Legislation that has passed the Georgia House could cost used-car buyers more than $200 million a year in taxes, but Georgians who lease vehicles would save big money, according to a state analysis.
The measure, House Bill 340, was approved by the House Friday evening on the final day for legislation to pass at least one body to stay alive for the 2017 session.
The state fiscal note, a financial estimate of the winners and losers of the bill, comes as no surprise to the used-car dealers lobby, who have complained that the bill amounts to a big tax increase for its customers.
Supporters say it would merely force used-car buyers to pay the tax under the same system that governs new-car buyers. House Bill 340 is supported by the new-car dealers’ lobby.
The battle between car dealers is over a provision that essentially would charge the 7 percent tax on the sale of a used car based on the sales price or the state’s book value of the motor vehicle, whichever is higher.
Generally, the sales price is higher.
Currently, according to backers of the bill, new cars are taxed based on that formula, whereas used cars are taxed at the typically lower book value.
The state estimates say that by fiscal 2019 - the first full year the law would be in effect - the change could mean an extra $237 million in Title Fee Ad Valorem Tax payments. That could rise to $268 million by 2022.
Another part of the bill lowers the bill on the same tax to those who lease cars, cutting their tab by up to $74 million in 2019, rising to up to $106 million by 2022.
The bill also redistributes some of the car tax money Georgians pay, giving more of it to local governments.
House Bill 340 is in the Senate Finance Committee awaiting consideration.