The unpopular “birthday tax” car owners pay ended when Governor Nathan Deal signed the tax reform bill HB 386 earlier this year. The bill eliminates the annual ad valorem tax car owners pay and the sales tax manufacturers pay for future purchases.
Individuals who purchase a new or used car after March 1, 2013 will no longer have to pay the annual tax, but pay a one-time sales tax up front beginning at 6.5% in 2013 and increasing to 7% by 2015. The new sales tax will take the place of both the purchase sales tax, and the annual ad valorem tax.
Consumers who purchase a new or used car this year before March 1, 2013, will have the option to pay the one time title tax or continue to pay the yearly ad valorem "birthday" tax.
The new program will be phased in over about 10 years as current car owners will continue to pay the previous ad valorem tax as long as they keep their current vehicle.
The reform plan unanimously passed the state Senate and House, and was signed by Governor Deal during the Governor’s Awards Luncheon for the 2012 Manufacturers of the Year.