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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.

Alabama Requirements: Register the vehicle (obtain a license plate) within 20 calendar days of acquisition; for a titled vehicle the title application must be completed before registration. 2% State automotive rate (plus local tax).

Seller Information

Buyer Information

Gift Details

Sale Information

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Gifting a vehicle to a family member is a zero-dollar transfer, but the DMV still needs a bill of sale to process the title change. Our guide explains how the bill of sale and title work together and what recipients must show to claim the family-gift tax exemption. Read: Bill of Sale vs Title: What's the Difference? →

Alabama Gift Bill of Sale — What You Need to Know

Primary Form
Application for Certificate of Title
Agency
Alabama Department of Revenue, Motor Vehicle Division
Primary ID Field
VIN
Sales Tax
0%
Title Required
Yes
The existing title must be signed over by the donor. Write "GIFT" on the consideration/purchase price line of the title. The recipient and the designated agent sign the title application, form MVT 5-1E.
Inspection
Not required

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

  1. 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.
  2. Sign the back of the existing title over to the recipient, entering "GIFT" as the purchase price on the title assignment.
  3. 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.
  4. Both donor and recipient bring valid government-issued photo ID to the county tag office.
  5. Submit the signed title and bill of sale, and pay the $15 title application fee plus agent fees, at the county license plate office.
  6. The recipient must register the vehicle and obtain new license plates in their name at the same visit.
  7. 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.

Alabama Gift Bill of Sale — FAQs

Do I need a notary to gift a car in Alabama?
No notarization is required for a standard in-person vehicle gift transfer at the county tag office. However, if either party cannot be present, a notarized power of attorney is required to authorize someone else to sign on their behalf.
Which family members qualify for the Alabama gift tax exemption?
Alabama's casual sales tax applies to vehicles bought from anyone who is not a licensed dealer, and the Department of Revenue sets any gift or family-transfer exemption. Ask the county licensing official which relationships qualify and what proof is needed before relying on an exemption.
What does the Alabama vehicle gift transfer cost?
The primary cost is the $15 title application fee, plus small agent fees and any county-level registration fees. If the gift qualifies for an exemption, no sales tax is due — confirm with the county office. A new license plate will also be required for the recipient.
Can the donor and recipient be in different counties?
Yes. The recipient files the title transfer at the county tag office in the county where they reside, regardless of where the donor lives. The donor simply needs to sign over the title beforehand.
What if the vehicle still has a lien on it?
A vehicle with an outstanding loan cannot be freely gifted until the lien is released. The donor must pay off the loan and obtain a lien release from the lender before the title can be signed over to the recipient.