Gifting a Car in Minnesota: Taxes, Fees & Rules (2026)
Qualifying gifts between individuals are exempt from the sales tax, as are transfers via divorce or inheritance. No gift affidavit form is required anymore. The title fee of $26 still applies. Verified against official Minnesota sources on 2026-07-17.
Gift vs. selling for $1: don't use the $1 trick
The old advice to "sell it for a dollar" usually backfires. A $1 sale is still a sale — in states that tax the higher of price or book value, that means tax on the full book value; in others it simply voids the gift exemption you were entitled to use. The documented gift route (affidavits, the right box on the title) is what actually produces $0 tax where an exemption exists.
What you'll still pay in Minnesota
Even a fully exempt gift pays the standard title transfer fee of $26. The recipient also takes on normal registration costs going forward. The signed title must be delivered/mailed within 10 business days ($2 penalty), and the buyer executes the application within 20 days.
Good to know
- Title cost itemizes as $8.25 title + $2.25 tech surcharge + $12 filing fee + $3.50 public safety fee ≈ $26. Collector vehicles pay a $150 in-lieu tax.
Frequently asked questions
Do you pay taxes on a gifted car in Minnesota?
Qualifying gifts between individuals are exempt from the sales tax, as are transfers via divorce or inheritance. No gift affidavit form is required anymore.
Is it better to gift a car or sell it for $1 in Minnesota?
Gift it — properly. A $1 "sale" is still a sale in most states and can trigger tax on book value or invite a review, while a documented gift uses the actual exemption. Qualifying gifts between individuals are exempt from the sales tax, as are transfers via divorce or inheritance. No gift affidavit form is required anymore. Follow the gift procedure, not the $1 shortcut.
What does the title transfer cost on a gifted car in Minnesota?
The title fee is $26 — that's due on gifts too, even when the tax is exempt. The signed title must be delivered/mailed within 10 business days ($2 penalty), and the buyer executes the application within 20 days.
Does the IRS tax a gifted car?
Almost never for normal vehicles — car values fall under the IRS annual gift-tax exclusion for most givers, so no federal gift tax or return is required. The state-level rules above are what actually matter.
Verified against official sources (dps.mn.gov) — last reviewed 2026-07-17. Estimates are informational only.