Alabama dealers

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

ItemAlabama
State tax2% state rate plus local tax
Who pays itCollected by the dealer
Trade-inReduces the tax
Dealer / documentary feePart of the taxable amount
Service contractNot 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.

Run your lot, deals and paperwork in one place

DMS Apex is $28 a month with a 15-day free trial. It prints your state's forms and works out your state's tax.

Start your 15-day free trial

Keep reading