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County expects thousands to appeal value due to new car title tax

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.

Comments

notblind 1 year, 6 months ago

I expect the "low information" crowd to be highly poed when they get caught by this new tax.

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Why_not 1 year, 6 months ago

I see you are using Rush Limbaugh's "low information" quote.

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ConcernedrReader 1 year, 6 months ago

I expect to soon see an increase in out of state tags. The values are a black box in how they are set. I can't wait to see the person walk out of the tag office having paid their last dollar on sales tax and get totaled soon after. Good luck collecting the tax from the insurance company.

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MarkSmith1 1 year, 6 months ago

This tax is bad for everybody. New and used car sales will drop. Leases will be non-existent. Those who suffer will be the public and car dealers. Its not even good for the government because it only helps in the short run. The longer people keep their cars the less the state willl collect on tax. It was a stupid short sighted thing to do.

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Sandykin 1 year, 6 months ago

On the flip side, I can't afford a new car and don't believe I will be in a buying position into the foreseeable future. I will therefore keep paying the birthday tax on my present vehicle, which is already 9 years old, for several more years.

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HonestIngine 1 year, 6 months ago

New car sales will be taking a hit... So, if I get this straight, Person moves to GA from out of state and titles his say 3 vehicles, each valued at 20k, he has a one time tax of 3,900? All paid up front, are you kidding me? Keep your old cars running.. Nathan Deal and all the Republicians running this state are too out of touch with the real world..TOM RICE.. GET THIS tax repealed.. or were you for it?

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HonestIngine 1 year, 6 months ago

Just wrote Gov.Deal's office about this...It's hard to tell the Republicians from the Democrats now a days...

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Mack711 1 year, 6 months ago

First of all they spent 175K just to get someone to appraise the "fair market value" of a vehicle. This before they collect a dime in taxes.When you hire some one they will tell you what you want to hear. Car sales in Georgia between the individual will be a thing of the past. You will not know how much you must pay in taxes to get it tagged. Fair market value is what you actually paid not what the say it is worth, maybe you got a good deal. So now what do you do, you go to a car dealer and all of us know about used car dealers.

Bad law all the way around for the economy. Dumb idea should have left well enough alone. This one will be tied up in court soon for a while. Pity the ones who move to Georgia only to be faced with this tax. They may not come.

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R 1 year, 6 months ago

Well one hopes the government leaves the value table on the internets up so you can determine the tax before walking in as it was in Feb.

If not, we paid 175K for services up front , maybe they will get to generate the replacement software application for values.

"Know before you buy" why I even gave them a "tag line" and didn't get any money...

Gotta work on my coninsulting skills.

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Say_that_again 1 year, 6 months ago

Thank you! Love that word "coninsulting" you coined. I assume the meaning you intended is from Spanish, like con carne is with meat, then con-insulting is with insulting.

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Karl 1 year, 6 months ago

I imagined it was 'con' as in conniving or convict.

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MarkSmith1 1 year, 6 months ago

And those needing a new car, but considering leaving GA, will absolutely not buy a car in GA.

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JamesRivers50 1 year, 6 months ago

Deal is a RINO,and this tax should be done away with like some other states that dont have it

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HonestIngine 1 year, 6 months ago

So much for giving my kids the extra family car. Have to keep it in my name.so they wont have to pay $650 on a 10k car. Does anyone know if someone dies (a spouse for instance) and the surviving spouse needs to put the car in their name, do they have to pay the TAX? And if someone gets a car(like above) I give my car to my child. Do they have to pay the TAX also? Time to call our local GA REP's and the Governor on this one. This TAX STINKS. Got to love our Repocrat(Republician-Democrat) Governor(LOL).

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BuzzG 1 year, 6 months ago

It is getting harder to distinguish between big spending Democrats and thrifty Republicans. They all seem to like cranking up taxes.

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Don_Coyote 1 year, 6 months ago

BTW, the title tax got "fixed" yesterday. Used car dealers will pay 4% while individuals will still pay 6.5%.

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MichelleCouch 1 year, 6 months ago

People will still move to Georgia. Do you really think that the majority of people check out the "title" tax laws before moving to a new state?

SC has a $300 flat rate tax on new auto sales. That's the way to do it.

Perhaps it is a small blessing that I just spent $2500 on my 2004 Envoy, rebuilding the transmission along with replacing a few other of its inside parts. It should go another 10 years now!

I'd rather put that money in the small businesses that worked on my car instead of the government that just keeps kicking my "broke" butt!

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MarkSmith1 1 year, 6 months ago

If a family with 3 vehicles plans to come to GA, they need to plan to put up 1500*3=$4500 in cash to get plates. If they have 4 cars, that is $6000. That certainly will make people think twice before loading up the moving van for GA.

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notblind 1 year, 6 months ago

Next they will be wanting you to pay sales tax on things you buy at yard sales.

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trooper59 1 year, 6 months ago

We had a similar law in St. Louis. It lead to nobody bothering to buy new cars. When I moved down here I was baffled to see so many 1-3 year old vehicles on the road.

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notblind 1 year, 6 months ago

It won't make any difference for any transaction with a dealer, whether new or used. You always pay sales tax in those situations. They are protecting the businesses since they won't be charging the sales tax. It might actually work out good for these transactions as there won't be the yearly birthday tax....................................................... The gooberment is going to make their money on the 60% of sales between individuals. KAPOW ! TAKE THAT CITIZEN !! ...................Actually, I can see it being negotiated in the deal. The seller could knock off all or some portion of the 6.5%.

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R 1 year, 6 months ago

Seller's going to have to, thats why folks need to know before they shop...

As to new sales, The government is just riding on the credit of the new car buyer, since all these fees / taxes / destination charges rollup into the loan...

Even the poor folks at the “buy here pay here” shops are loaning their “credit”, (whatever that may be) to the government.

Like the government Inc. doesn’t borrow enough as it is...

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Don_Coyote 1 year, 6 months ago

Face it. This tax was not thought out last year and the legislators simply worded it like the car dealer lobbies told them to do it. This is why it had to be "fixed" yesterday to address the issues made by rental car companies, leasing agencies and, of course, the "buy here, pay here" used car dealers. This is why I stated on a previous article that they got the legislation they deserved for trying to stick it to those of us who prefer private sales.

Another factor I would love to hear from the county on besides the additional expenses on evaluations would be the ramifications of the loss of the 2% of SPLOST money on all car sales within the county from this point forward.

Also the sponsor of the Senate bill giving the tax break to the "nobody walks" car lots is Sen. Balfour. A quick scan of his 2012 campaign contributors resulted in these four: Committee of Automobile Retail Dealers
America's Car-Mart Georgia Auto Pawn Inc. Georgia Independent Automobile Dealers

Would you guys please remember these things when you go back and automatically vote in these incumbents every two years?

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RedDawn 1 year, 6 months ago

Governor Deal is a political crap weasel. He was a Democrat before he became a Republican. He left Congress due to ethics problems, and the low information voters of Georgia voted him into office.

When will you people figure this out. It's not Republicans against Democrats. It is the political class against "we the people." American politics is a joke, and we are the punch line.

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JohninSuwanee 1 year, 6 months ago

Yeah, this is exactly what we need...another thing to discourage people from going out and buying something. In other words, another thing that damages the economy. Even in this poor economy that we have today, people are still buying cars. Guess what? That will slow down now as well. With the politicians that we have now, there is no way that we will ever climb out of this mess!

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Kodiak13 1 year, 5 months ago

Not only that but whoever they paid to assess the value of these vehicles is ridiculous. I expected to pay around $300 for my car since KBB, NADA, and Edmunds all had it around the same price. I paid over $400 because my vehicle was "assessed" at $6700 vs the $5100-$5300 it was actually worth... (which was where KBB etc had priced it at). I'm sorry but that's a huge difference. Especially as a single working mom going to school, it hurt me to pay the almost $500 bill once all the other taxes and fees applied on top of that ($473 bill... ouch).

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