SB501 Alabama 2015 Session

Updated Feb 24, 2026

Summary

Primary Sponsor: Clyde ChamblissSenator
Republican
Session: Regular Session 2015
Title: Sales tax, exemption for certain motor vehicles exported or removed from this state, eliminated under certain conditions, Sec. 40-23-2 am'd.
Summary: SB501 changes the drive-out vehicle sales exemption so that exported vehicles are taxed by Alabama unless the destination state allows an Alabama resident to title/register in Alabama without paying that state's tax.
What This Bill Does
It repeals the automatic Alabama tax exemption for vehicles exported or removed from Alabama within 72 hours for first use outside the state and makes such sales subject to Alabama's automotive sales tax unless the destination state's rules permit an Alabama resident to buy and title/register in Alabama without paying that state's tax. The bill preserves some exclusions and requires documentation for exempt sales, while directing the Revenue Department to publish a yearly list of states that do not allow the drive-out provision. Revenue from these taxes would be split with 58% going to the Education Trust Fund and 42% to the State General Fund.

Who It Affects
Alabama residents who buy motor vehicles to title/register outside Alabama within 72 hours; under the bill they would generally owe Alabama tax unless the destination state's laws would allow tax-free titling/registration in Alabama.
Alabama automobile dealers and retailers selling such vehicles, and the Alabama Department of Revenue; they must apply the new rule, collect or exempt tax accordingly, maintain required documentation, and use the annual state list of eligible states.

Key Provisions
Amends Section 40-23-2 to require the Alabama automotive sales tax on drive-out/export vehicle sales unless the destination state's law allows an Alabama resident to purchase for first titling/registration in Alabama without paying that state's tax.
Requires the Alabama Department of Revenue to publish on October 1 each year a list of states that do not allow drive-out provisions; if the list is incorrect, the taxpayer is relieved from liability for miscollection.
Provides exclusions to the drive-out provision and requires that the exempt sale information be documented on forms approved by the Revenue Department.
Specifies that mobile homes, motor bikes, ATVs, and boats do not qualify for the export exemption unless delivered outside Alabama with appropriate documentation.
Distributes the tax revenue from these sales with 58% to the Education Trust Fund and 42% to the State General Fund.

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