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Tax exemption puts happy back into happy birthday
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During the 2012 Legislative Session, the Georgia General Assembly adopted HB 386, a comprehensive tax package aimed at creating a friendlier tax structure for Georgia families and businesses.

One of the most discussed portions of House Bill 386 will eliminate the "birthday tax" Georgians pay on vehicles each year.

When a Georgia citizen titles a car in Georgia after Mar. 1, 2013, they will pay a one-time title fee instead of sales taxes and the annual ad valorem tax due each birthday.

The title fee rate will be 6.5 to 7 percent, which is less than or equal to the sales tax in most counties. This title fee will be phased in over a period of 3 years; starting in 2013 at 6.5 percent and gradually increasing to 7 percent by 2015.

Individuals who pay the title fee are then relieved of paying ad valorem taxes (birthday tax) forever.

Georgians will see the immediate benefits of this package when they purchase a new vehicle. With the removal of the annual birthday tax, individuals will pay a lesser fee upon the purchase of the vehicle than the current sales tax charged in most counties and will save the amount of ad valorem taxes that would normally be paid under current law for the entire period of time the vehicle is owned. This is great news for car owners and is a welcome tax break for Georgia taxpayers.

Under this new tax code, car owners will still be required to satisfy annual car registration and tag payments; however, the expensive task of paying the birthday tax will soon become something of the past for newly purchased personal vehicles. The bill also includes a minimal fee for transfers between immediate family members and eliminates the local tax on the ownership of personal property.

Although the annual birthday tax was unpopular among Georgia taxpayers, it served its purpose of generating a positive stream of revenue for local governments.

In order to protect Georgia municipalities from losing revenue during the first four years of these tax code implementations, local governments will receive a combination of property tax from vehicles that have not yet been phased out of the property tax system and title fee revenue.

The state of Georgia will also receive a title fee to split evenly pro rata among the counties in order to keep them whole in terms of revenue.

The implementation of this tax code will mark a significant shift in how the state of Georgia allows local governments to collect revenue.

Instead of taxing the ownership of automobiles, revenue will now be generated from the purchase or consumption of these vehicles within the stream of commerce.

Although the Senate has adjourned until next January, our work as elected officials will not stop. Throughout the rest of the year, I will continue to research issues of importance and listen to the issues that matter most to you - the constituents of the 51st Senate District.

Sen. Steve Gooch represents the 51st Senate District, which includes Dawson, Fannin, Gilmer, Lumpkin, Pickens and Union counties and portions of Forsyth and White counties. He may be reached at (404) 656-9221 or via e-mail at