To gift a car in Texas to a qualifying family member, you pay a flat $10 gift tax instead of the state’s 6.25% motor vehicle sales tax, and you complete the transfer by filing Form 130-U along with a notarized Form 14-317 gift affidavit at your county tax assessor-collector’s office within 30 days of the handover. On a $25,000 vehicle, that’s the difference between $10 and roughly $1,563 in tax.
Who Qualifies as a Family Member
The $10 rate under Texas Tax Code Section 152.025 is limited to specific relationships.1State of Texas. Texas Tax Code 152.025 – Tax on Gift of Motor Vehicle Eligible recipients are:
- Spouse (separate property transfers between married partners)
- Parent or stepparent
- Child or stepchild
- Grandparent or grandchild
- Sibling
- A ward receiving the vehicle from a court-appointed legal guardian
The Texas Comptroller also recognizes transfers involving in-laws (father-, mother-, son-, daughter-, brother-, and sister-in-law) and grandparent-in-law or great-grandchild relationships as eligible.2Texas Comptroller of Public Accounts. Motor Vehicle Tax Guide – Gift Tax Certain revocable trusts under the Texas Trust Code and 501(c)(3) nonprofits using the vehicle for their charitable purpose also qualify.1State of Texas. Texas Tax Code 152.025 – Tax on Gift of Motor Vehicle
Cousins, aunts, uncles, and friends don’t qualify. Even when no money changes hands, the Comptroller treats those transfers as sales and applies 6.25% tax on the vehicle’s standard presumptive value.3Texas Comptroller of Public Accounts. Motor Vehicle Sales and Use Tax
What to Gather Before the Tax Office
Missing paperwork means a wasted trip. Have everything ready:
- The original certificate of title. If a lien is still recorded on it, deal with that first (see below).
- Valid government-issued ID for both the giver and the recipient.
- Proof of Texas liability insurance in the recipient’s name covering the gifted vehicle. State minimums are $30,000 per injured person, $60,000 per accident, and $25,000 for property damage. Without it, the recipient can apply for “title only” but cannot register or legally drive the car.4Texas Department of Insurance. Auto Insurance Guide5Texas Department of Motor Vehicles. Buying or Selling a Vehicle
- The exact odometer reading at the time of handover.
- The 17-digit Vehicle Identification Number, found on the driver’s side dashboard and inside the driver’s door frame.
Clear Any Lien First
You cannot gift a vehicle that still has a loan attached. Once the loan is paid off, the lienholder should sign the release section on the title or provide an original release-of-lien document. Photocopies and faxes are not accepted.6Texas Department of Motor Vehicles. Get a Copy of Your Vehicle Title For electronic titles, the lienholder releases it through the state system. A paid-off loan doesn’t always clear the record automatically, so confirm before you go.
The Two Forms and the Notary
Two forms carry the transfer. Both are available at TxDMV, the Comptroller’s website, or your county tax office.
Form 130-U, Application for Texas Title and Registration
This is the standard title application for any Texas ownership change. Check the box indicating a gift, enter $10 as the tax amount, and have both parties sign.7Texas Department of Motor Vehicles. Application for Texas Title and/or Registration – Form 130-U
Form 14-317, Affidavit of Motor Vehicle Gift Transfer
Form 14-317 is a sworn statement identifying the family relationship and declaring the transaction is a genuine gift. Both signatures must be notarized before you get to the tax office. A clerk will reject an unsealed affidavit on sight.2Texas Comptroller of Public Accounts. Motor Vehicle Tax Guide – Gift Tax
Texas notaries can charge up to $10 per signature for an acknowledgment and $10 for administering an oath with a seal.8Texas Secretary of State. Notary Public Educational Information With both parties signing, budget roughly $11 to $20. Banks, UPS stores, and shipping centers commonly offer notary services. Use blue or black ink.
Filing at the County Tax Office
The recipient brings the notarized affidavit, completed Form 130-U, original title, proof of insurance, and ID to the county tax assessor-collector. The clerk collects the $10 gift tax plus a title application fee of $28 or $33, depending on the county.7Texas Department of Motor Vehicles. Application for Texas Title and/or Registration – Form 130-U If registration is expired or nearly so, registration fees are collected at the same time.
Texas eliminated the annual safety inspection for non-commercial vehicles as of January 1, 2025. A $7.50 Inspection Program Replacement Fee is collected at registration in its place. In the 17 Texas counties that still require emissions testing, including Harris, Dallas, Tarrant, Travis, and El Paso, a passing emissions report is still needed before registration.9Texas Department of Motor Vehicles. Vehicle Inspection Changes
The clerk prints a receipt as temporary proof of ownership. New plates, when needed, are usually issued on the spot. TxDMV mails the updated physical title to the recipient, generally in four to six weeks.
The 30-Day Deadline
Texas requires the vehicle to be titled in the new owner’s name within 30 days of transfer. Missing that window can trigger delinquent transfer penalties.5Texas Department of Motor Vehicles. Buying or Selling a Vehicle The person giving the car should also file a Vehicle Transfer Notification with TxDMV within 30 days. That filing protects the previous owner from liability for parking tickets and toll violations the new owner runs up after the transfer date.
If the Vehicle Has an Out-of-State Title
For vehicles not subject to commercial or emissions inspection, the recipient can self-certify the VIN on the title application rather than obtaining a separate VIN inspection.10Texas Department of Motor Vehicles. Out of State and Imported Vehicles In an emissions-required county, a passing report is still required. The out-of-state title is surrendered at the county tax office, and a new Texas title is issued.
Federal Gift Tax Is a Separate Question
The $10 is a Texas motor vehicle tax and has no bearing on federal gift tax rules. Under IRS rules, a gift to a single person exceeding $19,000 in a calendar year (the 2026 annual exclusion) may require filing Form 709, the federal gift tax return.11Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 The relevant value is the car’s fair market value on the date of the gift, not what the giver paid.
Filing Form 709 does not necessarily mean tax is owed. The lifetime gift and estate tax exemption is high enough that most filers never pay it, but the return is still required if the value exceeds $19,000. Married couples can split gifts, effectively doubling the reporting threshold to $38,000 per recipient.12Internal Revenue Service. Instructions for Form 709 Gifts between spouses who are both U.S. citizens are generally unlimited and require no return.