Georgia legislature reverses course on used car tax hikes

The Georgia Independent Auto Dealers Associations is reporting that the conference committee of the state’s Senate and General Assembly has gutted a controversial bill that would have raised millions of dollars on the backs of used car dealers and consumers. The original 26-page bill, HB340, included verbiage that essentially would have taxed used cars in the same manner as new cars are taxed – a 7 percent tax on the sales price.

Dealers balked at the bill because of a key phrase in the bill that allowed for a choice between the “bill of sale” value and the book value – “whichever is greater.” They asserted that the greater of the two would always be the bill of sale, which would have added hundreds of dollars to the final price of every used car sold.

Bills with that language cleared both houses of the Georgia legislature, but differences between the two required a conference committee to resolve them. In the week after the Senate passed its version, GIADA’s government affairs team worked long hours to convince legislators that the tax increase would hurt its dealers and Georgia consumers. In the end, the committee relented and put forth a substitute 1-page bill that gutted all language related to a tax increase. The only real change the bill made was in the way that lease vehicles are taxed, which will now be on “the total of the base payments pursuant to 14 the lease agreement.”

 

According to Paul John, Executive Director of GIADA, two of the organization’s board members – Lee Cavender and Billy Graham – put their businesses on hold to be at the capitol to meet with legislators about the bill. Their testimonials, he said, helped sway the opinions of lawmakers.

“You would be amazed to learn how many lawmakers in Georgia do not understand our business, or realize how critical used car dealers are to our economy,” John said in a letter to GIADA members. “Well, they do now, I promise you.”

The substitute bill from the conference committee cleared both houses of the Georgia legislature in votes on Friday, 151-5 in the General Assembly and 51-2 in the Senate.

(Sources: GIADA and www.ajc.com)

Let us know! How are used cars taxed in your state, and how do you think that impacts car sales where you are?

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