Georgia's new "title tax" law, which went into effect March 1, is creating an unexpected expense for Gwinnett County. The county is facing a possible increase in the number of appeals by car buyers who are seeking a reduction in the value of their newly purchased automobile.
Car buyers purchasing a vehicle beginning the first day of March must pay a title tax of 6.5 percent of the value of the vehicle. This new tax replaces the annual ad valorem "birthday tax" for cars purchased after this date. The new tax is accessed on any vehicle, new or used.
According to an AJC report, Gwinnett's Chief Appraiser Steve Pruitt said he expects a substantial increase in the number of appeals. Pruitt said his office generally sees some 100 to 120 appeals annually, but is expecting 3,500 to 5,000 over the next year.
Because of the expected increase in volume of appeals, the Gwinnett County Board of Commissioners recently approved a $175,000 contract to allow an outside company to process those appeals.
"I just didn't have the staff to meet with the taxpayers," and make the determinations," Pruitt told the Gwinnett Daily Post recently. "We're going to make it an easy process for the taxpayers."
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The company that will handle the automobile appeals, LMC Inc, will be paid $38 for every case handled.
Pruitt's estimate of the number of appeal expected is based on the the 207,000 title changes in Gwinnett between June 2011 and July 2012.
It's expected that most of the appeals will come from private sales between individuals or people moving into Georgia. Automobile dealers are able to roll the cost of the tax into the sale of the car.
The title tax on a $10,000 car would be $650, for an automobile valued at $20,000 that tax would double.