§ 40-12-253 — Ad Valorem Taxation of Motor Vehicles

(a) Effective January 1, 2000, ad valorem taxes on motor vehicles shall be assessed and the tax collected forward on a current basis to coincide with the collection of motor vehicle license taxes and registration fees.
(1) Ad valorem taxes on motor vehicles shall become due and payable on the first day of the registration renewal month of the owner, the date the motor vehicle enters the State of Alabama, the date the motor vehicle is removed from the inventory of a dealer, or the date on which the motor vehicle is otherwise determined to be taxable, whichever comes first. Ad valorem taxes on motor vehicles shall become delinquent on the first day of the month following the registration renewal month for the owner or as otherwise provided by law.
(2) Ad valorem tax on motor vehicles shall be collected through the last day of the month which precedes the assigned registration renewal month for the owner as provided in Section 32-6-61. The definition of owner shall be as defined in subdivision (16) of Section 40-12-240.
(3) No license shall be issued to operate a motor vehicle on the public highways of this state, nor shall any transfer be made by the license issuing official under this article, until the ad valorem tax on the motor vehicle is paid in the county, as evidenced either by a receipt of the tax collecting official where the owner of the motor vehicle resides, if the motor vehicle is owned by an individual, or by the receipt of the tax collecting official in the county where the motor vehicle is based, if the motor vehicle is owned by a firm, corporation, or association. The receipt, as referenced in this subsection, may be evidenced in either a tangible format or in an electronic format as prescribed by the department. The definition of the base of a vehicle shall be the place where a vehicle is most frequently dispatched, garaged, serviced, maintained, operated, or otherwise controlled, and from which it ordinarily departs and to which it ordinarily returns.
(4) Every person, firm, or corporation that plans to operate a motor vehicle shall first return the motor vehicle for ad valorem taxation to the tax assessing official of the county where the individual resides or, if a firm or corporation, where the vehicle is based, and the tax assessing official shall deliver to the person making the return a certificate of assessment on a form prescribed by the Department of Revenue, and the certificate shall be the warrant of the tax collecting official to collect the tax as shown on the assessment form.
(5) Valuation for ad valorem tax assessment purposes shall be based, as specified by law, on the value of the motor vehicle on October 1, as provided by the Department of Revenue. The October 1 valuation shall be used for calculating ad valorem taxes for the next succeeding year beginning January 1 and continuing through December 31.
(6) Before any motor vehicle can be assessed, the tax assessing official shall determine the amount of ad valorem taxes due on the motor vehicle from information provided by the owner. If the number of months for which taxes are delinquent cannot be determined, the motor vehicle shall be presumed to have been in the state for one preceding year in addition to the current tax year for ad valorem tax assessing and collecting purposes. Motor vehicles with delinquent registrations shall be subject to payment of escaped ad valorem taxes for up to two prior years plus the current year.
(b) The license issuing official shall require the applicant to surrender the receipt of the tax collecting official which shall be kept on file in the license issuing official’s office. The license plate shall be evidence of the payment of the license and the ad valorem tax due as provided under this article. The license issuing official may issue a motor vehicle license plate upon receiving certification from the tax assessing official that there is no ad valorem tax due on the motor vehicle.
(c) Ad valorem taxes on a motor vehicle shall be collected on an annual current basis in the registration renewal month of the owner thereof, in conjunction with registration of the motor vehicle; provided, however, that ad valorem taxes due at the time of registration shall be prorated on a monthly basis from the date the motor vehicle enters the State of Alabama, from the date the motor vehicle is removed from the inventory of a dealer, from the date of transfer of ownership of the motor vehicle, or upon the date the motor vehicle otherwise becomes subject to taxation.
(d) Upon the sale, trade, total destruction, permanent removal from Alabama, theft without recovery, or other transfer of a motor vehicle, hereafter referred to as a “demitted motor vehicle” constituting Class I, Class II, or Class IV Property under Section 40-8-1, the owner of the demitted motor vehicle shall be entitled to a pro rata credit for the ad valorem taxes paid with respect thereto for the remainder of the then current period for which the taxes have been paid. In determining the credit available, the total ad valorem taxes previously paid for the then current registration period shall be determined by a ratio, the numerator of which shall be the number of full calendar months from the date the motor vehicle is demitted to the last day of the month which precedes the assigned registration renewal month for the owner as provided in Section 32-6-61, and the denominator of which shall be the number of months for which ad valorem taxes shall have been paid with respect to the motor vehicle. The ad valorem tax credit shall be evidenced by a credit voucher, in a form of which shall be specified by the department, bearing the name of the person entitled to the credit. The ad valorem tax credit so determined shall either (i) be allowed at the election of the owner on a pro rata basis against all ad valorem taxes payable on another motor vehicle or vehicles acquired by the owner in conjunction with the sale or trade of the motor vehicle in respect of which the credit is allowable under this subsection, or (ii) be allowed by the tax collecting official on a pro rata basis against all ad valorem taxes payable on another motor vehicle or vehicles owned by the owner or a member of the owner’s immediate family. No interest shall be allowable on the amount of any credit allowable hereunder. A credit issued shall be creditable only against ad valorem taxes levied by those taxing authorities whose ad valorem taxes had been paid by the owner with respect to the motor vehicle for which a credit is allowed. No credit shall be allowable against any ad valorem taxes levied by the state unless the credit shall be eligible for application and applied against ad valorem taxes levied by taxing authorities other than the state. A credit voucher must be used at the time of issuance. In the event a voucher is presented for credit against ad valorem taxes due and the amount of the voucher is in excess of the taxes due, a new voucher for the excess amount shall be issued referencing the date of issuance of the voucher so presented. The new voucher shall be designated a receipt for credit for reporting purposes with a copy given to the owner. Immediately upon issuance of a receipt for credit and no later than the twentieth day of the month following the month in which the new voucher was issued, the tax collecting official shall remit to the owner a refund credit payment in the amount of the receipt for credit. When a credit voucher is issued and no ad valorem taxes payable on a vehicle are available for credit to the owner, the voucher shall be designated a receipt for credit for reporting purposes with a copy given to the owner. Immediately upon issuance of a receipt for credit and no later than the twentieth day of the month following the month in which the new voucher was issued, the tax collecting official shall remit to the owner a refund credit payment in the amount of the receipt for credit.
(e) The credit provided under subsection (d) may be claimed by the owner of a motor vehicle pursuant to the procedure and upon presentation of the evidence of payment of tax and eligibility for credit pursuant to subsection (d) as specified by regulations issued by the Department of Revenue, including a sworn affidavit of the buyer in the case of a sale or trade of the motor vehicle. The tax collecting official shall charge and collect as a condition to the redemption of a credit voucher or the remittance of a refund credit payment a commission in order to defray the costs thereof at a flat rate of two dollars ($2) for each credit voucher redeemed or refund remitted, which shall be collected by the tax collecting official at the time of the transaction. One-half of the commissions and fees so collected shall be deposited into the general fund of the county in which the fees are collected and the balance shall be remitted to the State General Fund. There is hereby appropriated for the use of the department in carrying out its responsibilities hereunder in each fiscal year a sum as the Legislature shall appropriate to the department for this purpose.
(f) In no event may a credit be claimed under subsection (d), whether in conjunction with the sale or trade of a motor vehicle or pursuant to the issuance of a credit voucher as provided for in subsection (d), later than 12 months after the date a motor vehicle is demitted.
(g) The tax assessing officials and tax collecting officials of the counties in this state, in addition to assessing and collecting the ad valorem taxes due the state and counties on motor vehicles, shall collect the ad valorem taxes on motor vehicles due all cities in this state.
(1) The tax collecting official shall report and pay the money collected for cities at the same time and in the same manner as state and county taxes are reported and paid by the official. The tax assessing and tax collecting officials shall each receive a commission of two and one-half percent of the amount of city taxes collected. The tax collecting officials shall deduct this commission from the amount collected before paying the city treasury and, at the same time, pay to the tax assessing official any commissions due him or her under this article.
(2) The license issuing official shall not issue a license to operate a motor vehicle on the highways of this state until all ad valorem taxes due the state, counties, and cities are paid as evidenced by a receipt of the tax collecting official.
(h) Motor vehicles assessed under this section shall not be included in any assessment made by any person, firm, or corporation under Section 40-11-1, and the motor vehicles shall not be considered an escape property by reason of the failure to include the property value of the motor vehicle in any tax return as of October 1. All motor vehicles shall be assessed and the taxes shall be collected on the motor vehicles as herein provided. The foregoing notwithstanding, any machinery or equipment including, but not limited to, cement mixers, wrecker rigs, and box-type bodies which may be added to a motor vehicle after it leaves the original manufacturer and may be moved from one motor vehicle to another shall be separately valued and assessed with the tax assessing official as personal property.
(i) In addition to the refunds provided for in subsection (d), refunds shall be granted for ad valorem taxes on motor vehicles for monies collected in error, as provided in Section 40-7-9.1, or upon evidence of valuation change or adjustment by the county board of equalization.
(j) All millage rate levies and changes affecting ad valorem taxes on motor vehicles shall become effective on the January 1 following the levy or rate change.
(k) The Department of Revenue may promulgate and implement rules and regulations for the administration of this section.

Legislative History

(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §704; Acts 1945, No. 314, p. 504; Acts 1959, No. 654, p. 1583; Acts 1961, No. 660, p. 822; Act 99-363, p. 581, §2; Act 2000-565, p. 1041, §1; Act 2004-520, p. 1051, §2; Act 2015-556, 2nd Sp. Sess., p. 2085, §3; Act 2017-242, §1.)