# So, is leasing now a thing of the past in GA?



## bnesti (Apr 16, 2006)

Good news... After some searching i can find comments that this modification appears to get rid of sales and use on monthly payments...

Now, i wonder about these details (original title tax law and/or after this recent modification):
- if leasee buys out lease (say 36 months later), and title is changed from bank/leaser to you, does one have to pay title tax again, after paying title tax at initiation of lease?
- if one trades in a lease vehicle on a new vehicle, prior to end of lease, does one get credit for the trade value?

Bryan


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## Gluhwein (Aug 21, 2011)

Thomas Jefferson and the Adamses would never have put up with this.


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## jagu (Nov 7, 2006)

Corleone said:


> Sounds like they may have fixed this already.
> 
> http://www.ajc.com/news/news/state-regional-govt-politics/fix-found-for-new-car-tax/nWhmJ/


I don't see a specific fix yet. It appears that they are leaving it up to the Dept of revenue to decide the tax rate.


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## bnesti (Apr 16, 2006)

I am on mailing lists for several dealers... And, today i received an email from one (non-BMW) dealer containing their take on some of the changes...

" To summarize, the changes to the Title Ad Valorem Tax (TAVT) in HB 266 are as follows:
- Changes the definition of Fair Market Value (FMV) for new motor vehicles from DOR value to the greater of retail selling price or DOR value, less rebate and trade-in. In the case of a lease, FMV is the greater of the "agreed upon value" pursuant to the lease agreement, or DOR value, less rebate and trade-in.
- The tax rate is still 6.5% of FMV.
- FMV for used vehicles remains the DOR value.
- Retail selling price or agreed upon value includes charges for dealer fees and add-ons, but does not include any extended warranty or maintenance agreement itemized on the dealer's invoice.
- Changes the time limit to submit title applications from 10 days to 30 days. Penalty for failure to submit within 30 days is 5% of TAVT; 60 days is 10% of TAVT; 90 days is 15% of TAVT.
- Exempts from TAVT vehicles registered under the International Registration Plan (common carriers);
- Exempts leases from sales and use tax, therefore, no sales and use tax on monthly lease payments.
- Removes TSPLOST from motor vehicle sales.
- Allows loaners to be in loaner service for 366 days without triggering TAVT.
- Exempts from TAVT certain transfers of title such as abandoned vehicles, foreclosure of mechanic's liens and transfers for purposes of resale."


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## F32Fleet (Jul 14, 2010)

Doesn't look like they fixed it for the individual leasee. After debating the Z"what if's" my wife decided to lease her new car in Feb instead of Mar. Logically the double tax made sense on one level because the annual car tag tax went away. From a sales perspective it really increased the upfront costs on a lease. It will be interesting to see what the DOR decides to implement.

Sent from my MB525 using Bimmer App


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## thegandalf (Sep 8, 2012)

bnesti said:


> I am on mailing lists for several dealers... And, today i received an email from one (non-BMW) dealer containing their take on some of the changes...
> 
> " ....
> - Exempts leases from sales and use tax, therefore, no sales and use tax on monthly lease payments.
> ....."


Thanks for posting. All this is pretty confusing indeed.
At least from this point, there doesn't seem to be the double taxation as there wouldn't be any sales tax applied anymore to the vehicle.

The part that still confuses me is:
The leasing company has to pay TAVT on the full value of the car when the lease originates, and I asume they would pass that on to the consumer.
So now, you don't pay sales tax on your monthly payment, on you don't pay the brithday tax (for sake of this excercise, lets asume about $300 per year for a stripped down 328i, so 900 for 36 month which is $25 per month)
If you have to add the 6.5 TAVT based on the full price of the car you will wind up paying about $20 to $25 extra per month compared to the way it used to work (including $25 per month for the birthday tax.

But if you return your car and it is resold, the TAVT would be pay again? Resulting in double taxation?
Or does BMW get a credit when they get the car back? And if so do they pass it to the consumer?

I am quite lost with this.:bawling:

Help


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## F32Fleet (Jul 14, 2010)

thegandalf said:


> Thanks for posting. All this is pretty confusing indeed.
> At least from this point, there doesn't seem to be the double taxation as there wouldn't be any sales tax applied anymore to the vehicle.
> 
> The part that still confuses me is:
> ...


I guess we'll have to see how the lease deals are advertised.

Sent from my MB525 using Bimmer App


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## thegandalf (Sep 8, 2012)

BMWTurboDzl said:


> I guess we'll have to see how the lease deals are advertised.
> 
> Sent from my MB525 using Bimmer App


Yup... Right now we need for the Governor to sign the new law, and then the DOR has to come with the regulation.

Good think is I am waiting for the 2013 3 series with the new Idrive, so I have some time to figure out the details.


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## jagu (Nov 7, 2006)

thegandalf said:


> Yup... Right now we need for the Governor to sign the new law, and then the DOR has to come with the regulation.
> 
> Good think is I am waiting for the 2013 3 series with the new Idrive, so I have some time to figure out the details.


My thought too. I was going to buy an F10 last month but I will just do ED on a refreshed 2014 unit . Hopefully there will be a solution by summer's end.


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## gt0279a (Dec 29, 2007)

Currently the law states the dealers pay the TAVT and you still pay monthly sales tax on the payment. This is not something they can pass on to consumers.

http://onlinemvd.dor.ga.gov/TAP/faqs.aspx

Yearly registration would just be the $20 renewal fee. So for a lease, it's looks to be cheaper w/o having to the old AVT.


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## thegandalf (Sep 8, 2012)

The way I read that, there is nothing there that says the leasing company cannot pass the cost to you.


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## 3ismagic# (Mar 17, 2011)

There are two types of people who lease cars:
1. Savvy financial types who know the ins and outs of a lease and how to use them to their financial/tax advantage given their car preferences and needs.
2. Morons who want the lowest possible monthly payment who get talked into a lease without really understanding how they work or how to negotiate their terms.

As ChrisChueng points out for both of these groups leasing may still be advantageous if the overall numbers can be made to work.


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## bnesti (Apr 16, 2006)

gt0279a said:


> Currently the law states the dealers pay the TAVT and you still pay monthly sales tax on the payment. This is not something they can pass on to consumers.
> 
> http://onlinemvd.dor.ga.gov/TAP/faqs.aspx
> 
> Yearly registration would just be the $20 renewal fee. So for a lease, it's looks to be cheaper w/o having to the old AVT.


Re: not being able to pass TAVT to consumer... Do you have a link or other info? This is a first I have heard that.

Directly, or indirectly, i am thinking any additional fees that the leasing company pays will be passed to the consumer, especially given that this title tax is a sizable chunk of change (e.g. $2600 tax on a $40000 vehicle; for 2013 - 6.5%).


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## jagu (Nov 7, 2006)

gt0279a said:


> Currently the law states the dealers pay the TAVT and you still pay monthly sales tax on the payment. This is not something they can pass on to consumers.
> 
> http://onlinemvd.dor.ga.gov/TAP/faqs.aspx
> 
> Yearly registration would just be the $20 renewal fee. So for a lease, it's looks to be cheaper w/o having to the old AVT.


They used to pass it on with the old tax and they will probably do so with the new tax.


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## thegandalf (Sep 8, 2012)

bnesti said:


> Re: not being able to pass TAVT to consumer... Do you have a link or other info? This is a first I have heard that.
> 
> Directly, or indirectly, i am thinking any additional fees that the leasing company pays will be passed to the consumer, especially given that this title tax is a sizable chunk of change (e.g. $2600 tax on a $40000 vehicle; for 2013 - 6.5%).


This.^

And it's still double taxation, whatever the case.
Congress then had to ammend this portion of the law and we still have to see what the final rules are.They need to hurry or they will really hurt the industry.


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## jagu (Nov 7, 2006)

thegandalf said:


> This.^
> 
> And it's still double taxation, whatever the case.
> Congress then had to ammend this portion of the law and we still have to see what the final rules are.They need to hurry or they will really hurt the industry.


This will encourage more European delivery in Georgia to accommodate the extra $4k cost. It will also kill all short term leases and lease assumptions.


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## I Love BMW's (Mar 18, 2006)

I've been leasing a new car for my wife every two years and buying or leasing a new one for myself every two or three years. The new law is making me re-think what to do. 

I will probably buy both cars rather than lease based on the new law - and keep them longer since there is no trade in credit. I do like not having the yearly birthday tax (especially with 6 cars!), but I have to run the numbers to see what the break even point is.


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## thegandalf (Sep 8, 2012)

So, from what I can see they will be getting rid of the sales tax on the payments, but we still have to deal with full the 6.5% (and later 7%) tax on the full amount of the car (tricky part is to find out what value they decide to take for Fair Market Value, as I read it, if you manage to get a highly discounted car, and the FMV is higher you will pay taxes on the FMV, otherwise if you don't negotiate and pay MSRP (not sure if anyone does this  ) you would pay your taxes on the full price... So you pay tax on the higher of both values.

I am not sure how it works on other states where tax on the full price of the car is arealdy the norm for leases" When you return the car, is that consider a trade in so it's FMV offsets the tax on the new car (probably not, in which case the same car gets fully taxed again when someone else purchases it?).

In any case, I ran a few scenarios on excel, for a fairly loaded F30 (MSRP $50k), according to what I see (estimating about $1400 in birthday taxes that won't have to be paid any more), it seems that the new law would cost my lease about $640 if I paid the taxes of front (which might not be such a great idea if something happens to the car) or $780 (including financing charges) if a rolled it in the car. In any case will cost me a little over one extra payment over the course of a 36 month lease. I wonder if a 48month lease might make more sense then (since you would save another birthday tax, over the life of the loan).?


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## gt0279a (Dec 29, 2007)

thegandalf said:


> The way I read that, there is nothing there that says the leasing company cannot pass the cost to you.


Sorry, I had read another article that was more clear. Basically, not to be paid by the dealer, but by the financing company. The dor website is full of conflicting information.
The latest document I saw now says:
http://motor.etax.dor.ga.gov/motor/DealerSection/forms/pdf/InfoBulletin_HB266_SummaryofChanges_03_06_2013.pdf
Lease Changes:
-TAVT rate on leased vehicles follows the ordinary rate (6.5% in 2013).
-Leased vehicles are now exempt from sales and use tax on the monthly lease payment.
-Lessor must register with DOR and pay $100/year fee. $2,500 penalty for failure to register.

I calculated my current lease and got the following numbers:

Old system:
$2411.92 total in tax (monthly sales tax + ADV tax for 3 years + sales tax on any rebates/dealer fees/down payment, etc.)
New system:
$2479.75 (6.5% x the 'agreed upon value of the vehicle' in the lease contract.)

It's a wash, but now that 6.5% has to be paid to the dor upfront.


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## thegandalf (Sep 8, 2012)

Thanks!


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## gt0279a (Dec 29, 2007)

Another benefit I see is the TAVT is fully deductible on your taxes as a 'personal property tax' if you itemize


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## bnesti (Apr 16, 2006)

gt0279a said:


> Another benefit I see is the TAVT is fully deductible on your taxes as a 'personal property tax' if you itemize


TAVT tax deductible? That would be awesome...

Do you have a link on this?

Quick search on Google, and I found numerous comments that it is NOT tax deductible...

"25. Since the title tax is a one-time ad valorem tax, will it be an allowable itemized deduction on your income tax?
No, to be deductible as a ***8216;personal property tax***8217;, one of the conditions is that the tax is charged on a yearly basis. The new title tax is a one-time tax that does not meet this test. Please consult IRS Publication 17 or a tax adviser."

"This new tax does not appear to be deductible as personal property tax since it is not charged on an annual basis so that is one downside. Overall this is a great deal for Georgia's taxpayers."

EDIT (added) - Source for first quote (25. Since the...) is from a 4 page FAQ document on accg.org 'Association County Commissioners of Georgia'.


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## thegandalf (Sep 8, 2012)

Ok, so the birthday tax (Ad Valorem) was deductilble. And for leases sales tax was only paid on the depreciation...
TAVT is based ont he full purchase price, even for leases and might not be deductibe?
This is not a great deal if you are leasing.


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## Bret_T (May 10, 2012)

finnbmw said:


> The new system where you pay a 6.5% title fee (going up to 7% later) and no annual fees replaces the old system where you paid 6-8% sales tax (depending on county) plus an annual fee based on vehicle value. I think the new system is better.
> 
> For somebody like me, who buys the car outright, never leases and keeps it until the wheels fall off, this new system is great. Now I just pay the state a one time fee and I am done paying taxes on the car as long as I own it.


+1
I'm a straight buyer and keep my cars for about six years. This will be a tax reduction for me.

The thing that I don't understand is how this effects European Delivery for Georgia. If someone understands, please explain.


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## vm (Jul 16, 2002)

Bret_T said:


> +1
> I'm a straight buyer and keep my cars for about six years. This will be a tax reduction for me.
> 
> The thing that I don't understand is how this effects European Delivery for Georgia. If someone understands, please explain.


As the tax is paid at registration is the same as sales tax before.


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## thegandalf (Sep 8, 2012)

vm said:


> As the tax is paid at registration is the same as sales tax before.


But the birthday ad valorem tax disappears.


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## gpburdell (Sep 23, 2012)

vm said:


> As the tax is paid at registration is the same as sales tax before.


This is only true if you don't do a trade. Sales tax was calculated on the net price, the title tax is calculated on the whole price. So if your trade was worth $20,000 you'll see a $1,200+ difference.


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## jagu (Nov 7, 2006)

Bret_T said:


> +1
> I'm a straight buyer and keep my cars for about six years. This will be a tax reduction for me.
> 
> The thing that I don't understand is how this effects European Delivery for Georgia. If someone understands, please explain.


It's not treated differently. I am just saying that it will encourage European delivery for short term leases in order to defray the increased tax/cost for short term leases.


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## vm (Jul 16, 2002)

gpburdell said:


> This is only true if you don't do a trade. Sales tax was calculated on the net price, the title tax is calculated on the whole price. So if your trade was worth $20,000 you'll see a $1,200+ difference.


Well burdell (go jackets!) we can divide the results into 2 groups:

Winners:
Buyers of new cars outright that keep them for a while
Buyers of used cars from dealerships that keep them for a while

Losers:
Buyers of cars from private parties.
Buyers of cars (new or used) with a sizable trade-in
Lessees (now GA is as bad as TX)
People moving into the state of GA and bringing a car (big losers!)


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## bnesti (Apr 16, 2006)

gpburdell said:


> This is only true if you don't do a trade. Sales tax was calculated on the net price, the title tax is calculated on the whole price. So if your trade was worth $20,000 you'll see a $1,200+ difference.


George P. Burdell..... +1. :thumbup:


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## Bret_T (May 10, 2012)

vm said:


> Well burdell (go jackets!) we can divide the results into 2 groups:
> 
> Winners:
> Buyers of new cars outright that keep them for a while
> ...


While the private party buyers, sizable trade-in buyers and those moving to GA will initially pay more than they otherwise would have, that doesn't mean they will be losers in the long run. The math depends on their particular situations. Overall, it's expected to bring in less revenue (in other words an overall tax cut), so that's good in my book. And yes, go jackets!


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## TXPearl (Apr 16, 2010)

vm said:


> Well burdell (go jackets!) we can divide the results into 2 groups:
> 
> Winners:
> Buyers of new cars outright that keep them for a while
> ...


Sounds like it's now much worse than TX. We don't have a title tax, have a slightly lower sales tax rate (6.25%) and can use a trade credit on a lease (while sometimes it makes more sense to simply turn in a lease vehicle rather than trade, BMWFS can usually help out with that).

That's too bad - I've always considered TX one of the worst states for leasing. Nevertheless, plenty of people still do it (self included), it's just more work.


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## F32Fleet (Jul 14, 2010)

TXPearl said:


> Sounds like it's now much worse than TX. We don't have a title tax, have a slightly lower sales tax rate (6.25%) and can use a trade credit on a lease (while sometimes it makes more sense to simply turn in a lease vehicle rather than trade, BMWFS can usually help out with that).
> 
> That's too bad - I've always considered TX one of the worst states for leasing. Nevertheless, plenty of people still do it (self included), it's just more work.


I heard trade-ins @ dealerships get a credit. So not that far off from TX.

Sent from my MB525 using Bimmer App


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## thegandalf (Sep 8, 2012)

BMWTurboDzl said:


> I heard trade-ins @ dealerships get a credit. So not that far off from TX.
> 
> Sent from my MB525 using Bimmer App


This is how I read it too. I hope I am not wrong.

I still think in most cases if you manage to sell your car privately the price advatage will be higher than the credit (but, unfortunately, that difference used to stay in your pocket, now part of it will go to the state....).


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## Meiac09 (Jan 2, 2006)

Go figure Georgia would tax the crap out of new cars after all the tax incentives to get carmakers to move into state.

They probably did it to beat people who registered their cars at their beach houses in SC, then moved to GA after six months to only pay $300 in sales tax. I know half of my college did that.


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## Bret_T (May 10, 2012)

Meiac09 said:


> Go figure Georgia would tax the crap out of new cars after all the tax incentives to get carmakers to move into state.


While the initial tax will be slightly higher, the elimination of the ad valorem tax will more than make up for it after a year or two. It's an overall tax reduction that will benefit buyers of new cars most.


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## Corleone (Oct 27, 2004)

So, 6 weeks on, does anybody have any practical experience for how this is actually working in the real world? On the Georgia Department of Revenue website, the FAQ states the following:

Q: Are leased vehicles subject to the TAVT?
A: Yes, the leasing company will have to pay the TAVT. The entity or individual leasing the vehicle will be subject to sales tax on the lease payments.

Are leasing companies passing the TAVT on to the lessee?


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## thegandalf (Sep 8, 2012)

Corleone said:


> So, 6 weeks on, does anybody have any practical experience for how this is actually working in the real world? On the Georgia Department of Revenue website, the FAQ states the following:
> 
> Q: Are leased vehicles subject to the TAVT?
> A: Yes, the leasing company will have to pay the TAVT. The entity or individual leasing the vehicle will be subject to sales tax on the lease payments.
> ...


I think they might not have updated that FAQ....

If I understand it right, the TAVT will be passed to the lessee, but there is no longer a sales tax and a birthday tax... I still don't understand how to properly estimate the TAVT...
I am at a loss. I am planning to attend the Ultimate drive event at the end of May. I will ask them about that in person then.


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## bnesti (Apr 16, 2006)

thegandalf said:


> I think they might not have updated that FAQ....
> 
> If I understand it right, the TAVT will be passed to the lessee, but there is no longer a sales tax and a birthday tax... I still don't understand how to properly estimate the TAVT...
> I am at a loss. I am planning to attend the Ultimate drive event at the end of May. I will ask them about that in person then.


Not an expert on TAVT... But, from what I understand, TAVT on new cars it is roughly 6.5% (for 2013; goes up in future years) times the car price (minus trade-in value), IIRC. I think there are some examples on the web that can be found.

On used cars, I think there are calculators online, that determine the FMV (value) that is used.


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## Bimmerlearner (Jan 4, 2009)

vm said:


> Another big thing on this law is that people moving to GA will have to pay this tax on the fair market value of their vehicles when the car is titled there.


Got caught on that. Traded car in, was worth more than new car, paid no sales tax. 8mths later moved states, charged sales tax because they said I'd paid none.


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## Corleone (Oct 27, 2004)

I see the Georgia Department of Revenue have finally updated the FAQ. It now reads as follows:

Q: Are leased motor vehicles subject to TAVT?
A: Yes.

Wow, thanks for the detailed clarification.


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## thegandalf (Sep 8, 2012)

So... no sales tax on the payment, no birthday tax, but a full 6.5% on the higher of the negotiated price or the FMV. Unless you are very good at negotiating, i assume the purchase price will be the higher.
A no brainer, huge improvement if you are buying.
If you are leasing i guess it could almost be a wash, but i think now is more expensive? Maybe closer to a wash if it was a 48 momth lease (but those are usually less attractive).


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## jagu (Nov 7, 2006)

thegandalf said:


> So... no sales tax on the payment, no birthday tax, but a full 6.5% on the higher of the negotiated price or the FMV. Unless you are very good at negotiating, i assume the purchase price will be the higher.
> A no brainer, huge improvement if you are buying.
> If you are leasing i guess it could almost be a wash, but i think now is more expensive? Maybe closer to a wash if it was a 48 momth lease (but those are usually less attractive).


On a 3 year lease, it's about $1400 more expensive for me. I used to only do 2 year leases but those are impractical now.


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## Yay-Z (Aug 13, 2007)

Maybe BMW will start to do tax credits for y'all like they do in Texas.


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## jagu (Nov 7, 2006)

Yay-Z said:


> Maybe BMW will start to do tax credits for y'all like they do in Texas.


Exactly what do they do in Texas?


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## bayoucity (Jun 11, 2010)

Yay-Z said:


> Maybe BMW will start to do tax credits for y'all like they do in Texas.


^ Is it that one-time deal during last December or this is an ongoing promo? Yeah, I'll like to know as well.


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## mcg-doc (May 3, 2005)

*Georgia Fixes 'Birthday Tax' Law For Leased Cars*

http://atlantablackstar.com/2013/03/09/georgia-ditches-ad-valorem-birthday-tax-on-cars/

As I understand , the tax on leases still applies up front, but the tax on monthly payments is dropped

HB 266
"Lease payments for a motor vehicle that is leased for more than 31 consecutive days for which a state and local title ad valorem tax is paid shall be exempt from sales and use taxes as provided for in this paragraph"


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## bnesti (Apr 16, 2006)

mcg-doc said:


> http://atlantablackstar.com/2013/03/09/georgia-ditches-ad-valorem-birthday-tax-on-cars/
> 
> As I understand , the tax on leases still applies up front, but the tax on monthly payments is dropped
> 
> ...


This is my understanding as well.

I recently purchased a 2013 328i , and I chose to purchase, instead of lease. I typically lease my vehicles, but with the TAVT changes, I chose to purchase.

My general thoughts on TAVT changes:
- For leases, the impact on leases was 'neutral' (at best); that is, comparing pre-TAVT (sales tax on payments + annual ad valorem) to TAVT (6.5% on entire price of vehicle, and no ad valorem). Others might differ, but my estimates are that the two scenarios are in the same ball park. The monthly payment (with TAVT) will be higher than pre-TAVT, but for pre-TAVT estimates, make sure you add in annual ad valorem costs.
- Also, for leases, my understanding is that there is a big $$ double-whammy if you decide to buy out your lease... that is, when you initiate the lease, you pay TAVT (currently 6.5%) on price of vehicle, and then when you buy out the lease (e.g., after 3 years), the change in title (leasing company to your name) will trigger TAVT again, on the value of the vehicle at that time.
- For purchases from a dealer, TAVT changes reduced overall ownership costs (vs pre-TAVT). Specifically, I paid TAVT (~ same amount as previous 'sales tax'), but I don't have pay ad valorem every year, which is a sizable amount on these vehicles.

For the above reasons, and these other reasons (below), I decided to purchase this time:
- Bigger USAA rebate with purchase
- No 'Aquisition Fee'
- Don't need to worry about miles driven (vs. allowable), in case my commute distance changes significantly

Each person puts different values on pros/cons for leasing versus purchasing... just thought I would share my thoughts.

Bryan


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## thegandalf (Sep 8, 2012)

bnesti said:


> This is my understanding as well.
> 
> - Also, for leases, my understanding is that there is a big $$ double-whammy if you decide to buy out your lease... that is, when you initiate the lease, you pay TAVT (currently 6.5%) on price of vehicle, and then when you buy out the lease (e.g., after 3 years), the change in title (leasing company to your name) will trigger TAVT again, on the value of the vehicle at that time.
> 
> Bryan


Congrats on your car (again).

I am pretty sure I read somewhere that the TAVT woudn't be charged again if car was purchased by lessee at lease end... 
I might be wrong but I think there is a provision for this.
If the car is bought by anyone else but the lessee then TAVT is charged again.

The big blow is that you know pay the full TAVT during the lease and when you return it, my understanding is you get "nothing" back, whereas when you trade the car in, the TAVT is somewhat discounted by the tax amount of your trade in...
So maybe now, you don't return a lease...you buy it and trade it, on the same day?

I will be placing my order next month. TAVT will be a big part of my conversation with my CA.


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## bnesti (Apr 16, 2006)

thegandalf said:


> I am pretty sure I read somewhere that the TAVT woudn't be charged again if car was purchased by lessee at lease end...
> I might be wrong but I think there is a provision for this.
> If the car is bought by anyone else but the lessee then TAVT is charged again.


That would seem to make sense, but I didn't recall reading or seeing anything on that. You could be right.

Good luck on your car order...


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## bnesti (Apr 16, 2006)

bnesti said:


> That would seem to make sense, but I didn't recall reading or seeing anything on that. You could be right.
> 
> Good luck on your car order...


Edit --- Update below...

So, just searched a little, and I found this:

_*Is a buyout amount or purchase option at the end of a lease subject to sales and use tax?
No. However, because the title will be transferred to the lessee (who is now the purchaser), the
lessee will be liable for the TAVT at the time they apply for a certificate of title. A buyout or
purchase option of a lease, when exercised, is a purchase so long as title passes to the customer
for consideration; thus, this transaction is exempt from sales and use tax because it will be
subject to TAVT.*_

I read that as if you buyout the vehicle at lease end, you won't be responsible for 'sales' tax, but will be responsible for TAVT.

It is from a dealer's tax guide... however, it looks like it was updated in Jan 2013. So, if this changed with the ~March update, it might not be accurate in this document.

FYI - Google search terms I used "georgia tavt lease buyout". It was the first link.


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## gmblack3 (Mar 14, 2008)

Not a lease, but bought our 12 535i GT here in GA (thanks Adrian) new in Feb of 12. Of course paid 7% sales tax on purchase price $55k or so. Wifes Bday in June, so paid $6xx in June of '12 ad valorem tax. This year got the letter in the mail saying we could opt to the new program. Online estimator claimed we would pay -0- additional tax and never pay ad valorem tax again. Sure enough wife took bill of sale from original purchase and paid no ad valorem tax when she opted for the new program. I'll be doing the same for my GMC 2500 truck in Nov that I bought in June of '12.


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## Lllwlf (Jul 12, 2012)

Bumping this thread.... Do you get slammed twice like they do in TX? Anyone know the answer on if you have to pay the TAVT (again) on a lease buyout?


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## bayoucity (Jun 11, 2010)

TX hates lessees. We are treated like 2nd class citizens here.

:thumbdwn:


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