Sen. Jack Murphy (R-Cumming) recently released a statement on the coming changes to the way motor vehicles are taxed as legislators continue to review HB 386, the "comprehensive" tax reform bill they passed this year.

Sen. Murphy writes,

"This portion has probably been misrepresented more than any other part of the bill.

Currently when you buy a vehicle, you pay sales tax on the price of the vehicle at the time of purchase (6-8 percent depending on the county the vehicle is titled in) as well as an ad valorem tax (determined by your County Tax Commissioner) each year on your birthday when you renew your license or car tag. Under the provisions in HB 386, you will no longer pay sales tax or ad valorem tax on the newly purchased vehicle. Instead, you will pay a one-time title fee that in most cases is less than what you would have paid in sales tax alone. Here are the details:

If you purchase a new or used vehicle, Prior to January 1, 2012:
• You will continue to pay the ad valorem tax each year on your birthday.

Between January 1, 2012 and February 28, 2013:
• You can opt into the program until March 1, 2013 if the combined sales tax and ad valorem tax paid on the vehicle before March 1, 2013 is found to be equal to or greater than what the 6.5% title fee would be. If the combined sales tax and ad valorem tax paid on the vehicle before March 1, 2013 is found to be less than what the 6.5% title fee would be, you may pay the difference between the two amounts and opt into the program as well.
• The Georgia Department of Revenue is in the process of drafting regulations governing the exact process; however, election for the opt-in can be made at the time of purchase, or it can be made post-purchase with the owner going to the local tag office to make the necessary payments to elect the opt-in so that his/her new vehicle will no longer be subject to the "birthday tax." Once again, only new and used vehicle purchases made between January 1, 2012 and February 28, 2013, are eligible for this option.

After March 1, 2013:
• The annual ad valorem, also known as "birthday tax," and sales tax on the vehicle at the time of purchase will be eliminated with new and used vehicle purchases beginning March 1, 2013.
• To replace this, you will be charged a one-time title fee of 6.5% beginning March 1, 2013. The fee will go up to 6.75% on January 1, 2014 and then top out at 7% on January 1, 2015.

If you engage in a casual sale of a vehicle after March 1, 2013:
• You will be required to pay the same title fee for casual sales unless the vehicle is sold to an immediate family member (spouse, parent, child, sibling, grandparent, or grandchild).
• If sold or given away to an immediate family member, there is no title fee. However, for transfers between family members there is a minimal title transfer fee of ¼ of 1% of the value of the vehicle that will be collected by both the state and the local county.

On another note, I recently had the honor of receiving the highest ranking given for the Georgia Chamber of Commerce Honor Roll. The Chamber’s Honor Roll serves as recognition for those who were most supportive of the business community during the 2012 Legislative Session. My colleagues and I worked tirelessly to implement common sense laws that are significantly contributing to Georgia’s recovery. I’m pleased to report that state revenues continue to increase while our unemployment rate decreases; two clear indicators that the economy continues to improve. Throughout my time as an elected official, I have valued the relationships that I have built at the Chamber. They truly seek to better this state through the creation of better business policy for the companies and employees that call Georgia home. I’m proud to have been named to such a prestigious list and look forward to continuing to build on the existing relationships we have in place to better the 27th district for generations to come.  

Furthermore, I have been named to the Senate Economic Development subcommittee to study the horse racing industry. I look forward to working with Chairman Ronnie Chance and subcommittee Chairman Jeff Mullis as we evaluate the potential impact horse racing would have on our economy. I will continue to keep you updated with any developments as we move through this important process."

Sen. Murphy, who serves as Chairman of the Banking and Financial Institutions Committee, announced last month that he is seeking a fourth term in the race for State Senate District 27 in Forsyth County.

Editor's Note: Cumming Patch is not affiliated with nor endorses any political party or candidate running for public office.