How to Calculate Alabama Car Tax

January 26, 2012

Calculating Alabama car tax isn't the most pleasant task to perform, however it's worthwhile to know how much you will pay before venturing out to the marketplace. It doesn't matter if you buy your car from an auto dealer, a private party or across state lines, all sales of road vehicles are subject to taxation. It's not money gone to waste however, as the revenue collected by the state from such sales is allocated into state funds for use in maintaining state motorways.

Compared to other states, Alabama's state auto sales tax rate is modest, at 2 percent of the purchase price. Additionally, local county taxes can be applied as well, up to about 4 percent depending upon the county. A breakdown of local tax rates can be found on the Sales Tax Rates publication from the Alabama Department of Revenue:

For auto purchases outside of the state of Alabama, a Consumers Use Tax is assessed. This includes purchases made online, for example if you purchased a car from a dealer or private party in another state via eBay, you will still be held responsible for reporting and paying the taxes on your vehicle if you had not already done so when acquiring your vehicle tags. Consumers Use Tax also applies to vehicles that do not require tags, such as motorcycles and ATV's. Details on this topic can be found by clicking on the above link for Consumers Use Tax, or you may download a brochure that outlines the basics.

Although there isn't an Alabama car tax calculator on their website, the state's Department of Revenue site has a wealth of information on sales and use tax, including brochures and pamphlets like the one linked above on Consumers Use Tax. The Alabama Department of Revenue website can be accessed via this link.

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