Gifting a Car in Texas: Title Transfer, Forms, and $10 Gift Tax

Gifting a car in Texas takes three documents and one trip to the county tax office: the signed vehicle title, Form 130-U (Application for Texas Title and/or Registration), and the notarized Affidavit of Motor Vehicle Gift Transfer (Comptroller Form 14-317). When the recipient is a qualifying family member, the tax on the transfer is a flat $10 instead of the 6.25% motor vehicle sales tax.1State of Texas. Texas Tax Code 152.025 – Tax on Gift of Motor Vehicle Everything has to be filed within 30 days, and late paperwork brings penalties starting at $25.

Sign Over the Title

The donor completes the Assignment of Title section on the back of the Texas Certificate of Title. Print the recipient’s name exactly as it appears on their ID; name mismatches are one of the most common reasons county offices reject paperwork.

For vehicles model year 2011 or newer, both donor and recipient must record the odometer reading. Federal law requires odometer disclosure for these vehicles until they reach 20 years old; model year 2010 and older vehicles are exempt.2NHTSA. Consumer Alert: Changes to Odometer Disclosure Requirements Write the same reading on Form 130-U so the numbers match.

If the title lists two owners joined by “and,” both must sign. If the names are joined by “or,” either owner can sign alone.

Complete Form 130-U

Both the donor and recipient fill out and sign Form 130-U, available at any county tax assessor-collector’s office or as a downloadable PDF from the TxDMV website.3Texas Department of Motor Vehicles. Application for Texas Title and/or Registration The form collects each party’s name, address, and driver’s license number, along with the vehicle identification number and the date of the gift. An incorrect or incomplete 130-U is the fastest way to get sent home from the counter, so read every field twice before you go.

Complete and Notarize Form 14-317

Form 14-317 is what tells the county tax office the transfer is a gift and not a sale. It documents the transfer and the relationship between donor and recipient. Both parties must sign, and the signatures must be notarized by either a Texas notary public or the county tax assessor-collector (or their employee) at the time of filing.4Cornell Law Institute. 34 Texas Admin Code 3-80 – Motor Vehicles Transferred as a Gift or for No Consideration Without a properly completed 14-317, the county treats the transfer as a sale and charges the full 6.25% motor vehicle sales tax.

If you plan to have the form notarized at the county office, both parties need to appear together. A donor who can’t be there should get the form notarized in advance and give the original to the recipient.

Who Qualifies for the $10 Gift Tax

The $10 rate replaces the 6.25% sales tax only when the vehicle passes between certain people. The qualifying list is broader than most people expect. In-laws and step-relatives count. According to Form 14-317, the $10 rate applies to a vehicle received from any of the following:5Texas Department of Motor Vehicles. Form 14-317 – Affidavit of Motor Vehicle Gift Transfer

  • Spouse (separate property only; community property transfers between spouses aren’t gifts because both spouses already own the vehicle)
  • Parent, stepparent, or foster parent, including father-in-law and mother-in-law
  • Child, stepchild, or foster child, including son-in-law and daughter-in-law
  • Grandparent or great-grandparent, including the in-law equivalents
  • Grandchild or great-grandchild, including the in-law equivalents
  • Sibling, including brother-in-law and sister-in-law
  • Guardian
  • A decedent’s estate (vehicles inherited or received through an Affidavit of Heirship)

Transfers to or from a qualifying 501(c)(3) nonprofit organization also get the $10 rate, provided the organization uses the vehicle exclusively for its exempt purposes.4Cornell Law Institute. 34 Texas Admin Code 3-80 – Motor Vehicles Transferred as a Gift or for No Consideration Qualifying revocable trusts are eligible too.

If the recipient isn’t on the list — a cousin, friend, or coworker — the county treats the transfer as a sale no matter what changed hands. The 6.25% sales tax applies, calculated on either the amount paid or the vehicle’s standard presumptive value, whichever is higher.6Texas Comptroller. Motor Vehicle – Sales and Use Tax On a vehicle valued at $15,000, that is roughly $938 in tax instead of $10. You can check a vehicle’s standard presumptive value using the calculator on the TxDMV website.7Texas Department of Motor Vehicles. Standard Presumptive Values

Pay Off Any Lien First

A vehicle can’t be gifted while a lien is still on it. If the recipient takes over the donor’s remaining loan payments, the Comptroller treats that assumption of debt as consideration, which turns the “gift” into a taxable sale.8Texas Comptroller. Motor Vehicle Tax Guide – Gift Tax The donor needs to pay off the loan and get a lien release from the lender before signing over the title.

One nuance: if the recipient takes out a brand-new loan using the gifted vehicle as collateral after receiving it, the $10 gift tax still applies, as long as that loan has nothing to do with the original transfer. The county may ask for a lender statement confirming the new loan is unrelated.8Texas Comptroller. Motor Vehicle Tax Guide – Gift Tax

Insurance and ID at the Counter

The recipient must have active Texas liability insurance on the vehicle before the county will process the transfer. State minimums are $30,000 per person for bodily injury, $60,000 per accident, and $25,000 for property damage. Have the insurance card or digital proof ready.

Both parties present valid government-issued photo ID. As of March 5, 2026, Texas requires enhanced identification for initial vehicle registration transactions.9Texas Department of Motor Vehicles. Identification Requirements for Vehicle Registration Transactions Acceptable forms include a REAL ID-compliant driver’s license from any U.S. state, a U.S. passport, or a Texas License to Carry. A standard driver’s license that isn’t REAL ID-compliant still works if it was issued by a state that requires proof of legal presence (Texas is on that list). If your license doesn’t meet either standard, bring a supplemental document such as a U.S. birth certificate or Certificate of Naturalization.

File in Person, Within 30 Days

The recipient files everything at the county tax assessor-collector’s office. Some counties accept mail-in applications, but filing in person lets the clerk catch errors on the spot. Budget for these charges:

All of this must be filed within 30 days of the date the donor signed the title. Miss that window and a $25 penalty applies on day 31. After the 60th day, an additional $25 accrues for each 30-day period the application remains unfiled, up to a $250 maximum.13State of Texas. Texas Transportation Code 501.146 – Title Transfer; Late Fee Active-duty military personnel get 60 days before penalties begin.14Texas Department of Motor Vehicles. Title Penalties Press Release The new title arrives by mail, typically within two to three weeks.

Donor’s Follow-Up: File Form VTR-346

After signing over the title, the donor should file a Vehicle Transfer Notification (Form VTR-346) with TxDMV within 30 days.15TxDMV.gov. Texas Motor Vehicle Transfer Notification (Form VTR-346) This updates the state’s records to show the car has been transferred. Once the notification is on file, the donor can’t be held responsible for parking tickets or toll violations racked up by the new owner.16TxDMV.gov. Buying or Selling a Vehicle

The VTR-346 can be submitted online through the TxDMV website or by mail. TxDMV will still update the record if you file after 30 days, but sooner is better. This step is entirely the donor’s responsibility and is separate from anything the recipient does at the county office.

Federal Gift Tax Is a Separate Issue

The $10 Texas gift tax is a state motor vehicle fee and has nothing to do with federal gift tax. For 2026, the IRS annual gift exclusion is $19,000 per recipient.17Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 If the vehicle’s fair market value is at or below $19,000, the donor has no federal reporting obligation. Married couples can each use their own $19,000 exclusion through gift splitting, covering a vehicle worth up to $38,000 without a filing requirement.

If the vehicle exceeds the exclusion amount, the donor files IRS Form 709 by April 15 of the following year.18Internal Revenue Service. Gifts and Inheritances Filing doesn’t mean owing tax; it reports the gift against the donor’s lifetime exemption. Most people will never owe federal gift tax, but the reporting requirement still applies.