How does Georgia's transportation local-option tax (TSPLOST) apply to a leasing company's motor-vehicle leases, including vehicles that move between counties or leases covering assets in several counties?

Plain-English summary

An equipment-leasing company that sometimes leases titled motor vehicles asked how the TSPLOST — the 1% transportation special-purpose local-option sales and use tax adopted in certain Georgia counties — applies to its vehicle leases, especially when vehicles or leased assets sit in different counties.

The Department first flagged an important threshold. Vehicles titled in Georgia on or after March 1, 2013 pay the title ad valorem tax (TAVT) and are then exempt from sales and use tax — including TSPLOST — on lease payments for leases longer than 31 days. So the TSPLOST guidance here applies only to leases/rentals still subject to sales tax: vehicles on which TAVT was not due or not paid, and short-term rentals of 31 days or fewer.

For those still-taxable leases, the rules are:

• $5,000 cap, collected per payment. TSPLOST applies only to the first $5,000 of lease payments per vehicle, and it is collected on each lease payment (not all at once up front). Down payments (capitalized cost reductions) and end-of-term payments count toward the $5,000.
• Follow the vehicle's "primary location" each period. Each periodic lease payment is sourced to the vehicle's primary property location (the address in the lessor's records). TSPLOST is due while the vehicle is primarily in a TSPLOST county; it stops if the vehicle moves to a non-TSPLOST county; and it switches to the new county's rate if the vehicle moves to a different TSPLOST county.
• Allocate mixed-county leases. When one lease covers assets in different counties, each payment is split: only the portion tied to assets in TSPLOST counties is taxed (a) at all, and (b) at each specific county's rate when several TSPLOST counties are involved.

What this means for you

Leasing companies and vehicle lessors

Do not assume TSPLOST applies to every vehicle lease. If TAVT was paid on the vehicle (titled on/after March 1, 2013) and the lease exceeds 31 days, the lease is exempt from sales tax and TSPLOST. Where TSPLOST does apply, collect it on each payment up to $5,000 per vehicle, and track each vehicle's primary-location county over the life of the lease, because the tax turns on where the vehicle is based that period.

Fleet operators and multi-county leases

If a single lease covers assets based in different counties, the tax follows each asset's location — you allocate each payment and apply each TSPLOST county's own rate to its share. Moving a vehicle between counties changes the TSPLOST treatment going forward, not retroactively.

Accountants and tax professionals

The two moving parts are the TAVT exemption (O.C.G.A. § 48-5C-1; § 48-8-3(95)) and lease sourcing to the primary property location (O.C.G.A. § 48-8-77(b)), plus the $5,000 motor-vehicle cap in O.C.G.A. § 48-8-241(d) and the credit for TSPLOST paid in another district (§ 48-8-252). Confirm the TAVT status first; it determines whether any of the TSPLOST mechanics even apply.

Common questions

Q: Does TSPLOST apply to all motor-vehicle leases?
A: No. It applies only where the lease is still subject to sales tax — vehicles on which TAVT was not due or not paid, and short-term rentals of 31 days or fewer. Vehicles that paid TAVT (titled on/after March 1, 2013) are exempt from sales tax and TSPLOST on leases longer than 31 days.

Q: How much of the lease is subject to TSPLOST?
A: Only the first $5,000 of lease payments per vehicle, and it is collected on each lease payment rather than all at once. Down payments and end-of-term payments count toward the $5,000.

Q: What happens if the vehicle moves counties?
A: TSPLOST follows the vehicle's primary-location county each period — due in a TSPLOST county, not due in a non-TSPLOST county, and at the new county's rate if it moves to a different TSPLOST county.

Q: How is a lease covering assets in several counties handled?
A: Each payment is allocated. Only the portion attributable to assets in TSPLOST counties is taxed, and where multiple TSPLOST counties are involved, each portion is taxed at its own county's rate.

Q: Can another leasing company rely on this ruling?
A: No. It is binding on the Department only for the taxpayer and facts presented, and no other taxpayer may rely on it. Motor-vehicle tax rules also change over time, so verify current law.

Citations and references

Statutes and rules:

• O.C.G.A. §§ 48-8-1, 48-8-30(a), (d) (imposition and collection of sales and use tax)
• O.C.G.A. § 48-8-241 (Transportation Investment Act; special-district TSPLOST; $5,000 motor-vehicle cap at (d))
• O.C.G.A. § 48-8-77(b) (sourcing of leases and rentals to the primary property location)
• O.C.G.A. § 48-8-252 (credit for TSPLOST paid in another special district)
• O.C.G.A. § 48-5C-1 (title ad valorem tax); O.C.G.A. § 48-8-3(95) (exemption for TAVT vehicles; short-term rental sales tax)
• Ga. Comp. R. & Regs. r. 560-12-1-.21 (leases and rentals)

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2015-23

Original ruling text

Georgia Letter Ruling: LR SUT-2015-23
Dated: December 16, 2015
Topic: Motor Vehicle
This letter is in response to your request for guidance on the application of the transportation special purpose local
option sales and use tax to certain lease transactions.
Facts
[Redacted] (“Taxpayer”) is an equipment leasing company, primarily leasing equipment to customers in the United
States. Taxpayer also occasionally leases titled motor vehicles. Taxpayer hopes to gain a better understanding of the
transportation special purpose local option sales and use tax (“TSPLOST”) and how it applies to leases of motor vehicles.
Due to certain system disadvantages, Taxpayer requests help in determining how to properly collect and remit TSPLOST
on certain leases.
Issues
1.

How does the TSPLOST apply to Taxpayer’s motor vehicle leases?

2.

How does the TSPLOST apply in the following situations?:
a.

Assets in a lease transaction are located in both a TSPLOST county and a non-TSPLOST county.

b.

Assets in a lease transaction are located in multiple different TSPLOST counties.

Analysis
Georgia levies and imposes a tax (subject to certain specific exemptions) on the retail purchase, retail sale, rental,
storage, use, or consumption of tangible personal property and on certain enumerated services.1 "Retail sale" means
a sale to any person for any purpose other than for resale. 2 Generally, rentals and leases of tangible personal property
are subject to sales tax3, and the lessor must collect the tax from the lessee on the rental price.4
TSPLOST
The Transportation Investment Act of 2010 created 12 special districts for purposes of imposing, subject to voter
approval, a 1% special district transportation sales and use tax.5 Effective January 1, 2013, voters in certain counties
approved imposition of the TSPLOST.6 Sellers must collect the TSPLOST, in addition to all other sales taxes, and
remit the tax to the Georgia Department of Revenue. 7 The TSPLOST is only imposed on the first $5,000 of any
transaction involving the sale or lease of a motor vehicle.8 Except as discussed otherwise below, the TSPLOST is
imposed on the first $5,000 of lease payments made for each motor vehicle leased, even if multiple vehicles are
under one lease with one lease payment.

1

O.C.G.A. §§ 48-8-1, -30(a).
O.C.G.A. § 48-8-2(31).
3
O.C.G.A. §§ 48-8-2(33), -30(a).
4
O.C.G.A. §§ 48-8-2(8)(C)-(D), -30(d); Ga. Comp. R. & Regs. 560-12-1-.21.
5
O.C.G.A. § 48-8-241(a)-(b). These districts correspond with the 12 regional commissions provided for in O.C.G.A.
§ 50-8-4. O.C.G.A. § 48-8-241(a).
6
The counties in which the TSPLOST was approved are Appling; Bleckley; Burke; Candler; Chattahoochee; Clay;
Columbia; Crisp; Dodge; Dooly; Emanuel; Evans; Glascock; Hancock; Harris; Jeff Davis; Jefferson; Jenkins;
Johnson; Laurens; Lincoln; Macon; Marion; McDuffie; Montgomery; Muscogee; Quitman; Randolph; Richmond;
Schley; Stewart; Sumter; Talbot; Taliaferro; Tattnall; Taylor; Telfair; Toombs; Treutlen; Warren; Washington;
Wayne; Webster; Wheeler; Wilcox; and Wilkes.
7
O.C.G.A. § 48-8-30(d).
8
O.C.G.A. § 48-8-241(d).
2

Georgia Letter Ruling: LR SUT-2015-23
Dated: December 16, 2015
Topic: Motor Vehicle
Page 2 of 3

Where the TSPLOST has been paid with respect to certain tangible personal property, a credit may be allowed
against the same tax due in another special district or jurisdiction upon the same property. 9 If the amount of sales or
use tax so paid is less than the amount of the tax due, the purchaser pays the difference.10 Leases or rentals of motor
vehicles, trailers, semitrailers, or aircraft that do not qualify as transportation equipment are sourced as follows:
For a lease or rental that requires recurring periodic payments, each periodic payment is sourced
to the primary property location. The primary property location shall be as indicated by an
address for the property provided by the lessee that is available to the lessor from its records
maintained in the ordinary course of business, when use of this address does not constitute bad
faith. This location shall not be altered by intermittent use at different locations.11
For leases or rentals of other tangible personal property12, periodic payments are sourced in the same manner except
that the first periodic payment is sourced as a retail sale. 13
TAVT
Motor vehicles titled in Georgia on or after March 1, 2013 are subject to title ad valorem tax (“TAVT”). Effective
March 1, 201314, sales and use taxes, including the TSPLOST, and the annual ad valorem tax (the birthday tax) are
no longer imposed on motor vehicles titled in Georgia on or after March 1, 2013 and upon which TAVT has been
paid.15 Lease payments for leases longer than 31 consecutive days of motor vehicles on which TAVT has been paid
are exempt from the full sales and use tax, including the TSPLOST. 16
Motor Vehicle Leases
The following guidance applies to (1) lease payments made on or after January 1, 2013 for leases of motor vehicles
on which TAVT was not due or has not been paid and (2) rentals of motor vehicles for a period of 31 or fewer
consecutive days:
When a motor vehicle with a primary location in a TSPLOST county is leased, the TSPLOST must be collected on
lease payments made beginning January 1, 2013, even when the lease began prior to January 1, 2013. The
TSPLOST must be collected on each monthly lease payment in the same manner as and in addition to any other
sales and use tax, up to the $5,000 limitation. The TSPLOST is not collected in full up front but is instead collected
on each lease payment.
When a motor vehicle with a primary location in a non-TSPLOST county is leased and the lessee then moves the
vehicle’s primary location to a TSPLOST county, the TSPLOST must be collected on each lease payment made
during the time the vehicle is in a TSPLOST county, up to the $5,000 limitation.
When a motor vehicle with a primary location in a TSPLOST county is leased and the lessee then moves the
vehicle’s primary location to a non-TSPLOST county, the TSPLOST will no longer be due on lease payments made
during the time the vehicle is in a non-TSPLOST county.

9

O.C.G.A. § 48-8-252.
Id.
11
O.C.G.A. § 48-8-77(b)(3)(A).
12
Other than transportation equipment.
13
O.C.G.A. § 48-8-77(b)(2)(A).
14
Although the law exempting motor vehicle purchases and leases from the TSPLOST was signed by the Governor
on March 5, 2013, the Department has interpreted the exemption to be retroactive to March 1, 2013.
15
O.C.G.A. §§ 48-5C-1(b)(1)(A), -8-3(95).
16
O.C.G.A. §§ 48-5B-1(b)(1)(A), -5-441.1, -8-3(95). Sales tax still applies to rentals of motor vehicles for periods
of 31 or fewer consecutive days. O.C.G.A. § 48-8-3(95). Specific TAVT requirements apply to these motor vehicle
rentals. O.C.G.A. § 48-5C-1(d)(11)(A).
10

Georgia Letter Ruling: LR SUT-2015-23
Dated: December 16, 2015
Topic: Motor Vehicle
Page 3 of 3

When a motor vehicle with a primary location in one TSPLOST county is leased and the lessee then moves the
vehicle’s primary location to a different TSPLOST county, the TSPLOST will be collected for the new TSPLOST
county.
All lease payments, including capitalized cost reduction (down payment) and end-of-term lease payments, are
subject to TSPLOST and are counted toward the $5,000 limitation.
Rulings
1.

For motor vehicles on which TAVT was not yet due or has not been paid, the TSPLOST is due on the lease
payments for leases of motor vehicles with a primary location in a TSPLOST county. The TSPLOST applies to the
first $5,000 of lease payments for each motor vehicle leased.

2.

When a lease payment covers multiple assets included in a lease transaction, the TSPLOST applies as follows:
a.

When assets in a single lease transaction have primary property locations in both TSPLOST and non-TSPLOST
counties, the portion of each lease payment attributable to the assets in the TSPLOST counties is subject to the
TSPLOST.

b.

When assets in a single lease transaction have primary property locations in multiple different TSPLOST
counties, the portion of the lease payment attributable to each particular TSPLOST county will be subject to the
TSPLOST at the rate of that county.

As noted above, these rulings are only applicable to motor vehicle leases and rentals that are still subject to
sales tax.
The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, circumstances, and taxpayer in question. Should the circumstances regarding the
transactions change or differ materially from those represented, this ruling may become invalid. Subsequent
statutory or administrative rule changes or judicial interpretations of the statutes or rules upon which this ruling is
based may subject similar future transactions to different tax treatment than expressed in this ruling.