How is a car lease taxed in Georgia?

What this means for your lease

In plain English: a one-time title/ad-valorem tax is charged up front instead of sales tax on payments. Georgia's state-level lease tax rate is 7% (before any local add-on).

Cash you put down as a cap-cost reduction IS taxed in Georgia, so putting more cash down does not escape the tax. A qualifying rebate applied as a cap-cost reduction and positive equity from a qualifying trade-in are not taxed.

The detail

Georgia uses the Title Ad Valorem Tax (TAVT) instead of sales/use tax on vehicle leases. The rate is 7.0% for vehicles purchased or leased on or after July 1, 2023; a temporary 6.6% rate applied from January 1, 2020 through June 30, 2023 (DOR Policy Bulletin MVD-2023-02). For a consumer lease, the TAVT base is the total depreciation plus any amortized amounts under the lease plus any down payments (Ga. Comp. R. & Regs. 560-11-14-.01), not the full vehicle FMV; the rent charge is not part of the base. Down payments include cash used as a cap-cost reduction but not rebates, noncash credits or net trade allowances, and DOR subtracts any trade-in value and rebate when setting the taxable value, so neither a rebate applied to the lease nor trade-in equity is taxed. TAVT is a one-time tax paid when the vehicle is titled, and lease payments on a TAVT-titled vehicle leased for more than 31 days are exempt from state and local sales and use tax. For a Georgia consumer lease, LeaseWorth estimates TAVT as 7% of the depreciation and any amortized amounts on your lease disclosure (adjusted capitalized cost minus residual), plus the cash you put down and any other dealer charges you pay at signing; the rent charge, rebates, trade-in equity, government title and registration fees and your first monthly payment are not taxed.

Local add-ons

TAVT is a single statewide rate (7.0% as of 2026); no separate local sales tax applies to the leased vehicle. TAVT replaced both sales tax and annual ad valorem (birthday) tax.