Motor vehicles purchased on or after March 1, 2013 and titled in the state of Georgia are now exempt from sales and use tax and annual ad valorem tax, also known as the “birthday tax”. These taxes are replaced by a one-time tax that is imposed on the fair market value of the vehicle called the title ad valorem tax fee (TAVT). The fair market value is the taxable value of the motor vehicle. The way the fair market value is determined depends on whether the motor vehicle is new or used.
A new motor vehicle is any motor vehicle which is not a demo vehicle and has never been sold at retail to the public. For a new motor vehicle, the fair market value is the greater value of the retail selling price or the value listed in the state motor vehicle assessment manual. This number should then be reduced by the vehicles trade-in value and any rebate or cash discounts provided by the selling dealer.
A used motor vehicle is any motor vehicle which has already once been sold at retail to the public. For a used motor vehicle, the fair market value is the value identified in the state motor vehicle assessment manual assembled by the Department of Revenue. The fair market value for a used motor vehicle for purposes of TAVT will generally be the same as the value that was used in the old annual ad valorem tax system.