Free Alabama Bill of Sale Template & Generator

Alabama Bill of Sale Requirements

Additional Forms Required in Alabama

• Title application — processed by a Designated Agent (county license plate issuing official, licensed dealer, or Alabama bank/credit union)

In Alabama the bill of sale is required in some situations, not in every sale. For a vehicle not covered by the state's title law it is the ownership document, and the Alabama Department of Revenue sets minimum contents under Rule 810-5-1-.246 — names and addresses of both parties, sale date, price, and vehicle identification details. For a titled vehicle it is one way to prove the price for the casual sales tax. Neither the bill of sale nor the title assignment needs to be notarized.

Two Alabama-specific numbers catch private buyers off guard. First, the registration clock is 20 calendar days — shorter than the 30-day window many states allow. Alabama law requires anyone acquiring a new or used vehicle to obtain a license plate within 20 calendar days of acquisition, and registering late adds a $15 penalty plus interest. Second, the state sales tax on vehicles is 2%, not the general 4% rate — Alabama taxes automotive sales at a reduced state rate, with county and city automotive rates added on top. On a private-party sale the casual sales tax is collected by the licensing official before the vehicle is registered. The proof of price is a sworn purchaser report with a bill of sale or other satisfactory evidence — or the buyer can accept the Department of Revenue's standard value for the vehicle instead.

Alabama also runs titling differently from most states: applications go through a Designated Agent rather than a central DMV counter. Designated Agents include county license plate issuing officials, licensed Alabama motor vehicle dealers, and Alabama banks and credit unions. The title application fee is $15 plus a $1.50 agent commission, and the licensing official is required to inspect the vehicle before issuing a registration — bring the vehicle, not just the paperwork.

The titling rules have an age cutoff worth knowing: vehicles more than 35 model years old are exempt from Alabama title requirements under Section 32-8-31, as are utility trailers, boats, and boat trailers. For those vehicles, the bill of sale and prior registration documents carry the ownership history, which makes a complete, signed bill of sale the single most important document in the sale of a classic car or an older fishing boat in Alabama.

At registration, the county office verifies liability insurance electronically through the state's Online Insurance Verification System (OIVS), so the buyer needs an active Alabama policy before the visit. The seller keeps the license plate — plates follow the person in Alabama, not the vehicle — and can usually transfer it to their next vehicle at the same county office.