House Cuts Birthday Tax on Vehicles
by
Maggie Lee
Georgia Online News Service
The House agreed overwhelmingly to do away with annual vehicular ad valorem taxes -- the so-called birthday tax -- that counties collect on the value of a car.
It would be replaced with a one-time title fee of 7 percent of the sale price, capped at $2,000. That will be a savings for most car buyers, according to the bill's supporters.
"If you hold a car for five to seven years, you will get your money back" on a car at the average price of $8,000, says Rep. Tom Rice (R-Norcross).
The Senate still needs to give its approval for the legislation to become law.
Rep. Larry O'Neal (R-Bonaire) praised the bill emotionally, saying it cuts the government out of his car purchases for the first time in his life.
The bill drew fire because it appears to favor buyers of the most expensive cars. Cars under about $30,000 would cost 7 percent in taxes. All other car buyers would pay $2,000, no matter the value of the car.
Opponents like Rep. Calvin Smyre (D-Columbus) alleged that if the bill results in lower gross tax collection, schools or local government could get hurt.
Muscogee County would lose $1,870 on a car sale of $29,000 under the proposed system, according to his calculations
"This is taking money from the local school system," he said.
O'Neal said Smyre's collections are incorrect, based on figures from an earlier draft of the bill.
Only after the vote did a fiscal note -- an independent, official calculation of costs -- appear. It is dated the day of the vote, March 12. Rep. DuBose Porter (D-Dublin) personally delivered it to the press gallery. According to those figures, the state would net some $1 billion between 2010 and 2014; local governments $590 million in the same time frame.
"Get the fiscal note today?" Smyre said. "That's responsible."
But the note appears support Smyre's objection in part.
"The net effect of this activity will be to decrease overall revenues in the years after 2011," it concludes.
Maggie Lee specializes in quality of life topics, Atlanta's international communities and general reporting. She covers Georgia economic development and the Chinese community as a stringer for China Daily and chronicles life in Georgia's most diverse county for the DeKalb Champion. [full bio]
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