Alabama car tax
Alabama charges a yearly ad valorem tax on cars, collected by the county with registration renewal. The tax is the car's market value × a 15% assessment ratio (Class IV) × the total state, county, city, and school millage. The purchase tax is a low 2% state rate plus local sales tax.
Value from the Alabama DOR vehicle valuation. Class IV (private passenger) 15% assessment. Millage includes the state levy plus county, city, and school mills.
Highest yearly car tax on a $25,000 car
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Buying a car in Alabama: one-time tax
Alabama automotive sales/use tax — 2%, plus local sales tax where you live. Your trade-in is subtracted before tax.
County and city automotive sales taxes are added. Trade-in credit: medium confidence.
Registration and due dates
Registration is about $23 a year plus issuance fees. A title costs $15.
Paid every year with registration renewal in your renewal month (based on your last name's first letter or a staggered schedule).
Cut what your car costs in Alabama
Car tax is set by your town, but your loan and insurance aren't. Refinancing a car loan at a lower rate often saves more each year than the tax itself.
Questions
How is Alabama vehicle ad valorem tax calculated?
Market value × 15% × total millage ÷ 1,000.
Is the Alabama car tax deductible?
Yes. The ad valorem part of your tag renewal is a value-based personal property tax.
Can I deduct Alabama car taxes on my federal return?
Yes, the value-based part is deductible. Alabama's yearly car tax is based on the car's value, so it can be claimed as personal property tax if you itemize on your federal return (subject to the SALT cap). Flat registration fees are not deductible.
Sources
Last checked October 14, 2026. Rates are for passenger cars owned by individuals; leased, business and specialty vehicles can differ. Confirm with your tax collector or commissioner of the revenue.