Sales taxes on casual sales (sales between individuals) are collected
when the purchaser applies for license registration at the courthouse.
Rates are based on the tax rates in effect for vehicles in the county
and municipality in which the purchaser resides. State sales and use
tax on vehicle purchases is 2% of the net purchase price.
The state law requires licensed dealers to furnish all purchasers of new
or used vehicles with an invoice or bill of sale which reports the
separate amounts of state, county and municipal sales tax collected by
the dealer at the time of purchase. The appropriate sales tax rates
should be listed also.
All purchasers of vehicles are required to show their invoice or bill of
sale when applying to the licensing official for vehicle registration.
Registration is mandatory within twenty (20) calendar days of purchase date
without tag penalty. If the licensed dealer has collected county and
municipal sales taxes as reflected on the invoice, then no use tax is
due. However, if municipal or county taxes are not collected at the
time of purchase, the buyer will be required to pay the use tax
applicable to vehicle sales which is in effect for the municipality or
county in which the purchaser abides.
A county resident will always pay applicable state and county sales or
use taxes on vehicle purchases. If the county resident buys a vehicle
from a dealer in the city, then he may pay city sales tax to the
dealer. A city resident will always pay applicable state, county and
city sales or use taxes on vehicle purchases. If the city resident
buys a vehicle from a dealer in a neighboring city and the dealer fails
to collect city sales tax, then the city resident will pay city use tax
at the time of vehicle registration.
The Alabama Legislature amended this law to include county and municipal
sales and use tax on boat purchases effective on and after July 1,
1994. Sales and use tax must be paid prior to boat registration. All
taxes collected by licensing officials are remitted directly to the
appropriate municipal or county government.
Sales and Use Tax Rates For Limestone County (as a percentage):
|State of Alabama||2.00|
|Madison (new rate 10/1/13)||