Vehicle purchases are among the most prevalent sales in Georgia, which means they might result in a significant sales tax payment. This article discusses the most critical components of Georgia’s sales tax in relation to automobile purchases. The taxation of leases and rentals applies to cars that are rented or leased.
Georgia charges a 4% state sales tax on all automobile purchases. In addition, there is a 2–3% local tax. Aside from taxes, automobile purchases in Georgia may be subject to other expenses such as registration, title, and plate fees.
- Many dealerships will accept your old vehicle in exchange for a credit against the purchase price of a new one. For example, you may trade in your old automobile and obtain a $5,000 credit on the purchase price of a new vehicle worth $10,000, reducing your out-of-pocket expense to $5,000.
- Because the value of your trade-in is not subject to sales tax in Georgia, the taxable price of your new car will be $5,000. This means you’ll save the sales taxes you’d have paid on the $5,000 worth of your trade-in.
- To stimulate sales, many dealers give financial incentives or manufacturer rebates on the sticker price of a car. For example, if a $1,000 cash refund is provided on a $10,000 automobile, the buyer’s out-of-pocket expenditure is $9,000.
- Georgia taxes car purchases before rebates or incentives are applied to the price, thus the customer will pay taxes on the vehicle as if it cost the full $10,000.
The registration procedure consists of the following steps:
- Application for title or leasing agreement
- Identification and evidence of residence are required.
- Vehicle inspection and insurance