Georgia lawmakers are being urged by the American Financial Services Association and the National Vehicle Leasing Association to reexamine legal changes in regard to financing companies paying taxes on leased cars.
A joint letter to the Georgia Department of Revenue Office of Tax Policy raised concerns among officials about a specific law that requires finance companies that offer vehicle leases to pay monthly sales taxes on lease payments plus an initial Title Ad Valorem Tax (TAVT).
Other trade associations approached AFSA about the tax issue on behalf of the leasing industry, and AFSA sought input from those groups, and invited them to cosign the letter, which NVLA eventually did. The letter implies that the law signed April 19 would result in higher costs on leasing a car versus buying one, which would hinder both the leasing marketplace and consumers who may benefit from leasing.
Due to the regular change in ownership, the letter stated that deterring leasing could have a negative impact on Georgia’s tax revenue generation. AFSA and NVLA suggested that the state exempt leases from TAVT, continuing to hold them accountable for sales and use tax, or adopt a tax purchase model in which TAVT is paid when a vehicle changes hands, sans additional monthly fees. Both recommendations would keep the cost of a purchase or lease agreement for a finance company about the same.
Click here to read the AFSA-NVLA letter.
