Motor Vehicle Tax Guide

Transfer During Marriage

A transfer between spouses of a motor vehicle that is community property, for which Texas motor vehicle tax has already been paid, is not subject to either gift tax or motor vehicle tax.

Property Settlement and Divorce Decree

A transfer of a motor vehicle between former spouses is exempt from both gift tax and motor vehicle tax when the transfer is part of the property settlement or results from a court-ordered division of community property in a divorce decree.

Transfer of Separate Property

Separate property includes any property owned by a spouse before the marriage or acquired during the marriage by gift or inheritance.

When a motor vehicle is separate property, a transfer of the vehicle between spouses is subject to either gift tax or motor vehicle tax (see bullet points below).

• A transfer to a spouse for no consideration is subject to gift tax.
• A transfer to a spouse for consideration is subject to motor vehicle tax. Motor vehicle tax is due on the greater of the sales price (including a lien assumption) or 80 percent of the motor vehicle’s standard presumptive value (SPV).

Transfer Between Former Spouses

A transfer between former spouses is subject to motor vehicle tax when the transfer occurs after (and is not a part of) the community property settlement or court-ordered division of community property in a divorce decree. Motor vehicle tax is due on the greater of the sales price or 80 percent of the motor vehicle’s SPV.

Transfer Upon Death of Spouse

As of Sept. 1, 2025 (Senate Bill 2064), motor vehicle gift tax does not apply to a motor vehicle transferred to a distributee from a decedent’s estate under a will or the statutes of descent and distribution, or through a Rights of Survivorship Agreement. This applies to vehicles transferred from a decedent’s estate on or after Sept. 1, 2025.

For additional information, visit the Inherited Motor Vehicles page of this tax guide.