Georgia replaced its old ad valorem tax with a new tax for vehicles purchased on or after March 1, 2013. This new tax is a one-time payment and replaces the sales and use tax and annual ad valorem tax that is based on the value of the car. To figure how much your ad valorem tax is going to add to the price of your car purchase, you need to know the value of the car as well as the tax rate, which is 6.75 percent as of 2014 and is scheduled to increase to 7 percent in 2015.
Calculate the fair market value of the car you're purchasing. For new cars, use the larger of the retail selling price -- which is the amount you paid for the car, including any dealer fees like delivery or freight charges, minus any rebates or cash discounts -- or the value listed in the Georgia motor vehicle assessment manual. For used cars, the fair market value is set by the motor vehicle assessment manual. This manual computes values based on current wholesale and retail values of the car. It is available online.
Reduce the fair market value by the value of your trade-in, if any, only if you are making the trade with a dealer. For example, say the value of your trade-in is $3,000 and the fair market value of the vehicle is $18,000. Subtract $3,000 from $18,000 to find that the tax will be applied to $15,000 of the purchase price. If you are making a trade with a private party, you aren't allowed to deduct the value of any trade.
Multiply the amount of your purchase price that the tax applies to by the current Georgia ad valorem tax rate to figure the tax due. As of 2014, the rate is 6.75 percent. So if the tax is levied on $15,000, multiply 0.0675 by $15,000 to find that the tax equals $1,012.50.