Gifting a car to a family member: the tax, the forms and every state's rule
Gifting a car to a family member is cheap in most of the country, but only if it is done as a gift and claimed on the right form. The title fee is charged either way. What changes is the sales tax: 29 states charge none on a genuine gift from anyone, 12 plus DC waive it only for listed relatives, Georgia, Illinois and Texas charge a small flat or reduced amount, and Alaska, Delaware, Montana, New Hampshire and Oregon have no sales tax to begin with. Utah gives no break at all. On the federal side, a car worth $19,000 or less, if it is your only gift to that person in 2026, needs no IRS paperwork.
How to gift a car to a relative, step by step
- Clear the loan. A car with a lien cannot pass cleanly, and a recipient who takes over payments is, in most states, buying it.
- Sign the title over as a gift. Where the form asks for a price, many states want the word "gift" (Kansas, Missouri, New Jersey, Virginia, California) and some want $0 (New York, Washington). Fill in the odometer reading and every owner's signature.
- Add the state's gift form. Most have one: AU-463 in Connecticut, MV-13ST in Pennsylvania, VR-103 in Maryland, ST-108E in Indiana, MVR-613 in North Carolina, Form 794 in Oklahoma. The table names each.
- Prove the tax was paid once. Colorado, Massachusetts, Missouri, Nebraska, Washington and Wyoming exempt the gift only because the giver already paid tax, so bring their receipt or old registration.
- Title and register in time. The recipient has the same deadline as a buyer, 15 days in Washington for example. Insurance has to be in the new owner's name before they drive away, and the plates usually stay with the giver.
Is a gifted car taxed? Every state
Checked on 2026-11-01. "Who counts" is who can give the car without the recipient paying sales tax. Each state links to its title transfer page, where the fee, forms and deadline are.
| State | Sales tax on a gift | Who counts | Worth knowing |
|---|---|---|---|
| Alabama | Not taxed | Anyone | ALDOR's sales tax rule 810-6-1-.150 says a gift is not a sale. The county license office still handles the title. Source |
| Alaska | No state sales tax | Anyone | A handful of boroughs and cities tax vehicles, so check locally. Source |
| Arizona | Not taxed | Anyone | Arizona taxes dealer sales. The Department of Revenue says sales between private parties are not taxable. Source |
| Arkansas | Not taxed | Anyone, if the giver paid tax and registered it | Giver and recipient both sign a gift affidavit (rule GR-12). Source |
| California | Not taxed | Anyone, if nothing comes back | Write "gift" where the price goes and file REG 256. A sale to a parent, child, grandparent, grandchild or spouse is untaxed too. Source |
| Colorado | Not taxed to you | Anyone | The giver must have paid tax when they bought it, and the county clerk wants that receipt. Source |
| Connecticut | Not taxed | Anyone | The giver signs AU-463, the Gift Declaration, and may owe Connecticut's own gift tax. Source |
| Delaware | No sales tax | Spouse, parent, grandparent, child, sibling | The DMV handles a family gift for its $35 title fee. The 5.25% document fee that Delaware charges in place of sales tax is figured on a purchase price or book value. Source |
| District of Columbia | Not taxed for close family | Spouse, domestic partner, parent, child | Excise Tax Gift Exemption form, and only on a car that already has a DC title. Source |
| Florida | Not taxed | Anyone, with no loan taken over | Tick Gift in the tax exemption box on HSMV 82040. If the giver is also the lender, it counts as a sale. Source |
| Georgia | TAVT at 0.5%, not 7% | Immediate family | Form MV-16, on a car that already carries a Georgia title with TAVT paid. Source |
| Hawaii | Not taxed | Anyone, with no payment or debt | Form G-27A with a copy of the title transfer. A car bought with gifted cash does not count. Source |
| Idaho | Not taxed | Anyone, with no debt taken over | The giver completes ST-133GT for the recipient to take to registration. Source |
| Illinois | Flat $15 | Spouse, parent, child, brother, sister | Close family pays $15 instead of the private party tax table. Source |
| Indiana | Not taxed | Anyone, if no money or loan changes hands | ST-108E, exemption 7. A 2026 Revenue decision refused a $0 transfer claimed between in-laws. Source |
| Iowa | Not taxed | Anyone, with nothing given back | A bill of sale is still required. A car from a spouse, parent or child also earns a registration fee credit. Source |
| Kansas | Not taxed | Anyone (siblings need TR-12) | TR-215 for parents, grandparents, children and their spouses; TR-12 for anyone else. Put "gift" as the price. Source |
| Kentucky | Not taxed for close family | Spouse, parent, child, step-parent or child, grandparent, grandchild | Claimed on form 71A101. Other gifts are taxed on the NADA trade-in value. Source |
| Louisiana | Not taxed | Anyone, by donation | A notarized Act of Donation. A 2026 bill would limit the break to relatives and charities. Source |
| Maine | Not taxed | Anyone, if no loan is taken over | Tick Exempt Purchase on the Use Tax Certificate. Buying out a co-owner's share is taxed, even between spouses. Source |
| Maryland | Not taxed for close family | Spouse, parent, child, sibling, grandparent, grandchild, in-laws | VR-103. Only spouse and parent-child gifts skip the safety inspection and keep the tags. Source |
| Massachusetts | Not taxed | Anyone, if the giver paid MA tax | MVU-24 for a gift; MVU-26 covers a sale to a parent, spouse, child or sibling. Source |
| Michigan | Not taxed for listed relatives | Spouse, parents, children, siblings, step-relatives, grandparents, grandchildren, in-laws | Claimed on TR-11L. Aunts, uncles, cousins and ex-spouses do not count. Source |
| Minnesota | Not taxed for close family | Spouse, parent and child, grandparent and grandchild | No affidavit any more. A gift from anyone else is taxed on the average value of similar cars. Source |
| Mississippi | Not taxed for close family | Spouse, parent, child, grandparent, grandchild, sibling | Affidavit of Relationship. Cousins, aunts, uncles and in-laws pay the tax. Source |
| Missouri | Not taxed | Anyone, if the giver paid the tax | GIFT on the title plus Form 768 or a signed note. A car cannot be gifted twice in a row. Source |
| Montana | No sales tax | Anyone | Only the signed title passes over. Source |
| Nebraska | Not taxed | Anyone, if the giver paid tax | Form 6 with proof. A false claim costs $100 or ten times the tax. Source |
| Nevada | Not taxed | Anyone | Nevada taxes dealer sales only. Source |
| New Hampshire | No sales tax | Anyone | There is no tax to waive. Source |
| New Jersey | Not taxed | Anyone | Only if "gift" goes on the price line on the back of the title. Source |
| New Mexico | Not taxed | Anyone | MVD 10018, signed by both of you and notarized. Source |
| New York | Not taxed | Anyone | Recorded as $0 on DTF-802, with the giver filling in section 6. Source |
| North Carolina | Not taxed for close family | Spouse, parent, child, step-parent, step-child | MVR-613, and only for a North Carolina title going to a North Carolina resident. Source |
| North Dakota | Not taxed for close family | Spouse, parent, child, grandparent, grandchild, sibling | A trust set up between those relatives also qualifies. Source |
| Ohio | Not taxed | Anyone, if nothing changes hands | Any payment at all, even between relatives, makes it a taxable sale. Source |
| Oklahoma | Not taxed for close family | Parent, child, spouse only | Form 794, the Family Affidavit. Siblings and grandparents pay the excise tax. Source |
| Oregon | No sales tax | Anyone | Oregon's 0.5% privilege tax only reaches new or nearly new cars bought from dealers. Source |
| Pennsylvania | Not taxed | Anyone, with nothing of value received | MV-13ST signed by everyone on both sides. Taking over loan payments is treated as a sale. Source |
| Rhode Island | Not taxed | Anyone | Close family needs a signed letter of gift; anyone else a notarized letter plus SU 87-65. Source |
| South Carolina | No 5% fee for close family | Spouse, parents, children, siblings, grandparents, grandchildren | The infrastructure maintenance fee waiver is claimed on Form 400. Source |
| South Dakota | Not taxed for close family | Spouse, parent and child, siblings | Only the $10 title transfer fee applies. Source |
| Tennessee | Not taxed | Anyone | A gift affidavit. Family sales down to great-grandchildren are untaxed as well. Source |
| Texas | Flat $10 | Spouse, parent, step-parent, grandparent, grandchild, sibling, guardian | The $10 gift tax replaces the 6.25% motor vehicle tax. Source |
| Utah | Taxed | No one | Utah has no family or gift break. Source |
| Vermont | Not taxed for listed relatives | Spouse or ex-spouse, parent, child, in-laws, grandparent, grandchild, sibling, step-relatives | The car must be titled or registered to the giver. Source |
| Virginia | Not taxed for listed relatives | As listed on the back of SUT-3 | "Gift" in place of the price, and SUT-3 from the person receiving the car. Source |
| Washington | Not taxed | Anyone, if the giver paid WA tax | Put $0 on the title application and file within 15 days; a car from Oregon may still owe use tax. Source |
| West Virginia | Not taxed | Anyone | DMV-5-TR signed by both, except spouses or parent and child on a West Virginia title. A new lien makes the 6% due on its amount. Source |
| Wisconsin | Not taxed | Anyone | Pick Gift as the exemption on MV1. Selling the car back to the giver is taxed. Source |
| Wyoming | Not taxed | Anyone, if the giver paid tax | Bring the giver's tax receipt or old registration, or tax is charged on market value. Source |
Which relatives count
In the 29 states that waive tax on any genuine gift, the relationship does not matter. Elsewhere it decides everything, and the lists differ more than people expect:
- Narrowest: Oklahoma takes only parents, children and spouses. North Carolina adds step-parents and step-children. Siblings and grandparents pay in both.
- Siblings: in for Mississippi (since July 2019), South Dakota, North Dakota, Maryland, Michigan and South Carolina; out for Oklahoma, North Carolina and Kentucky. Kansas leaves them off its family form, though its general gift route still covers them.
- In-laws: Maryland, Michigan and Vermont include them. An Indiana family lost that argument in 2026.
- Ex-spouses: Vermont counts one; Michigan does not.
The catches that turn a gift into a sale
- Anything given back. Cash, payments, a swap or taking over a loan makes it consideration. Ohio says plainly that a payment between family members still makes the transfer a taxable sale.
- The giver never paid tax. Several states trace the tax back. Missouri also stops a car being gifted twice in a row, and Idaho refuses its family exemption where the seller never paid.
- Joint owners. Maine taxes buying out a co-owner's half, even between spouses.
- A false claim. Nebraska's penalty is $100 or ten times the tax. West Virginia can revoke every license and registration in both names.
Federal gift tax: when the IRS cares
The federal gift tax is the giver's concern, not the recipient's. For 2026 the annual exclusion is $19,000 per recipient, so a car worth less than that, with no other gifts to the same person that year, needs nothing filed. Above it, the giver files Form 709 by April 15 of the next year, but tax is only owed once lifetime gifts pass the $15 million basic exclusion, which almost no car gift does. A gift to a spouse who is a US citizen needs no return at all. The recipient takes over the giver's tax basis, which only matters if the car is later sold for more than the giver paid.
Questions about gifting a car
Is it better to gift a car or sell it to family for $1?
Gift it. A $1 sale is still a sale, and in many states that puts it back under the sales tax rules a gift avoids, or invites the state to tax it on what the car is really worth. Pennsylvania runs an Understated Value Program for exactly this, and New York asks the seller to explain a low price on DTF-802. Writing "gift" and filing the state's gift form is the honest route and usually the cheaper one.
Does the person receiving a gifted car pay any tax?
In most states, no sales tax, though the title fee and registration are due as normal. Utah taxes it like a sale, Georgia charges TAVT at 0.5%, Texas $10 and Illinois $15 for close family. Federal gift tax, if any, falls on the giver, not the recipient.
Can you gift a car that still has a loan on it?
Not as a tax-free gift. If the person receiving the car takes over the payments, most states treat that as the price. Florida, Maine, Pennsylvania, Indiana, Idaho and Kansas all say so in their guidance, and Washington wants the loan paid off before the gift. Pay it off first, or expect tax on the balance.
Can I gift a car to a friend, not a relative?
In 29 states, yes, with no sales tax, because those states look at whether anything was paid rather than at who you are. In 13 others the break is limited to listed relatives, so a friend pays the normal tax there. The table shows which kind of state yours is.
Do the license plates go with a gifted car?
Usually not. In most states plates stay with the giver, and the recipient registers the car and gets their own. Maryland lets a spouse or a parent and child keep the tags on a gift; other relatives there need new ones and a safety inspection.
Do I need a bill of sale to gift a car?
Some states insist on one even for a gift. Iowa requires a bill of sale for every transfer, and Florida's DMV recommends one. Others want their own gift form instead, such as Connecticut's AU-463 or Pennsylvania's MV-13ST. Where neither is required, a short signed note of the date, the VIN and the word gift costs nothing and settles any later question.
Related: title transfer fees by state, buying from a private seller, and bonded titles for a car that arrives with no title.