAVT Bill Passed

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Georgia Taxes on Leases �C HB340 TAVT Bill Passed  阅读原文»

 

A few years ago Georgia changedhow vehicles were taxed for both purchase and lease. Instead of paying a county sales tax and annual ad velorum based on vehicle value, a one-time TitleAd VelorumTax (TAVT)was assessed. The TAVT was calculated on the sale price of the new vehicle or the “book” value of the used vehicle regardless of purchase or lease. It is currently 7%, having increased slightly over the last few years.

Recently the state legislature worked on a bill to restructure this system. There were several other components to the bill during negotiations and many of those were removed. Used car dealers were hoping to remove the book value portion of the taxation. There were also provisions related to state vs. county distribution of the taxes collected. The only portion of the bill that passed the house and senate relates totaxation on leases.

Upon signature by the Governor, effective July 1, 2017, TAVT on leased vehicles will be calculated based on the total of lease payments, rather than the full value of the vehicle.

As someone who leases a car every three years, this is great news to me! As someone who helps other people lease cars every day, this is even better news! This shouldlower futurelease payments for the average buyer by a noticeable amount.

Currently if you buy or lease a $50,000 car you will be assessed $3500 in TAVT. If youdivide that into a 36 month lease and add interest it is over $100/month in taxes. The new rules wouldmean that a $700/month base lease payment would be assessed $49/month is taxes.

There is some confusion about the effective date for the new taxation. I have heard both July 1, 2017 and January1, 2018. I will look for clarification on that in thecoming weeks.

Here is a link to the full text of the bill.

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