Did an active-duty service member owe Georgia use tax on a European vehicle imported under orders before the title ad valorem tax took effect?

Plain-English summary

The active-duty service member owed Georgia use tax when the vehicle entered the state in 2012. The vehicle had been bought and used in Europe, but no sales or use tax had been paid to another state, so no reciprocal credit was available.

Moving under military orders did not make Georgia the member's legal domicile; the member kept a non-Georgia home of record. The exemption for personal property brought into Georgia by someone becoming domiciled here therefore did not apply. Tax was calculated on the lower of the vehicle's actual cost or fair market value on its first Georgia entry date.

Common questions

Q: Did active-duty status create a blanket vehicle exemption?

A: No. The ruling imposed tax because the specific domicile exemption did not apply.

Q: Was tax based on the original purchase price in every case?

A: No. The measure was the lower of actual cost or fair market value when the vehicle entered Georgia.

Citations and references

• O.C.G.A. § 48-8-3(19) -- property brought by a new Georgia domiciliary
• O.C.G.A. § 48-8-42(a) -- reciprocal credit
• Ga. Comp. R. & Regs. r. 560-12-2-.40(2) -- military vehicle use-tax measure

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2013-14

Original ruling text

State of Georgia
Douglas J. MacGinnitie
Commissioner

Department of Revenue

Administrative Division – Office of Tax Policy
1800 Century Blvd., Suite 15107
Atlanta, Georgia 30345-3205
(404) 417- 6649

Frank M. O’Connell
Director

June 12, 2013

Georgia Letter Ruling SUT No. 2013-06-12-01 Motor Vehicle

This letter is in response to your request for guidance on the application of Georgia sales and use tax to a motor
vehicle imported into this state by a member of the military.
Facts
Taxpayer is an Active Duty United States Military Service Member currently stationed in Georgia. Taxpayer was
stationed in another country from 2009 until 2012. In 2012, under Official Orders, Taxpayer relocated to Georgia.
Taxpayer did not change his home of record to Georgia.
While stationed in another country, Taxpayer bought a vehicle. The vehicle was registered and legally operated in
Europe for over two years. In 2012, the vehicle was brought into Georgia as part of Taxpayer’s relocation to this
state. Taxpayer received temporary Georgia tags and was instructed to register and title the vehicle within 30 days.
Sales and use tax has never been paid on the vehicle to another state. Taxpayer now requests clarification as to
whether use tax is due on the motor vehicle.
Issue
Are military personnel exempt from the payment of Georgia use tax on motor vehicles brought into this state before
March 1, 2013, the date on which vehicles titled in Georgia became exempt from sales and use tax and subject to the
title ad valorem tax?
Analysis
Georgia levies and imposes a tax (subject to certain specific exemptions) on the retail purchase, retail sale, storage,
use, or consumption of tangible personal property and on certain enumerated services. 1 Use tax becomes due on the
Taxpayer’s motor vehicle at the time it was imported into this state.
Credit is granted for state sales or use tax legally imposed and previously paid in any state that grants credit for a
like tax paid in Georgia. 2 Thus, the credit for taxes paid to another state applies only to taxes paid before Georgia
state tax becomes due, and not to taxes paid later in destination states. 3 Based upon the facts provided, no sales tax
or use tax has been previously paid on the motor vehicle to another state. Thus, reciprocal credit cannot be granted.
1

O.C.G.A. §§ 48-8-1 and 48-8-30(a).
O.C.G.A. § 48-8-42(a); Ga. Comp. R. & Regs. r. 560-12-1-.32(1).
3
Georgia Policy Statement No. SUT 2011-05-25, 05/26/2011.
2

An Equal Opportunity Employer

June 12, 2013
Page 2 of 2

All tangible personal property purchased out of state by a person not domiciled in Georgia, but who later becomes
domiciled in Georgia, is exempt from tax when brought into the state for the first time, if the property is not used for
a trade or business. 4 In this case, the Taxpayer brought the motor vehicle into this state as the result of Official
Orders and did not change his home of record to Georgia, and therefore Georgia is not his legal domicile. Thus, the
motor vehicle is not exempt from Georgia use tax.
Use tax applies to the lesser of cost price or fair market value of automobiles brought into the state by military
personnel, although a credit is given for taxes imposed and paid to reciprocating states. 5 The use tax liability will be
calculated on the lesser of the actual cost price of the motor vehicle or the fair market value of the motor vehicle on
the date it was first brought into this state.
Ruling
The Taxpayer is liable for use tax on the motor vehicle brought into this state. However, the Taxpayer’s use tax
liability will be calculated on the lesser of the actual cost price of the motor vehicle or the fair market value of the
motor vehicle at the time the vehicle was first brought into this state.
The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, and taxpayer in question. Should the circumstances regarding the transactions change, or
differ materially from those represented, then this ruling may become invalid. In addition, please be advised that
subsequent statutory or administrative rule changes or judicial interpretations of the Statutes or Rules upon which
this advice is based may subject similar future transactions to a different tax treatment than that expressed in this
response.

4
5

O.C.G.A. § 48-8-3(19).
Ga. Comp. R. & Regs. r. 560-12-2-.40(2).