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Tag Tax Revamp: How it works
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House Bill 315, which passed this year and goes into effect March 1, 2013, does away with the current motor vehicle sales tax (which currently ranges from 6-8 percent depending on the county) and the annual ad valorem tax or "birthday tax" (based on the market value of your car and the local millage rate) and replaces them with a single title fee that is charged whenever a car is registered in the state.

- The one-time title fee will start at 6.5 percent in March 2013, go up to 6.75 percent in January 2014, and end at 7 percent in January 2015.

- The title fee would apply to new car purchases, but by 2023 all car owners will be taken off the annual property tax system.

- If you buy a car between Jan 1, 2012 and Feb 28, 2013, you can opt out of the ad valorem tax starting March 1, 2013. If the sales tax and ad valorem tax paid before March 1, 2013 are equal to or greater than the 6.5 title fee, then nothing more is required and you will no longer have to pay the ad valorem tax.

- The title tax will apply to casual sales and title transfers between individuals, unless between immediate family members, as well as out of state auto purchases.

The budget policy institute estimates this will be the big revenue generator for the state, bringing in $503 million during the next three budget years and helping to offset many of the tax breaks included in the bill.

While the bill will bring in money to the state, it is likely to greatly reduce revenue earned by local counties over time. Since the 7 percent sales tax and 7 percent title fee essentially cancel each other out, residents are saving money by not having to pay annual taxes on their car.

The state captures only a very small portion of that annual ad valorem, or property, tax; however, local governments depend on property taxes for much of their revenue.

Rockdale received about $7.7 million from motor vehicle taxes in 2011 with 66,345 cars on the digest, according to Tax Commissioner Dan Ray. Motor vehicles make up 7.75 percent of the digest revenue for the county and 8.03 percent of the digest revenue for the schools.