Vehicle Gift Tax in California: Who Pays, Who's Exempt, and What Forms You Need

Gifting a car in California comes with specific tax rules that vary by relationship and vehicle value. Here is what the recipient owes, which family members qualify for exemptions, and exactly which forms to file.

Does California Tax Vehicle Gifts?

Transfers to qualifying family members are exempt from California use tax.

Revenue & Taxation Code §6285 exempts gifts between spouses, domestic partners, parents, grandparents, children, and grandchildren.

Family Members Exempt in California

Spouse
registered domestic partner
parent
grandparent
child
grandchild

Siblings are NOT exempt in California. Non-family gifts are subject to use tax on fair market value.

Required Forms

REG 256 (Statement of Facts) checking the 'gift' box — submitted at DMV with title transfer

Both giver and recipient must sign REG 256. DMV will verify the relationship claim.

How Fair Market Value Is Assessed

California uses Kelley Blue Book or NADA retail value as the baseline FMV for non-exempt transfers.

If the gift tax exemption doesn't apply, use tax is 7.25%+ (varies by county) on FMV.

Federal Gift Tax

The federal annual gift exclusion is $18,000 (2024). Vehicles gifted above this amount require a federal Form 709. Most family vehicle gifts fall under this threshold.

Penalty for Misrepresentation

Misrepresenting a sale as a gift to avoid use tax is tax fraud — penalties up to 25% of unpaid tax plus interest.

California-Specific Facts for Vehicle Gift Tax

California Vehicle transfer fees and requirements

In California, the title transfer fee is $23 and registration costs $46 base fee plus additional fees. Vehicle sales are subject to 7.25% base state rate; total can reach 10.25% with local taxes. California does not require notarization for private-party vehicle transfers. Emission testing is required in California — verify the vehicle passes before completing the sale.

Smog certification required for vehicles 4+ model years old
REG 262 form required for title transfer
Use tax due within 30 days if purchased from a private party
Smog transfer fee of $8 applies

Official California bill of sale form

The official California bill of sale form is REG 135 (Bill of Sale). BillOfSaleNow generates a document that meets all California requirements and can be used in place of the official form.

California sales tax on vehicle purchases

California has a 7.25% state sales tax rate. 7.25% base; county/city adds 0.25–3.25% (total up to 10.75%). Private-party vehicle sales in California are subject to sales tax. Use tax applies to private party purchases at the same rate. The title transfer fee is $23.

California bill of sale statistics

BillOfSaleNow has generated 14,217 bill of sale documents for California transactions, with 382 generated this month alone. The most popular vehicle type is car.

More California Vehicle Guides

Each guide is written specifically for California laws, agencies, and procedures. Bookmark for future reference.

Frequently Asked Questions

Do I owe sales tax when I gift a car to a family member in California?

Transfers to qualifying family members are exempt from California use tax. Revenue & Taxation Code §6285 exempts gifts between spouses, domestic partners, parents, grandparents, children, and grandchildren.

Which family members are tax-exempt for vehicle gifts in California?

Spouse, registered domestic partner, parent, grandparent, child, grandchild. Siblings are NOT exempt in California. Non-family gifts are subject to use tax on fair market value.

What forms do I need to gift a car in California?

REG 256 (Statement of Facts) checking the 'gift' box — submitted at DMV with title transfer. Both giver and recipient must sign REG 256. DMV will verify the relationship claim.

Does federal gift tax apply to vehicle gifts in California?