How to Complete an Alabama Vehicle Gift Affidavit: Form MVT 7-5

To gift a vehicle in Alabama without the recipient owing the state’s 2% automotive sales and use tax, the donor and recipient complete an Alabama vehicle gift affidavit, officially Form MVT 7-5, and submit it with the signed title when the recipient applies for a new title and registration. The affidavit is a sworn statement that no money, trade, service, or debt forgiveness was exchanged. Signed before a notary and filed with your county license plate issuing official, it’s what tells the Alabama Department of Revenue this transfer is a genuine gift.

What Counts as a Gift

A transfer only qualifies when the donor receives absolutely nothing in return. No cash, no trade, no services, no forgiveness of a debt. Even a token payment of $1 turns the transaction into a sale, and the recipient then owes the 2% automotive sales and use tax on the vehicle’s fair market value.¹ On a $15,000 vehicle, that’s $300 in tax the gift exemption saves.

By signing the MVT 7-5, both parties are making a sworn legal declaration that no compensation changed hands.² If any payment actually occurred, the affidavit cannot be used and the transfer has to be processed as a sale.

Filling Out Form MVT 7-5

You can get the form from the Alabama Department of Revenue website or from your local county licensing official. Every field needs to be accurate. Blanks and mismatches cause rejections.

Full legal names and current physical addresses for both the donor and the recipient. Names must match the title assignment exactly, including suffixes like Jr. or III.³
Vehicle identification number (VIN), make, model, and year.²
Odometer reading. The mileage on the title application must match the mileage in the title assignment exactly, unless the vehicle is exempt from mileage disclosure.³

Because it’s a sworn statement, the affidavit has to be notarized. Both parties sign in front of a notary public. Alabama caps notary fees at $10 per notarial act, so this step is cheap.

What to Bring With the Affidavit

The notarized MVT 7-5 is the core document, but the county licensing official will want several others to process the transfer.

The original certificate of title, with the donor’s signature in the assignment section on the back. The name on the title application must be identical to the name in the assignment.³
Proof of Alabama liability insurance. The licensing official will try to verify coverage through the Online Insurance Verification System (OIVS), but bring proof in case electronic verification fails.⁴
The recipient’s valid driver’s license or state-issued ID.

Insurance is what trips people up most often. Call your insurer before heading to the county office to add the gifted vehicle, or confirm that your existing policy covers newly acquired vehicles during a transition period. Without verifiable coverage, you’ll be sent home.

If the Title Is Lost or the Vehicle Has a Loan

You cannot transfer without a certificate of title. If the donor has lost the original, they need to apply for a replacement first. The fee for a duplicate Alabama title is $15 and is non-refundable.⁵ Build that lead time into your plan so the recipient still meets the 20-day registration window.

If the vehicle still has a loan on it, the lienholder is named on the title, and the donor cannot legally sign it over until the loan is paid off. The lienholder often physically holds the title. The donor must satisfy the loan in full and obtain a lien release before gifting the vehicle.⁶ Attempting to gift a vehicle with an active lien will get the title application rejected.

Where to File, Fees, and the Deadline

Applications for an Alabama certificate of title go through a designated agent of the Department of Revenue. Designated agents include county license plate issuing officials, licensed Alabama motor vehicle dealers, and Alabama financial institutions.³ For a gift, you’ll go to your county’s license plate issuing official.

Expect to pay a $15 title application fee, a small processing commission of up to $3.00, and a registration fee that runs from $23 to $105 for passenger cars and pickup trucks depending on the vehicle.⁷⁸ Some counties add local fees; call your county licensing official in advance to confirm the total. No sales or use tax is due when the MVT 7-5 is accepted.

Alabama gives you 20 calendar days from the date you receive the vehicle to title and register it. Miss the window and you may face penalty charges or interest.⁴ The clock starts on the date of the gift, not on the day you finally gather the paperwork.

What the Affidavit Cannot Be Used For

The MVT 7-5 is signed under penalty of perjury. Claiming a transfer was a gift when money actually changed hands is tax fraud. Alabama treats perjury as a serious criminal offense, and the affidavit itself warns signers. The IRS can independently investigate cases where sworn documents are used to evade taxes. Whatever tax the sale would have generated is not worth the exposure.

Federal Gift Tax

Alabama has no state gift tax, but the federal rules can still apply. For 2026, the annual gift tax exclusion is $19,000 per recipient.⁹ If the fair market value of the vehicle exceeds $19,000, the donor is generally required to file IRS Form 709.¹⁰

Filing Form 709 doesn’t necessarily mean tax is owed. The gift is reported against the donor’s lifetime exclusion, which is well over $13 million for 2026. For most vehicle gifts this is a paperwork step, not a tax bill, but don’t skip it on a high-value vehicle.

Medicaid Look-Back for Older Donors

If the donor may need Medicaid-funded long-term care within the next several years, think carefully before gifting. When someone applies for Medicaid long-term care, the state reviews all asset transfers from the previous 60 months to see whether anything was given away for less than fair market value.¹¹ A gifted vehicle falls within that review and can trigger a penalty that delays eligibility. If the donor is in their 50s or older and the vehicle has real value, an elder law attorney is worth a call before the affidavit is signed.

1
Alabama Department of Revenue. Sales and Use Tax Rates
2
Justia Law. Alabama Administrative Code 810-5-75-39
3
Alabama Department of Revenue. Title Applications – FAQ Categories
4
Alabama Department of Revenue. I Just Acquired a Vehicle – How Many Days Do I Have to Title and Register This Vehicle
5
Alabama Department of Revenue. How Do I Apply for a Replacement Title
6
Alabama Department of Revenue. Why Do I Need a Lien Release in Order to Apply for a Replacement Alabama Certificate of Title
7
Alabama Department of Revenue. What Is the Cost to Make Application for Alabama Certificate of Title
8
Alabama Department of Revenue. Motor Vehicle Registration Fees
9
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
10
Internal Revenue Service. Instructions for Form 709
11
Centers for Medicare & Medicaid Services. Transfer of Assets in the Medicaid Program – Important Facts for State Policymakers