Alabama used car dealer paperwork and sales tax guide
How Alabama sales tax works on a used-car deal, how trade-ins and dealer fees are treated, and the title forms and notices a Alabama dealer prints.
Last checked November 14, 2026
This is a plain-language summary of how a used-car deal works out in Alabama: the sales tax, what happens to a trade-in, how dealer fees are treated, and the paperwork a dealer prints. DMS Apex uses these same rules to work out each Alabama deal.
Alabama tax and fees at a glance
| Item | Alabama |
|---|---|
| State tax | 2% state rate plus local tax |
| Who pays it | Collected by the dealer |
| Trade-in | Reduces the tax |
| Dealer / documentary fee | Part of the taxable amount |
| Service contract | Not taxed |
| Starting title fee in DMS Apex | $16.50 |
How Alabama sales tax is worked out
Alabama: 2% state tax on the price, dealer fee and other charges, less the trade-in, plus the city and county tax of your dealership's location (enter the combined rate in Settings). Service contracts and GAP are not taxed. The title fee starts at $16.50 (the state's $15 plus the agent's $1.50); the tag fee at $0, so enter the registration amount.
Other required notices
Alabama requires the following wording on the Buyer's Order. DMS Apex prints it.
- Penalty of fifteen dollars ($15) due if vehicle is not registered in the name of the new owner within 20 calendar days.
Alabama paperwork a dealer prints
DMS Apex prints these documents for a Alabama deal, all in black and white:
- MVT 5-5 Odometer Disclosure
- Buyer's Order with Alabama's required wording
- Buyers Guide
Step-by-step form guides
- MVT 5-5 Odometer Disclosure Statement: how to fill it out
This is general information, not legal or tax advice. Alabama rules change: confirm current requirements with the Alabama Department of Revenue.
Common questions
How much is sales tax on a used car in Alabama?
2% state rate plus local tax. A trade-in reduces the taxable amount. See the table above and confirm the current rate with the Alabama Department of Revenue.
Does a trade-in lower the tax in Alabama?
Yes. In Alabama the trade-in allowance reduces the amount the tax is figured on.
Is the dealer fee taxed in Alabama?
Yes. In DMS Apex the dealer / documentary fee is part of the taxable amount for Alabama.
Does DMS Apex print Alabama dealer forms?
Yes. It prints MVT 5-5 Odometer Disclosure, Buyer's Order with Alabama's required wording, Buyers Guide.
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