State lawmakers have approved some repair work on Georgia's new car tax system. Because of an oversight, car leases wound up with a double tax in the new car tag law.
Top state lawmakers said a just-approved revision to the law fixes the problem. In the long-term, Georgians will benefit from the new system, lawmakers said.
"Most traditional buyers that buy from a car dealer or used car dealer, they have one tax now that's less than the two taxes they used to pay. It should stimulate the industry and should pick up sales in Georgia," rep. Larry O'Neal, the Republican Majority leader.
Under the new law, when you buy a new or used car, you'll no longer pay sales tax and then the annual birthday tax. Instead you'll pay a one-time title transfer tax, which is equal to about 6.5 percent of the car's value.
The new car tax system went into effect March 1.
At the same time, lawmakers work to correct tax problems with car leases. Efforts to correct the lease mistake were complicated by separate questions involving the effect of the new title tax on some used car dealers. The legislature is leaving some of those issues to regulators at the state Department of Revenue.
"Hopefully we have reached the best compromise possible. But as with all tax bills, we will probably have to come back and tweak something we didn't anticipate. But I think for now, we are in a good space to make certain that everyone who is buying a car in the state of Georgia is being treated fairly," said Minority Leader Rep. Stacey Abrams.
The revisions to the car tax system must get the governor's signature before going into effect.
Under the new car tax system, if you got your car before 2012, you'll continue to pay the annual birthday tax until the car is sold.