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Will a New Law Make Your Next Car Cheaper? Theatre
Thinking about buying a new car this year? Then you’re in luck! Thanks to a new Georgia law that went into effect on Jan. 1, 2020, you’ll be saving some money on that next big purchase.
Get to Know Law SB 65
In 2019, Law SB 65, also known as “Title Ad Valorem Tax: Used Cars and Tax Rate,” was approved by the Georgia General Assembly. This new law amended the Georgia tax code and reduced how much Georgians would spend on sales tax when buying a new car, from 7% down to 6.6%. While a 0.4% change doesn’t sound like much, it’s the equivalent of a $100 discount on a $25,000 car purchase!
What if I want to buy a used car?
Not everyone is singing the praises of SB 65. This new law is expected to raise the cost of taxes for people purchasing used cars. In the past, used cars were taxed based on their book value and not the actual sales price. SB 65 changed this so now the sales tax on used cars must be calculated based on the retail sales price. Because the retail price of used cards tends to be higher than their book value, the sales tax will likely be higher than before.
There are exceptions to this. If you’re buying a car person-to-person and not through a dealership — like buying a used car from Craigslist, for example — then it will be taxed at the lower book value.
If you’re in the market for your next car, keep in mind how you can use SB 65 to your advantage. If you want to save on the sales tax, look into the benefits of a new car or a used car purchased person-to-person.