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

Gifting a car in Texas 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 Texas Tax Vehicle Gifts?

Qualifying family gifts pay a flat $10 gift tax instead of the standard 6.25% motor vehicle sales tax.

This is one of the best gift exemptions in the US — a flat $10 fee regardless of vehicle value.

Family Members Exempt in Texas

Spouse
parent
child
sibling
grandparent
grandchild — all qualify for the $10 gift tax rate

Must be a genuine gift (no consideration paid). If any money changes hands, standard 6.25% sales tax applies.

Required Forms

Form 14-317 (Affidavit of Motor Vehicle Gift Transfer) — required at TxDMV

Both the donor and recipient must sign Form 14-317 under oath. Submit with Form 130-U (title application).

How Fair Market Value Is Assessed

TxDMV uses Standard Presumptive Value (SPV) for taxable transactions. For gifts, the $10 rate overrides SPV.

If the IRS determines the gift was actually a disguised sale, federal gift tax rules apply.

Federal Gift Tax

At $10 total state tax, Texas is the most favorable state for vehicle gifting. Federal gift tax reporting still applies if value exceeds $18,000 (2024).

Penalty for Misrepresentation

Fraudulent gift affidavit is perjury. TxDMV may assess back taxes at 6.25% plus 5%–10% penalty plus interest.

Texas-Specific Facts for Vehicle Gift Tax

Texas Vehicle transfer fees and requirements

In Texas, the title transfer fee is $33 and registration costs $50.75 per year. Vehicle sales are subject to 6.25% motor vehicle sales tax on purchase price. Texas does not require notarization for private-party vehicle transfers. Emission testing is required in Texas — verify the vehicle passes before completing the sale.

Annual safety inspection required; emissions testing in select counties
Title transfer within 30 days at county tax office
Form 130-U required for title transfer
Standard Presumptive Value (SPV) used for tax assessment on private sales

Official Texas bill of sale form

The official Texas bill of sale form is Form 130-U (Application for Texas Title and/or Registration). BillOfSaleNow generates a document that meets all Texas requirements and can be used in place of the official form.

Texas sales tax on vehicle purchases

Texas has a 6.25% state sales tax rate. Flat 6.25% motor vehicle sales tax statewide. Private-party vehicle sales in Texas are subject to sales tax. Tax based on Standard Presumptive Value (SPV) or purchase price, whichever is higher. The title transfer fee is $33.

Texas bill of sale statistics

BillOfSaleNow has generated 10,842 bill of sale documents for Texas transactions, with 292 generated this month alone. The most popular vehicle type is car.

More Texas Vehicle Guides

Each guide is written specifically for Texas 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 Texas?

Qualifying family gifts pay a flat $10 gift tax instead of the standard 6.25% motor vehicle sales tax. This is one of the best gift exemptions in the US — a flat $10 fee regardless of vehicle value.

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

Spouse, parent, child, sibling, grandparent, grandchild — all qualify for the $10 gift tax rate. Must be a genuine gift (no consideration paid). If any money changes hands, standard 6.25% sales tax applies.

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

Form 14-317 (Affidavit of Motor Vehicle Gift Transfer) — required at TxDMV. Both the donor and recipient must sign Form 14-317 under oath. Submit with Form 130-U (title application).

Does federal gift tax apply to vehicle gifts in Texas?