Leasing Loaner in ATL: Tax on Fair Market Value, or just lease payments?

Hi Atlanta,

My understanding was that on a car which was previously registered (ie a loaner), tax would be due on the fair market value of the car.

Is this (still) true?

My 1st hand experience in a related situation was attempting to transfer a lease from someone, only to find out tax was due on fair market value (not just on remaining payments).

This was ~ 6 months ago.

This situation seems analogous to leasing a loaner, right?

Has anything changed since then?

A dealer is stating tax on leasing a loaner would be same as on new car

Going to email the DMV, but figured I’d see if anyone else has any info/ experience.

Thanks

In Georgia, you will pay tax on the full sales price if it is a loaner. Thus, loaners do not make sense in the Peach State

Is this updated for the change in the Georgia tax law? Starting January 1, 2018, taxes are only on the sum of the lease payments, not the total value of the car: Georgia TAVT Calculation

I know I am in negotiations with a dealership in TN for a loaner and the taxes they quoted look to be based on the lease payments, not the total value.

I’m nearly certain I had read it on here in the past couple of months

I guess I’ll find out on Saturday when I go to sign. If it doesn’t get funded, we’ll know why.

Only difference between a lease transfer and loaner would be because it is still sold from dealership?

In the site I linked, it does mention:

Please note - the calculation of TAVT for all used vehicles (whether leased or purchased) and for new vehicles that are purchased will not change.

I guess then if a loaner is considered used, then it would be taxed under the old method? Does a car get marked as “used” as soon as it is moved into loaner status?

I guess that is why it remains the same. Loaners are technically used

Talked with the dealership. He said while they discount the cars as if they are used, the way BMW does the titling, the car is still titled as New, so it avoids that tax issue.

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Perhaps this is the key difference

A data point on this would be huge

@D-train is gonna go through with something similar to this (moving from CA to GA), so this info will be helpful for him too. Or he can report back what he goes through if no one gets an answer first.

sadly, you will have to pay tax on the full sales price if it is a loaner. I myself leased a loaner last year (March, 2018) and had to pay tax on the full prices. Deal was that good for me to go for it, but yea. It really doesn’t make sense in Georgia. I confirmed with DMV and everything. But, I think some BMW loaners are never titled(rare), and in this case, theoretically, you will only have to pay tax just on lease payment.

Interesting. We’ll see what happens on Saturday then. Dealer confirmed the way they titled it means it should be new. I’ll walk or expect an offsetting discount to MSRP if they don’t, but maybe because they know I’m driving from Atlanta, I’d be less likely to?

When would one find out what the deal is…is it at the time of picking up the car?

Or is it after you bring it home youd get a surprise later from the DMV?

My impression is that it is different for new cars, used cars, and new residents. I have the same question about leasing a loaner. Here is the online calculator https://onlinemvd.dor.ga.gov/Tap/Option1.aspx#message. I haven’t ready anything about taxing the full sales price. I have read taxing the fair market value. Way different… Seems like a lease is a lease regardless of new or used. We don’t OWN the vehicles, why should we pay tax on the full price. Please, keep us updated!

It might also be different for me when I move to GA and transfer my registration than someone purchasing in GA.

Did you get the loaner directly from the dealer?

Or was it a lease transfer from someone else?

(hoping to find a technicality of why you had to pay tax on fair value of entire car)

I got my loaner directly from a dealer in California. I am moving to Atlanta next month and couldn’t get an answer on the taxes I will pay when I register the car in GA. If you could ask the tax collector for me that would be great!! I think this is done at the tax office / tag office not the DMV, but I am probably wrong.

Yea, I would think it is done at the Tag / Tax Office when you register and change plates. However, no idea on what the basis will be for the tax. How much longer on the lease? Any appetite to risk not changing registration to avoid the issue?

@Dealhackr in talked with the dealership, they handle the registration/taxes and everything, so I think they pay the tax bill on my behalf. If they didn’t collect enough from me on the front end, not sure what their recourse is on the back end.

hot off the press from another dealer

“As of July 1st you only pay the taxes on the usage, not FMV, on loaners. It has to be under 7K miles and you still adjust the residual on the current mileage”

I’m gonna contact DMV & Tax/Tag office to see what the deal is

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Picked up a 3 series from ATL area. They did the registration. They messed up the calculation, but still honored it to me after couple hrs of back and forth. I also crossed shop with a c-class and had the same problem. It was right after the new law so even dealers were confused. I moved while waiting for the physical tag to be shipped so it got little complicated and I had to make drive down to tag office couple of times. Got to know the ladies there pretty well and they explained to me how ridiculous it is lol If you are moving to GA from out of state, my understanding is that you are require to pay tax on fair market price of the car. It is ridiculous, but yea :frowning: better to just swap the lease or keep your cali tag somehow? I don’t know about the new rule though. Maybe it is changed since the beginning of this month? Sorry, two babies are crying their lungs out right next to me so I’m not all here, but hopefully I’m being helpful here

I just moved to ATL, planning on getting a loaner tomorrow. Will update with the results