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Georgia Fixes ‘Birthday Tax’ Law For Leased Cars

Gov. Nathan Deal has signed legislation fixing a provision in a tax reform law the General Assembly passed last year ending the state’s “birthday tax” on cars.

The governor put his signature to a compromise reached by negotiators for the state House of Representatives and Senate, after a brief tussle between the two legislative chambers.

Under the bill lawmakers enacted last year, Georgians who buy a new or used car no longer have to pay an annual personal property tax on the vehicle due on their birthday. Instead, they pay a one-time title fee.

However, an unintended consequence discovered after the legislature passed the new law required drivers who lease a car to pay both the title fee and a monthly sales tax on the lease.

Such double taxation threatened Georgia’s car leasing industry. As a result, the House passed a bill last month getting rid of the sales tax on auto leases, leaving just the title fee.

The Senate agreed with the change, but inserted an amendment into the bill late last week providing a tax break for “buy here pay here” car dealers, who typically offer higher-interest car loans to buyers with poor credit.

Read more: AtlantaBusinessChronicle

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