HB25 Alabama 2015 1st Special Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Ken Johnson
Republican
Session: First Special Session 2015
Title: Sales tax, motor vehicles, exemption when exported or removed from this state eliminated under certain conditions, Sec. 40-23-2 am'd.
Summary: HB25 changes the drive-out exemption for motor vehicle sales by tying it to the destination state's tax rules and requires publication of a list of noncompliant states and a specific revenue split.
What This Bill Does
If passed, such vehicle sales would be taxed by Alabama unless the state where the buyer will title or register the vehicle allows an Alabama resident to buy for first titling/registration in Alabama without paying tax to that state. The Department of Revenue must publish annually a list of states that do not allow drive-out exemptions, and taxpayers would be relieved from liability if that list is incorrect. The bill excludes certain vehicles (mobile homes, motor bikes, ATVs, boats) from the export exemption unless proof shows delivery outside Alabama, and it requires approved forms to document exempt sales; 58% of the tax revenue under the relevant provision goes to the Education Trust Fund and 42% to the State General Fund. It takes effect January 1, 2016.

Who It Affects
Alabama residents who buy motor vehicles that will be titled or registered outside Alabama or in Alabama, with tax treatment depending on the other state's exemption rules.
Vehicle dealers and the Alabama Department of Revenue, who must apply the tax rules, maintain documentation, publish the state list, and manage relief if a list is incorrect.

Key Provisions
Amends Section 40-23-2 to require Alabama automotive sales tax on drive-out vehicle sales unless the destination state's rules allow an Alabama resident to avoid paying tax there.
Requires the Alabama Department of Revenue to publish annually a list of states that do not allow drive-out provisions, starting January 1, 2016, and provides taxpayer relief if the list is incorrect.
Specifies exclusions to the export exemption, including that mobile homes, motor bikes, ATVs, and boats do not qualify unless proof of delivery outside Alabama is provided.
Requires documentation of exempt sales on Revenue Department forms.
Allocates 58% of the subdivision (4) tax revenue to the Education Trust Fund and 42% to the State General Fund.
Effective date: January 1, 2016.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Taxation