No More “Birthday Tax,” Georgians Prepare for New Title Tax

PERRY, Georgia (41NBC/WMGT) – Your birthday is a special day where you celebrate with friends, family, cake, and the dreaded “birthday tax.” That’s the fee you pay to renew your auto tags every year. A new state law is getting rid of that tax and for some car owners that means you ‘ll never have to pay it again.

“It’s dramatic. It’s $199 so I’m dreading paying it,” car owner Vivian Blackshear said.

Blackshear bought a 2011 Nissan Versa in May 2012 for $20,000. This year is the first time she’ll have to pay a “birthday tax.”

“It’s your birthday and you really don’t want to spend you money on a tag, you want to spend your money on yourself,” she said.

But that dreadful tax will soon be a thing of the past. A new state law, House Bill 386, kicks off March 1st and it will get rid of the annual tax car owners pay to renew their tags.

“The biggest change basically if you buy a vehicle starting March 1st there won’t be any sales tax on that vehicle, but when you come to visit me to get the title put in your name, you’ll pay a title ad valorem fee based on the value of that vehicle,” Houston County Tax Commissioner Mark Kushinka said.

For example, say you buy a car for $20,000 after March 1st. Under this new law, that means you will pay a one-time title fee for $1,200.

“After that’s been processed, every year after that it’s just $20 [to renew the tag] for that vehicle then on,” Kushinka said.

There is an opportunity for car owners who recently bought a vehicle to participate in this new law. If you bought a car from January 1, 2012 through February 28, 2013 then you can opt-in on this new title tax. But Kushinka urges everyone to add up the numbers before making a decision.

“Every vehicle is different. If you have an older vehicle, the value is very low, you really need to see if its worth your while,” he said.

It could be cheaper to continue paying a “birthday tax” rather than opting to pay the one-time title fee.

“If you bought a vehicle [during the opt-in period] and you paid sales tax on that vehicle, my advice, opt in because you don’t have to pay that title fee because you’re going to get consideration for that sales tax you already paid on that vehicle,” Kushinka said.

If you currently have a car and don’t qualify for the opt-in program, you will still have to pay a “birthday tax” until you get rid of that vehicle.

For those who qualify and are considering making the switch to the one-time fee, the Georgia Department of Revenue offers a title ad valorem tax calculator to help you figure out which option is best for you. Click here to calculate how much it would cost you and to find out if the switch is worth it.