Free Alabama Gift Bill of Sale
Gifting a vehicle to a family member in Alabama may avoid the casual sales tax if the gift qualifies for an exemption — confirm with the county licensing official before counting on it. You must complete form MVT 5-1E (Application for Certificate of Title) and write "GIFT" in the consideration field of the signed-over title. Alabama requires the new owner to register the vehicle — with the title application done first — within 20 calendar days to avoid a late penalty.
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Alabama Gift Bill of Sale — What You Need to Know
Sales Tax Details
Whether a vehicle gift owes Alabama's casual sales tax depends on Department of Revenue rules for gifts and family transfers — confirm with the county licensing official. Write "GIFT" as the sale amount on the bill of sale to document the transfer.
Exemption: Some family gifts may be exempt from Alabama's casual sales tax — confirm with the county licensing official
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
- Complete Alabama form MVT 5-1E (Application for Certificate of Title) with the county tag office — the office prepares it through the state title system.
- 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 the signed title and bill of sale, and pay the $15 title application fee plus agent fees, at the county license plate office.
- The recipient must register the vehicle and obtain new license plates in their name at the same visit.
- Complete the title application and registration within 20 calendar days of the gift date to avoid the $15 late penalty.
Common Pitfalls
- Writing $1 or any nominal dollar amount instead of "GIFT" — a non-zero price reads as a sale, not a gift.
- Missing the 20-day registration window — a $15 late penalty applies and the vehicle remains legally in the donor's name, creating liability issues.
- Assuming every gift is tax-free — confirm with the county licensing official which gifts or family transfers (if any) qualify before relying on an exemption.
- Failing to complete MVT 5-1E — 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.