Free Alabama Gift Bill of Sale
Gifting a vehicle to an immediate family member in Alabama lets you transfer ownership completely tax-free — on a $20,000 car that saves the recipient roughly $800–$1,200 in state and local sales tax. You must complete form MVT 5-1 (Application for Certificate of Title) and write "GIFT" in the consideration field of the signed-over title. Alabama requires the new owner to complete the transfer within 15 days to avoid late fees.
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Alabama Gift Bill of Sale — What You Need to Know
Sales Tax Details
Alabama sales tax is waived for vehicle gifts between immediate family members. Write "GIFT" as the sale amount on the bill of sale to document the exemption.
Exemption: Immediate family members (parent, child, spouse, sibling) are exempt from Alabama sales tax on vehicle gifts
Inspection Requirements
Alabama does not require a safety or emissions inspection at the time of a vehicle title transfer.
Alabama Gift Sale — Step-by-Step Checklist
- Obtain and complete Alabama form MVT 5-1 (Application for Certificate of Title) — available from any county tag office or ADOR website.
- Sign the back of the existing title over to the recipient, entering "GIFT" as the purchase price on the title assignment.
- Prepare a bill of sale listing the donor's and recipient's full legal names, vehicle year/make/model/VIN, the date, and "GIFT" as the stated consideration.
- Both donor and recipient bring valid government-issued photo ID to the county tag office.
- Submit MVT 5-1, the signed title, bill of sale, and payment for the $18 title fee to the county probate or license office.
- The recipient must register the vehicle and obtain new license plates in their name at the same visit.
- Complete the transfer within 15 days of the gift date to avoid a $15 late transfer penalty.
Common Pitfalls
- Writing $1 or any nominal dollar amount instead of "GIFT" — Alabama auditors may treat a non-zero price as a taxable sale and assess back taxes and penalties.
- Missing the 15-day title transfer window — a $15 late fee applies and the vehicle remains legally in the donor's name, creating liability issues.
- Forgetting that only immediate family (parent, child, spouse, sibling) qualify for the gift tax exemption — cousins, aunts, uncles, or friends do not qualify and will owe sales tax.
- Failing to complete MVT 5-1 — a bill of sale alone is not sufficient to transfer title in Alabama.
- Not bringing valid photo ID for both parties to the tag office, causing the transaction to be rejected.
Pro Tip
Keeping paperwork complete and using the exact word "GIFT" on both the title and bill of sale is the most important step to protecting the recipient from an unexpected Alabama tax assessment down the road.