The new tax system created by the General Assembly in 2012 does away with the ‘birthday tax’ on vehicles purchased after March 1, 2013, and institutes a one-time state and local title ad valorem tax that is paid at the time the owner registers the vehicle.
The new system only applies when the ownership of the vehicle is transferred through a title exchange after March 1, 2013. All other vehicles will continue to be taxed under the current system and owners will pay the annual ad valorem ‘birthday tax’ until they no longer hold title to the vehicle.
In a press release about the new system, ACCG Legislative Director Clint Mueller said the legislation is a major change to the way taxes are paid on motor vehicles.
“People need to fully understand that the cost to title a vehicle is going to be higher than what they may have previously experienced,” he said. “The trade-off is that they will not have to pay sales tax if they have traditionally purchased a vehicle through a dealership and they will not have the annual ad valorem tax to pay every year.”
The title ad valorem tax is collected by the county tax commissioner before a new title is issued and the vehicle is registered. The new tax is calculated at the rate of 6.5 percent of the vehicle’s value, not the sales price.
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