The purpose of this email is to educate you on topics that will soon require change in the way we do our business. I would like to clear up any confusion about what you may have heard from other Dealers, the Tag Offices or Companies soliciting you. Changes are coming for all car dealers and we want to do our very best to minimize confusion, communicate and educate our membership and keep you informed.
TOPICS
1) Elimination of the Casual Sales Tax Exemption and Annual Ad Valorem (Birthday) Tax after March 1, 2013:
This is a significant Legislative victory for all Car Dealers and a good deal for all Consumers. The Casual Sales Tax Exemption for individuals buying and selling cars between each other goes away for good after March 1, 2013. There will no longer be any incentive for individuals to buy cars from other individuals. This change should drive more customers to dealer lots for convenience, inventory selection and financing assistance. For Consumers, after March 1, 2013, they will pay a one-time Title Ad Valorem Fee up front and never pay Ad Valorem Tax again.
2) Sales Tax will be replaced with the new (TAVT) Title Ad Valorem Tax Fee beginning on March 1, 2013:
The Georgia Department of Revenue has been working diligently for quite some time to bring Georgia up to speed with technology which will streamline titling, recording liens and tagging processes and change the way the state collects fees from sales of vehicles. Beginning on March 1, 2013, Sales tax will go away and be replaced with a one-time Title Ad Valorem Tax (TAVT) which will be based on 6.5% of the Fair Market Value of each vehicle, not the Sale Price. The consumer will not be subject to any more Ad Valorem Tax going forward. Beginning on January 1, 2014 the TAVT Fee goes to 6.75%. Then on January 1, 2015 the TAVT Fee goes to 7%. The method for calculating Fair Market Value is the same mechanism the DOR uses to calculate Ad Valorem Tax now. To check the Fair Market Value on your vehicles click on this link. http://onlinemvd.dor.ga.gov/Tap/vinnumber.aspx What we have found is that in most cases, the Fair Market Value is less than the final Sale Price. This may mean that the Title Fee is less than what Sales Tax would be. The Trade-In credit remains as it is now so the Title Fee will be calculated on the Trade Difference. The Title Fee will be required to be paid by the Dealer to the Tag Office where the customer lives at the time an application for Title is made. The new Title Fee will apply to ALL vehicle purchases, including Casual Sales between Individuals. All sales of vehicles after March 1, 2013 will be subject to the Fee going forward. A special provision in the new law will allow consumers who have purchased a vehicle after January 1, 2012 and before February 28, 2013 can opt into the Title Fee system between March 1, 2013 and December 31, 2013.
3) Deferment of the new (TAVT) Fee for BHPH Dealers:
We are working with our Attorneys, our Lobbyists and the Authors of HB386 on Amendments of this Bill which will allow BHPH Dealers the option to defer payment of the Fee over time. GIADA understands how important this is to BHPH Dealers and we doing everything in our power to get this done for you. Please call the GIADA Office if you have any questions about the deferment of the Fee.
4) Explanation of (ELT) Electronic Lien and Title:
The state is moving to all electronic liens next year and they are rolling out a staggered schedule of mandatory participation beginning on January 1, 2013. This simply means that once the title application has been submitted to the Tag Office that includes the perfection of a lien, there will not be a title printed and mailed back to the lien holder. Once the loan has been paid off or in the event of a repossession, the title will be printed and provided to the appropriate party. Any finance company or BHPH Dealer that has recorded 500 or more liens in calendar year 2012 will be required to utilize the Electronic Lien and Title Program beginning on January 1, 2013 for all security interests and liens on Georgia certificates of title. Then on July 1, 2013 the same applies for any finance company or entities who recorded 200 or more liens in 2012. Then 100% compliance beginning on January 1, 2014. GIADA recommends TitleTec as the preferred ELT Service provider for ELT Services. Contact TitleTec at 866-689-0578 or ELTSupport@TitleTec.com.
5) Explanation about (ETR) Electronic Title and Registration:
This is an optional service, for now, that expedites the title application process. Dealers who choose this Service will have the ability to apply for a title electronically, eliminating the need for interacting with the county tag offices. ETR allows Dealers to register vehicles on behalf of the buyer, eliminating the need for them to apply in person. Customer license plates are automatically mailed to your customer. Dealers are allowed to charge separately for the ETR service, creating a new profit opportunity. When HB386 goes into effect on March 1, 2013 Dealers will be required to submit all title application paperwork and fees to the tag office in the County where the customer lives. For ETR Dealers, the title application and fees will be delivered electronically to the respective tag offices. This means no trips to the customer's Tag Office will be required. To sign up for ETR Service, GIADA recommends that you call TitleTec. TitleTec is the technology company that powers the TOPs GIADA Web Service you are currently using to process Temporary Operating Permits. Title Tec will outline the ETR Fees that are associated with this service. Contact TitleTec by email: sales@titletec.com or call 866-689-0578.
Depending on your particular business model, GIADA recommends that every Dealer give serious consideration to subscribing to the ETR System. You can pass the cost on to your customer. We chose TitleTec to Partner with our Association to build the GIADA TOP's Web Portal System which is running very smoothly. GIADA is proud to support TitleTec while they begin to upgrade TOP's Dealers to the new ETR System. The TitleTec system will streamline the titling process, save you money and provide a better overall customer experience.
The future is here and we need to embrace it and be willing to change our business model to adapt to new technology that in the end, will make us better at what we do.
