HB268 Alabama 2015 Session

Summary

Primary Sponsor

Steve ClouseRepresentative

Republican

Session

Regular Session 2015

Title

Motor vehicles, sales and use taxes increased, refund process for certain trucks and truck-tractors used in interstate commerce, distrib., Secs. 40-23-2, 40-23-61, 40-23-101, 40-23-102, 40-23-108 am'd.

Summary

HB268 would raise Alabama's motor vehicle sales and use tax from 2% to 3%, create a refund process for excess tax on certain trucks used in interstate commerce, clarify drive-out rules, and specify how the revenue is distributed, making the higher tax exclusive of future local motor vehicle taxes.

What This Bill Does

Increases the motor vehicle sales and use tax rate from 2% to 3%. Establishes a refund process for the amount of excess tax paid on certain trucks and truck-tractors used in interstate commerce, with refunds available if proof of interstate use is provided and interest paid after 30 days for properly documented petitions. Clarifies which vehicles are subject to drive-out provisions and excludes campers and house cars from those provisions. Sets how tax revenues are distributed between state funds (mainly to the Education Trust Fund and the State General Fund) and includes an export exemption for vehicles that will be used outside Alabama within 72 hours, while replacing future local motor vehicle taxes with the increased state tax.

Who It Affects

• Motor vehicle buyers and sellers in Alabama who would pay a higher 3% sales/use tax on vehicle purchases and are affected by export provisions and drive-out rule changes.
• Truck and truck-tractor owners/operators engaged in interstate commerce (and the dealers handling those vehicles) who may file petitions for refunds of excess taxes and must provide IRP-based proof of interstate use.

Key Provisions

• Raise motor vehicle sales and use tax from 2% to 3%.
• Create a refund process for excess taxes paid on certain trucks and truck-tractors used in interstate commerce, requiring proof of interstate use (International Registration Plan) and Department-approved procedures; refunds accrue interest after 30 days if properly documented.
• Exclude vehicle campers and house cars from the drive-out provisions.
• Distribute tax revenues: a majority portion (approximately 58% to Education Trust Fund and 42% to the State General Fund) of the motor vehicle tax revenue; motorboat taxes split 50/50 between the General Fund and Education Trust Fund.
• Make the increased tax exclusive and in lieu of future local motor vehicle taxes; existing local taxes enacted before the act remains operative, but no new local motor vehicle taxes may be levied.
• Provide export exemption: sales of vehicles exported or first used outside Alabama within 72 hours are not subject to Alabama sales tax; other vehicles require documented evidence of delivery outside Alabama.
• Effective date: September 1, 2015.
• Repeal laws or parts of laws that conflict with this act.

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