Gifting a Car: Taxes & Fees in All 50 States (2026)
Most states charge no sales tax on a genuine gifted car — but the qualifying relatives, required affidavits, and traps (assumed loans, the infamous "$1 sale") vary state to state. We verified every state's gift and family-transfer rules against official DMV and revenue sources. Pick your state:
Frequently asked questions
Do you have to pay taxes on a gifted car?
Usually not — most states exempt genuine gifts (and many exempt family transfers specifically) from vehicle sales/use tax, as long as no money changes hands and no loan is assumed. But the rules, qualifying relatives, and required affidavits differ sharply by state — check your state's page below.
Is it better to gift a car or sell it for $1?
Gift it, with the proper paperwork. A $1 sale is still legally a sale: in states that tax the higher of price or book value, you'd owe tax on the car's full book value, and in others the token price simply forfeits the gift exemption. The documented gift is the route that actually produces $0 tax.
Does the IRS tax gifted cars?
Almost never for ordinary vehicles — car values fall below the federal annual gift-tax exclusion for most givers, so no federal tax or filing applies. State title and tax rules are what matter in practice.
What does it cost to transfer the title on a gifted car?
Even a tax-exempt gift pays the state's standard title fee — anywhere from about $5 (New Mexico, North Dakota) to $214.50 (Wisconsin, though qualifying family transfers skip it there). Each state page shows the exact fee and deadline.