Yea, that’s what i’m thinking as well. I’m glad it’s overestimating rather than under, but if we could get it to be more accurate that would be great.
Georgia Sales Tax… Title Ad Valorem Tax (TAVT)
Sales Tax Rate x [(Adj. Cap – RV) + CCR + Taxable DAS]
Simplifying
Sales Tax Rate x [(Gross Cap – RV) + Taxable DAS]
Adj. Cap – RV = Depreciation as defined in 12 CFR § 1013.4 and lease agreements.
Note: Adj. and Gross Cap should exclude non-taxable capped fees. Also, GA offers the option of taxing the agreed-upon value for business leases only.
Are manufacturer rebates/incentives taxed in Georgia? I believe the answer is yes, but just want to confirm.
This part is throwing me off -
Depreciation Plus Any Amortized Amounts Method: The TAVT Base Value is the total of Depreciation Plus Any Amortized Amounts, including any down payments.
(“Down payments” means cash collected from the lessee at the inception of the lease, including (1) cash supplied as capital cost reduction and (2) any upfront payments by the lessee. Down payments shall not include (1) rebates, noncash credits, or net trade allowances, (2) taxes or fees imposed by law, and (3) monthly lease payments made in advance.)
They are not as far as i know
Interesting. So my tax calculation may be off by $1100 above then, as the Genesis I was using as an example has $17000 in manufacturer rebates.
That appears to be correct…
For a motor vehicle that is leased:
1. In the case of a motor vehicle that is leased to a lessee for use primarily in the lessee’s trade or business and for which the lease agreement contains a provision for the adjustment of the rental price as described in Code Section 40-3-60, the agreed upon value of the motor vehicle less any reduction for the trade-in value of another motor vehicle and any rebate;
2. In the case of a motor vehicle that is leased other than described in division (i) of this subparagraph, the total of the depreciation plus any amortized amounts pursuant to the lease agreement plus any down payments; and
3. The term “any down payments” as used in this subparagraph shall mean cash collected from the lessee at the inception of the lease which shall include cash supplied as a capital cost reduction; shall not include rebates, noncash credits, or net trade allowances; and shall include any upfront payments collected from the lessee at the inception of the lease except for taxes or fees imposed by law and monthly lease payments made in advance
My reading of this suggests that rebates used as a CCR are not taxable. I will also go out on a limb and claim that Costco and manufacturer loyalty incentives are not taxable.
There is also the statement suggesting that depreciation plus amortized amounts plus downpayments are taxable. Amortized amounts are the same thing as capitalized fees. Depreciation, as defined in Reg. M, is Adj cap - residual. The adj cap includes capped fees. Hence, depreciation includes capped fees. To say that depreciation plus amortized amounts plus down payment are taxed seems to suggest that capped amounts are taxed twice. It’s the depreciation plus down payment (CCR) that is subject to tax.
Georgia Sales Tax… Title Ad Valorem Tax (TAVT)
Sales Tax Rate x [(Adj. Cap – RV) + CCR + Taxable DAS]
Simplifying
Sales Tax Rate x [(Gross Cap – RV) + Taxable DAS]
Adj. Cap – RV = Depreciation as defined in 12 CFR § 1013.4 and lease agreements.
Note: Adj. and Gross Cap should exclude non-taxable capped fees.
Just wanted to bring this concern back up to the top - as it’s actually making it difficult on my side to use the calculator to compare dealer vs dealer offers, as many want to roll the taxes into the payment.
Any chance this could be rectified soon?
Don’t know. I’m not involved in LH calculator improvement efforts. You may want to contact @michael as he is one of the site’s owners.
In the meantime, I’m happy to perform any needed calculations.
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Hi @AtomicDutchOven ,
Putting this to our Calculator development pipeline. We will keep you posted!
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Thank you! I appreciate it!
Hi @littleviolette !
Just wanted to check in on the GA TAVT calculator updates. Any ETA? I’m using my own spreadsheet at the moment while I wait, but would love to have it added to the awesome calc!
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Hi,
I have some issues with GA TAVT on Lease. I haven’t been able to register my car now for over two months. County Tax office is calculating the TAVT on entire vehicle price and Dealership is doing so on Total Lease payment. I am really running out of patience and has no idea what is going to happen. So can anyone help me make it understand?
Both are wrong.
Per the GA Tax Code as it relates to tax on vehicle leases…
- In the case of a motor vehicle that is leased to a lessee for use primarily in the lessee’s trade or business and for which the lease agreement contains a provision for the adjustment of the rental price as described in Code Section 40-3-60, the agreed upon value of the motor vehicle less any reduction for the trade-in value of another motor vehicle and any rebate;
- In the case of a motor vehicle that is leased other than described in division (i) of this subparagraph , the total of the depreciation plus any amortized amounts pursuant to the lease agreement plus any down payments; and
- The term “any down payments” as used in this subparagraph shall mean cash collected from the lessee at the inception of the lease which shall include cash supplied as a capital cost reduction; shall not include rebates, noncash credits, or net trade allowances; and shall include any upfront payments collected from the lessee at the inception of the lease except for taxes or fees imposed by law and monthly lease payments made in advance
Accordingly, GA TAVT Tax is computed as follows…
S = Sell Price = 48972.00
R = Residual Value = 40946.25
M = Capitalized Fees (amortized amounts) except capped taxes = 0.00
C = Rebates/noncash credits/Net Trade Allowance = 4000.00
X = Taxable lease inception fees = 0.00
Sales Tax Rate = 7.00%
GA TAVT = Tax Rate x [(S – R) + M - C + X]
Replacing the variables with their assigned values, the GAVT = 281.80 unless the tax rate has changed.
Is the dealer an out of state dealer? They computed tax on the single pay…
7% x 5201.04 = 364.07 which is contrary to GA tax code for registered motor vehicles.
FYI-
GA Tax Form MV-7L - State and Local Title Ad Valorem Tax (TAVT) Fees for Leases - effective January 1, 2022.pdf (238.0 KB)
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Thank you so much for your explanation.
Yes the dealer is from Alabama. and they calculated $364.07
But the interesting this is County tax office is coming out with 3372+late fees.
Which is mind boggling. Even after my explanation showing my onetime payment proof they insist that the tax would be that much. They are saying they have never seen such numbers. So I don’t know what to tell the dealership or TAX office.
Also the dealer did provide the M-7L form but yet the tax office is adamant on full tax. They will be referring the issue to state tomorrow.
You may want to show the GA tax office the MV-7L form. What they’re doing is dead wrong. It’s a good bet that you’re dealing with incompetent people. Good luck and keep me posted.
I did give them the MV-7L form. but I think the Dealership used the $5201 number in there. Which is including the rental charge in there. Which they should not right?
Dealer is wrong and being out of state, it’s not surprising. They obviously aren’t familiar with how GA taxes are calculated and have no business doing the tax calculation.
You may want to contact the GA Dept. of Revenue as the tax office is wrong as well…
MV-7D State and Local Title Ad Valorem Tax (TAVT) Fees | Department of Revenue
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Ok I will get in touch with GA Dept of Rev and figure this out. thank you so much for your help.
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Hi,
Just talked to the GA Dept of Rev and then with the County Tax office, they acknowledged that they were calculating it wrong and thus they will do so on correct amount as you mentioned earlier. though I still have to pay some late fees as its been few months . Thank you so much for your help.
Really appreciate it.
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Glad to help. If you have further questions/concerns, let me know. Good luck!