Skip to content
CarShots

Alabama car sales tax

Alabama car sales tax calculator

Alabama charges 2% state automotive sales tax (state 2% automotive rate) on cars, and counties and cities can add more. Your trade-in lowers the tax. Work out the tax, your out-the-door price and your payment below.

$
$
$

New or used

Credit

Scores 660 to 719. The rate fills in; change it if you have a quote.

Term

%
%

Alabama's state rate. Counties and cities can add more.

$
$

Estimated payment

$469/mo

72 months at 9.7% APR

Car price
$30,000
Sales tax
$500
Down and trade-in
−$5,000
Amount financed
$25,500
Total interest
$8,236
Total cost
$38,736

An estimate, not an offer of credit. Your rate depends on your credit and the lender.

On this page

Alabama car sales tax at a glance

Alabama
Taxautomotive sales tax (state 2% automotive rate)
State rate2%
Counties and cities add taxYes
Trade-in lowers the taxYes, tax is on the price minus the trade
LeasesTax on each monthly payment

Checked on the state's official sources on 2026-11-02. Rates change; the state's revenue department has the last word.

How to work out Alabama sales tax on a car

Multiply the taxable price by the rate. In Alabama the trade-in comes off first.

A $30,000 car with a $5,000 trade: $25,000 x 2% = $500 at the state rate, plus any county or city tax where you register the car.

State automotive rate is 2% (Ala. Code 40-23-2(4)), not the 4% general rate; most cities and counties add their own automotive sales tax.

Trade-ins

Tax is levied on the net difference after a trade-in (Admin. Rule 810-6-1-.22); a trade-in larger than the price gives no extra deduction.

Leasing a car in Alabama

Tax on each monthly payment. Alabama: the lessor owes 1.5% state lease (rental) tax on gross lease proceeds, normally collected on each monthly payment; local lease taxes may add, and a trade-in applied to a lease is taxable (no trade-in credit). The lease calculator uses Alabama's method when you pick the state.

Dealer doc fees

No state cap found.

Common questions

What is the sales tax on a car in Alabama?

The state rate is 2%. State automotive rate is 2% (Ala. Code 40-23-2(4)), not the 4% general rate; most cities and counties add their own automotive sales tax.

Does a trade-in reduce sales tax in Alabama?

Yes, tax is on the price minus the trade. Tax is levied on the net difference after a trade-in (Admin. Rule 810-6-1-.22); a trade-in larger than the price gives no extra deduction.

How is a car lease taxed in Alabama?

Tax on each monthly payment. Alabama: the lessor owes 1.5% state lease (rental) tax on gross lease proceeds, normally collected on each monthly payment; local lease taxes may add, and a trade-in applied to a lease is taxable (no trade-in credit).

Put this calculator on every car you sell, free

CarShots adds a payment and lease calculator to every Car Page and to your own website. Shoppers pick a payment and send it to you, with their name and number. Free on every plan, including your first free car.