HB267 Alabama 2015 Session

Summary

Primary Sponsor

Steve ClouseRepresentative

Republican

Session

Regular Session 2015

Title

Motor vehicles, add'l rental tax, Sec. 40-12-222 am'd.

Summary

HB267 would raise Alabama's motor vehicle rental tax to 4% for most leases, while keeping a lower 1.5% rate for motor vehicles and trailers.

What This Bill Does

It changes Section 40-12-222 to set a 4% tax on gross proceeds from leasing or renting tangible property, with a 1.5% rate preserved for automotive vehicles, truck trailers, semitrailers, and house trailers. Lessors may pass the tax on to lessees and must include any passed-on amount in the lease’s gross proceeds. The bill also creates an exemption for leases to the State or local governments, and sets linens and garments leases at a 2% tax. It takes effect September 1, 2015, and the law is severable with conflicting laws repealed.

Who It Affects

• Lessor businesses in Alabama that lease or rent tangible personal property would face a higher overall tax (4% generally) and may pass these taxes to lessees.
• Lessees who rent tangible property would see higher charges on most rentals, though leases of linens and garments would be taxed at 2%; government leases are exempt.

Key Provisions

• Tax base and rates: 4% of gross proceeds for most property, with a 1.5% rate for automotive vehicles, truck trailers, semitrailers, and house trailers.
• Pass-through to lessees: lessors can include the tax in the leasing price; such amounts must be counted in gross proceeds for tax owed.
• Exemptions: leases to the State, a municipality, or a county (or public corporation) are not taxed; linens and garments leases are taxed at 2%.
• Administrative and effective provisions: the act is severable; conflicting laws are repealed; effective date is September 1, 2015.

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

Subjects

Motor Vehicles