Purchaser’s Statement of Tax Exemption (SUT-3) in Virginia

The Virginia SUT-3 form, formally the Purchaser’s Statement of Tax Exemption, is the document you file with the DMV to claim an exemption from the state’s 4.15 percent motor vehicle sales and use tax when you title a vehicle. It applies to the transfer scenarios listed in Virginia Code § 58.1-2403, and by far the most common use is a gift between a spouse, parent, or child.¹ You submit the SUT-3 alongside your title application; if the DMV accepts the exemption, no sales tax is charged on the transfer.

Who Can Use the SUT-3

Each exemption on the form corresponds to a numbered code that maps to a subsection of § 58.1-2403.¹ You pick the one that matches your situation. The categories most people run into:

Family gifts (Code 7): a vehicle gifted to a spouse, son, daughter, or parent of the giver. No other relatives qualify.
Government vehicles (Codes 1 and 2): vehicles sold to or used by the federal government, the Commonwealth of Virginia, or any Virginia locality.
Volunteer emergency organizations (Code 3): vehicles registered to a nonprofit volunteer fire department or volunteer EMS agency.
Tribal members (Code 4): vehicles registered to members of the Mattaponi, Pamunkey, Chickahominy, or other recognized Virginia tribes living on tribal reservations.
Lien repossessions (Code 5): vehicles transferred to a lienholder after repossession under a recorded lien.
Corporate and LLC restructuring (Codes 8 and 9): transfers between an individual or partnership and a corporation or LLC during formation, organization, or dissolution where the individual or partnership holds a majority interest, and transfers between a parent corporation and its wholly owned subsidiary.
Out-of-state vehicles (Code 10): a vehicle being registered in Virginia for the first time where the applicant has a valid title from another state and has either owned it more than 12 months or can show sales tax was paid to another state.
Dealer inventory (Code 11): vehicles titled in a dealer’s name for resale.

A handful of narrower categories also exist, including manufactured homes attached to real estate, certain large-capacity buses sold to urban transit lines, and vehicles purchased by nonresidents where a Virginia title is issued only to record a lien.¹ The statute does not include a general exemption for nonprofits or charities buying vehicles, which catches some organizations off guard.

The Family Gift Rules Are Narrower Than People Expect

Only four relationships qualify for the Code 7 gift exemption: spouse, son, daughter, or parent of the person giving the vehicle. Siblings, grandparents, aunts, uncles, stepchildren, and in-laws are all excluded. If your brother wants to give you his truck, the DMV will charge the full 4.15 percent tax based on the vehicle’s fair market value.¹

The debt rule trips people up more than anything. If a parent gives a car to their child but the child takes over the remaining loan payments, the exemption does not apply. Virginia treats that assumed debt as consideration, not a gift. The only exception is between spouses, where the exemption still holds even if one spouse takes on the other’s loan balance.¹

Bring documents that prove the relationship. A birth certificate, marriage license, or adoption decree can serve as verification if the examiner asks.²

Filling Out the Form

The SUT-3 is a single page you can download from the Virginia DMV site or pick up at any customer service center.³ It’s short, but a small mistake can get the form rejected and leave you paying the tax on the spot. You’ll need:

Vehicle information: the VIN, year, make, and existing title number. The VIN is on the dashboard near the windshield or printed on the current title.
Buyer and seller details: full legal names and current addresses for both parties.
The exemption code that fits your situation. Each code maps to a subsection of § 58.1-2403, and a short description sits next to each option on the form.
Signatures from both the buyer and seller, certifying that the information is accurate. Sign exactly as your name appears on your ID.

Picking the wrong code is the fastest path to rejection. If your mother is gifting you a car, you need Code 7. If you’re titling a vehicle you already owned in another state for more than a year, you need Code 10. Read each description before checking a box.

How to Submit the SUT-3

The completed SUT-3 has to travel with your Application for Certificate of Title and Registration (Form VSA 17A) when you transfer ownership.⁴ You have four options for getting it to the DMV:

In person at any DMV customer service center. This gives the fastest turnaround and lets a clerk flag problems before you walk out.
Online, if the vehicle already has a Virginia title. The DMV describes this route as available for private sales between individuals.⁴
Drop-off at a DMV office. The DMV processes drop-off applications within five business days of receipt.⁵
Mail to the DMV’s Richmond mailing address. Add postal delivery time to your wait.⁴

Once the DMV approves the exemption and processes the title, the new title comes to you by mail.

Fees You Still Owe

The SUT-3 waives the 4.15 percent sales and use tax and nothing else. You still owe a $15 titling fee and applicable registration costs. Annual registration for a passenger vehicle runs $30.75 if it weighs 4,000 pounds or less, or $35.75 for vehicles between 4,001 and 6,500 pounds. Vehicles garaged in certain Northern Virginia localities also face a small emissions inspection surcharge and may owe local registration fees.⁶

The savings can be significant. On a vehicle with a fair market value of $25,000, the 4.15 percent tax would be $1,037.50. Virginia’s minimum tax is $75, so even on a low-value vehicle the exemption keeps real money in your pocket.⁶

Penalties for a False Exemption Claim

Do not claim a gift when money actually changed hands. Anyone who falsely states the selling price on a bill of sale, title application, or any document submitted to the DMV commits a Class 3 misdemeanor.⁷ The same rule catches people who underreport a sale price to shrink their tax bill.

The financial penalties stack on top. If you underpay the tax, Virginia adds a penalty of 10 percent of the amount owed or $10, whichever is greater. For a willfully fraudulent filing, the penalty jumps to 50 percent of the correct tax. The DMV presumes fraud when someone reports a sale price at 50 percent or less of the actual amount. Interest accrues at 1.5 percent per month on both the unpaid tax and any penalties until everything is paid.⁷

Federal Gift Tax Is a Separate Question

A Virginia sales tax exemption is not a federal tax exemption. For 2026, the IRS lets you give up to $19,000 per recipient per year without any gift tax obligation or return requirement.⁸ A married couple can combine their exclusions for up to $38,000 per recipient.

Most parent-to-child vehicle gifts sit comfortably below that threshold and need no IRS paperwork. If the vehicle’s fair market value tops $19,000, the donor files IRS Form 709 to report the gift. Filing does not automatically mean owing tax; the excess simply counts against the donor’s lifetime gift and estate tax exemption.⁹

Records to Keep After Filing

Hold on to your SUT-3, the title application, any relationship documentation, and records of the vehicle’s value for as long as you own the vehicle and for at least three years after you dispose of it. The IRS requires records relating to property to be kept until the statute of limitations expires for the year you sell or otherwise get rid of it.¹⁰ If you received the vehicle as a gift, keep the donor’s original purchase documentation too, in case you ever sell and need to establish your cost basis.

1
Virginia Code Commission. Virginia Code 58.1-2403 – Exemptions
2
Virginia Department of Motor Vehicles. Motor Vehicle Sales and Use Tax
3
Virginia Department of Motor Vehicles. SUT 3 – Purchaser’s Statement of Tax Exemption
4
Virginia Department of Motor Vehicles. Title Your Vehicle or Trailer
5
Virginia Department of Motor Vehicles. Title Application Drop-off Service
6
Virginia Department of Motor Vehicles. DMV Fees
7
Virginia Code Commission. Virginia Code Title 58.1 – Chapter 24
8
Internal Revenue Service. Gifts and Inheritances
9
Internal Revenue Service. About Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return
10
Internal Revenue Service. How Long Should I Keep Records