COBB COUNTY — The Cobb County Tax Commissioner’s office is bracing for big changes beginning March 1, when the car tag portion of a 2012 tax reform law takes effect. Starting Friday, the annual ad valorem tax — known as the “birthday tax” — will no longer be collected on new car purchases, and neither will sales tax. Those amounts will be replaced by a one-time title ad valorem tax, starting this year at 6.5 percent of the vehicle’s fair market value. Purchases made in 2014 will be subject to 6.75 percent, and 2015 buys will be taxed 7 percent.
The biggest sticker shock will be experienced by newcomers moving their cars in from other states and people who buy cars from other individuals, known as “casual sales.” Neither transaction has been taxed in Georgia before. Tax Commissioner Gail Downing said her office is preparing for customers’ reaction to the new taxes. In short, they are bracing for outrage “if you tell someone you can’t give them a tag and then they can’t drive.” That preparation includes talking to police about the potential for violence. “Everybody is at Code Red awareness for the potential for increased walk-in traffic and, to a degree, some increase in customer dissatisfaction,” she said. “We’re not having officers in our lobbies. If we need it, we might.” Front-line staff members are accustomed to dealing with dissatisfied patrons, Downing said. “The nature of the business we do is we deal with customers all the time. We deal with angry customers. It’s nothing new. Are they going to be any more angry?” she said. “We have everybody on alert. ‘Be prepared to materialize if we need you.’”
The sheer numbers anticipated, even of completely peaceful taxpayers, led to examining all five tag offices to improve foot traffic flow.
“We’re adding a station and changing how people come in and go out,” Downing said about a satellite office on Lower Roswell Road.
There are unknowns for which there has been no training available, such as the actual computerized entry process.
“The truth of the matter is, the system will go live for the first time on March 1. It’s like they’re going to flip a switch,” Downing said.
And starting on a Friday may lead to a working weekend for the system’s techies.
“It gives the state time to work through bugs,” Downing said. “Any time you go from one system to another, you’re going to encounter bugs.”
Extra staff have been added, including floor managers to “work the line,” checking to make sure customers have the paperwork — and payments — needed.
“I’m probably going to be one of those people,” Downing said. “It’s all hands on deck. We’re all going to divide and conquer.”
Beyond that, the best crowd-control barrier may be the tag office’s motto, “save time, skip the line,” which has been publicized in various media, including a YouTube video.
“Don’t be there if you don’t have to be there,” Downing said. “It’s not going to be an option to do this transaction on the website, but you can get information online so you can send your payment through the mail and not come into the office.”
Extra operators will be answering the helpline at (770) 528-8247 while customer service representatives will be answering inquiries sent to email@example.com, so customers can get answers from home.
The new law allows one exception to TAVT, county Tax Director Sharon Dorfman said.
Car buyers who want to ditch the birthday tax and switch to the one-time tax, can “opt in” even if they bought their vehicles between Jan. 1, 2012 and Feb. 28.
Dorfman encourages them to wait out the initial surge.
“We sent opt-in letters to the customers that qualify. We sent out 7,500 letters. So it would be terrible if everybody showed up March 1. You have the entire year,” she said.
Dorfman said there are advantages to the new system.
“It’s a pretty good deal for people who buy cars from dealers because the TAVT is in lieu of sales tax,” she said. “If you opt in, if you get credit for sales tax and any ad valorem you paid in 2012 or 2013. If you keep a car for a few years — I run mine till the wheels fall off. So for me, that’s a great deal. One time, and then I pay my $20 tag fee. Get my emissions, my insurance, I’m good to go.”
Dorfman said the lump sum is based on 100 percent of the assessed value, not the 40 percent the annual ad valorem tax assessed.
“It is going to be a sizeable amount. Let’s say you have a $10,000 vehicle. That equates to $650 for that TAVT when you come in,” she said. “We expect that car dealerships can work that TAVT into the financing.”
Car dealers’ POV
Daniel Diemer, general manager of Day’s Chevrolet in Acworth, said he didn’t know if car loans can include the new tax the way they could sales tax.
He and his staff are “still gathering information,” including watching online seminars from the Georgia Automobile Dealers Association.
Those lessons left unanswered questions, Diemer said.
“It’s mind-boggling to us that it’s getting ready to start a week away and there’s no more information that we’ve been given,” he said.
Diemer said leases, which are taxed on monthly payments, may change for the worse with the lump-sum collection.
“From what we’ve read so far, I think it will have a negative effect on leasing. It takes away the cost advantage of leasing,” he said.
There may be changes coming to that part of the legislation cosponsored by Rep. Mickey Channell of Greensboro.
“They’re trying to work out a few minor changes to pass before March 1,” Diemer said.
Dealers are not the only ones in the dark.
“We’ve had a lot of inquires about it. People are just trying to understand what the tax rate will be. They want to confirm the ad valorem tax is going away,” he said. “People think it’s an advantage.”