Georgia Law Simplifies IRP Registration for Trucks and Tractors

TRALA-supported legislation in Georgia that will end the system of annual local ad valorem tax payments for IRP-registered trucks and tractors was signed into law by Governor Nathan Deal (R) late last week. HB 463 will replace the local ad valorem system with a system where an annual ad valorem tax is paid as part of the truck's registration fee, and the ad valorem piece will be automatically and properly apportioned. TRALA members will see a slight increase in vehicle registration fees because the ad valorem payments will now be incorporated, but in turn the local ad valorem system will be eliminated for IRP trucks and tractors. This move is expected to greatly simplify Georgia's difficult and lengthy process for getting IRP-plated trucks and tractors properly registered, and it will make Georgia a friendly state to the trucking industry. The new law will be effective January 1, 2014.

Trailers will continue to be registered at the county level, but will have an important new protection. If a county tax collector refuses to provide proper apportionment of ad valorem taxes, trailer owners will be able to pay the proper amount to the Department of Revenue directly and receive tags from the Department. HB 463 also contains a provision to streamline the appeals process for used vehicles that have been over-valued in DOR manuals.
The passage of HB 463 follows the passage of TRALA-sought legislation (HB 266) to correct a problem of double taxation on rented and leased vehicles in Georgia. The double taxation was created when legislation was passed in the 2012 legislative session that was meant to phase out both the sales tax and local ad valorem property tax and replace it with a one-time titling fee to be collected at the time a vehicle was put into service.  For some reason, the law passed in 2012 stated that rented and leased vehicles would be subject to the new Titling Ad Valorem Tax (TAVT) and would still be subject to sales tax payments on the rental and lease stream. This created an inequity in the marketplace because rented and leased vehicles were subject to both the TAVT and the sales tax, but vehicles that were purchased were only subject to the new TAVT.  Multiple TRALA members estimated that the 2012 law would have cost nearly 30% more in Georgia-based taxes per vehicle annually if left unchanged, essentially raising taxes on TRALA members by tens of millions of dollars.
HB 266 kept all International Registration Plan (IRP) vehicles in the "old" system, meaning renting and leasing companies will need to continue to pay local ad valorem and sales taxes in the same manner they always have -- until HB 463 becomes effective on January 1, 2014. For non-IRP vehicles under lease agreements, leasing companies would pay the one-time 6.5% TAVT but would not have to collect any sales tax on the lease stream.  
TRALA thanks Georgia Motor Trucking Association (GMTA) President and CEO Ed Crowell for his leadership and coordination on these important issues throughout the 2013 legislative session. Click here to see a copy of HB 463. If you have any questions about this issue please contact Joe Sculley at or by calling 703-299-9120.