The state of Georgia changed its ad valorem tax law. Bought a used car in 2016 and dealer collected $976.50 in ad valorem tax. Can this be deducted? If so, where?

[DDollar · Accepted solution]

No, it is not deductible  For vehicles purchased in (or transferred to) Georgia in 2012 and after, there is a title tax.  It is assessed at the time of purchase on a one time basis.  According to the IRS "Deductible personal property taxes are those based only on the value of personal property such as a boat or car. The tax must be charged to you on a yearly basis, even if it's collected more than once a year or less than once a year."   Therefore, it is not deductible as a state or local property tax.

If a vehicle is used for business, the title tax should be added to the cost basis like a sales tax. 

 For vehicles purchased in (or transferred to) Georgia  prior to 2012 there is still an ad valorem tax assessed annually and based on the value of the vehicle.  This ad valorem tax is deductible each year.

[gwassel]

Must be nice for the state of Georgia to get all of the money up front rather than annually and then not allow a tax deduction any more.  Crooks

[scfarrar]

Agreed - paid over $13,000 in TAVT on two cars and the title ad valorem tax (yes, that last word is "tax") is not deductible? How does that make any sense...the state is imposing a tax on my personal property and forcing me to transfer funds to a government entity but it's not a tax. The people of GA should be smarter and not vote in people who impose unfair tax laws.

[GApeach]

It's even worse when you just paid sales tax on a late-model car to another state, then moved to GA within the year and had to pay sales tax all over again! (TAVT tax basically equals the sales tax)