LAWRENCEVILLE -- Just days after a new car title tax began, county officials made moves to accommodate the thousands of appeals expected to come from taxpayers.
Taking place of the annual ad valorem tax and sales taxes on vehicles, the new title tax imposes a one-time 6.5 percent title tax upon the purchase of a new car after March 1.
While the state has always assessed the value of cars, the annual rate was so low that it rarely resulted in an appeal, with about 100 to 125 filed each year in Gwinnett.
But Chief Appraiser Steve Pruitt expects that to change with the hundreds or even thousands that could charged with the title tax.
On Tuesday, commissioners approved a $175,000 contract with LMC Inc. to have the firm help with re-valuations, since the state's value is taken with an average number of miles and condition of a vehicle. The company will make a second valuation taking those factors in mind, and if the taxpayer continues to appeal that, the determination will go before the county Board of Equalizations.
"I just didn't have the staff to meet with the taxpayers," and make the determinations, Pruitt said. "We're going to make it an easy process for the taxpayers."
Because the tax can be rolled into a loan if a person buys at a car dealership, Pruitt expects most of the appeals to come from casual sales -- those made from neighbor to neighbor -- where people didn't have to deal with sales taxes before.
Plus, if a car is sold in poor condition for a cheaper amount, the state's initial valuation would not take that into account.
The appeals might come from people moving into the state, as well, as they would have to pay the 6.5 percent tax based on the value of the car to transfer their title to Georgia, he said. For a $10,000, the transfer could cost $650. For a $40,000 car, it would be $2,600.
"It's the person-to-person sales where the dealer is not involved, where this is not a loan situation, that is going to catch a few people by surprise," Pruitt said.
With 207,000 changes in title in Gwinnett between June 2011 and July 2012, about 60 percent being from casual sales, Pruitt said even a 3 to 5 percent appeal rate would bring 3,500 to 5,000 appeals a year.
Also on Tuesday, commissioners agreed to a plan to distribute the proceeds from the title tax to its 16 cities, as well as the county school board and Buford city school board.
When the new law was passed last year, legislators promised the money would continue to filter to those entities, which had previously collected ad valorem as well as a 1 percent county special sales tax and a 1 percent schools special sales tax.
The distribution is based on population, officials said.