You have reached your limit of free articles this month.

Enjoy unlimited access to myAJC.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and bonus content- exclusively for subscribers. Starting at just 99¢ for 8 weeks

X

Welcome to myAJC.com

This subscriber-only site gives you exclusive access to breaking news, in-depth coverage, exclusive interactives and bonus content.

You can read free articles of your choice a month that are only available on myAJC.com.

Senate panel backs bill that hikes taxes on Georgia used-car buyers


The Senate Finance Committee approved legislation Monday that could mean a $200 million a year tax hike for used-car buyers.

Supporters of House Bill 340 by Rep. Shaw Blackmon, R-Bonaire - which is backed by new-car dealers - view it as cleaning up a loophole that currently allows used-car dealers to get an unfair competitive advantage on taxes and to sometimes scam the system.

Who ultimately wins one of the General Assembly’s hottest business battles — over how cars are taxed — probably won’t be decided until the final days of the General Assembly’s session. The measure now goes to the full Senate for a vote.

State estimates say that by fiscal 2019 — the first full year the law would be in effect — the proposed changes in how used cars are taxed could mean an extra $237 million in title fee payments. That could rise to $268 million by 2022.

Another part of the legislation would lower the bill on the same tax to those who lease cars, cutting their tab by up to $74 million in 2019, a number that could grow up to $106 million by 2022.

Combined, the Georgia Automobile Dealers Association (new-car dealers) and the Georgia Independent Automobile Dealers Association (used-car dealers) have contributed about $1.1 million to the campaigns of lawmakers and top state officials in the past decade.

Lt. Gov. Casey Cagle, the Senate president, plays a key role in what gets passed in the session’s final days, and his campaigns have received more than $31,000 from the new-car political action committee, which supports the bill. The car dealership PAC is one of Cagle’s largest political backers.

The used-car dealers lobby, which opposes HB 340, has contributed at least $4,500 to Cagle as well.

Under HB 340, used-cars buyers would be charged the 7 percent motor vehicles tax on the sales price of the motor vehicle sold by a dealer.

Currently, new cars are taxed based on that formula, whereas used cars are taxed at the typically lower book value.

So, if somebody buys a used car for $10,000 and owes the 7 percent tax, but the state book value on the vehicle is $8,000, that person pays the taxes on the $8,000, not on what he or she paid for it. The difference in taxes would be $140 in that scenario.

The tax rate is currently lower for people, often with bad credit, who buy from used-car dealers who extend them credit. Those dealers have the potential to make good money off the interest. Under the measure, people who buy from such dealers would still pay taxes based on the book value of the car.

The new-car lobby says the bill would merely force used-car buyers to pay the tax under the same system that governs new-car buyers.



Reader Comments ...


Next Up in Georgia Politics

Handel cracks Georgia GOP ‘glass ceiling’
Handel cracks Georgia GOP ‘glass ceiling’

It might not have seemed that way, but the scene at a stuffed Roswell restaurant on the eve of last week’s runoff was a quietly remarkable one. It was the night before the 6th Congressional District vote, and Gov. Nathan Deal was campaigning for a former opponent his staff once described as a spout of “unhinged blather.” Sprinkled...
A new health care debate, Donald Trump, and a spike in breast cancer

Just in time for the renewed, fast-tempo debate over health care in Washington, public health researchers at Georgia State University have produced a pair of studies that help underline just what’s at stake. The more provocative of the two papers has intriguing national implications: In large swaths of the United States, swing areas that handed...
Georgians: Fix health care prices, stop partisanship
Georgians: Fix health care prices, stop partisanship

After the U.S. Senate finally revealed its proposed federal health care bill, advocates revved up their rhetoric with extreme positions, loud cheers and denunciations. “INJUSTICE!” blared the handmade sign of a protester Friday outside U.S. Sen. Johnny Isakson’s office. The Senate’s bill “is morally repugnant,” said...
Will Georgia’s 6th District do this all again in 2018?
Will Georgia’s 6th District do this all again in 2018?

Despite initial relief among Georgia’s 6th District residents that the barrage of campaign ads has come to an end, the reprieve might not last too long. “Now we know what New Hampshire looks like,” said Chip Lake, a GOP consultant based in Georgia. The question is, with 2018 just around the corner, will this year’s astronomical...
Trump signs law making it easier to fire bad VA employees
Trump signs law making it easier to fire bad VA employees

President Donald Trump signed a bill into law Friday that would expedite the process for top officials to fire problematic employees at the long-troubled U.S. Department of Veterans Affairs. The aim of the accountability legislation is to make it easier to root out the bad apples who have helped contribute to the cascade of scandals at the VA, harming...
More Stories