SALT Report 2236 – The Georgia Department of Revenue issued a bulletin to correct a statement in its Tax Guide for Motor Vehicle Dealers. Recently, the Department published the guide to provide guidance regarding the implementation of the new title ad valorem tax fee (TAVT).
The error occurs on page 13 of the dealer guide where the following question is addressed: “Are repairs covered under a manufacturer’s factory warranty subject to sales and use tax?” The Department answered the question by instructing dealers to collect sales tax on the vehicle parts used in repairs covered by a manufacturer’s factory warranty even if the vehicle had been subject to TAVT under O.C.G.A. § 48-5C-1.
After further review, the Department determined that this was an incorrect interpretation of the law. Therefore, that portion of the tax guide has been removed. The Department’s policy now reflects that sales and use tax is not due for parts used in repairs covered by a manufacturer’s factory warranty regardless of whether the vehicle was subject to sales tax or TAVT when it was sold.
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