taxes

Motor Vehicle Tax Guide

Family Transfers

Taxable Transfers

The transfer of a motor vehicle between ineligible family members, for consideration, is similar to any other sale between two individuals. The transaction is subject to motor vehicle tax and standard presumptive value (SPV) procedures may apply. Examples of ineligible family members include, but are not limited to:

• aunts/uncles;
• nieces/nephews; and
• cousins.

The transfer of a motor vehicle between certain, eligible family members for no consideration is not subject to motor vehicle tax and is instead subject only to the $10 gift tax.

Eligible family members include:

• spouse (when vehicle is separate property);
• parent or stepparent;
• father/mother-in-law or son/daughter-in-law;
• grandparent/grandparent-in-law or grandchild/grandchild-in-law;
• great grandparent/great grandparent-in-law or great grandchild/great grandchild-in-law;
• child or stepchild;
• sibling/brother-in-law/sister-in-law; and
• a guardian.

The following are examples of taxable transfers:

• Motor vehicle tax is due on the transfer of a motor vehicle given for no consideration from one family member to another family member that does not qualify as an eligible gift transfer under Tax Code Section 152.025, Tax on Gift of Motor Vehicle, and the motor vehicle is not exempt as community property. A transfer of a motor vehicle from one family member to an ineligible family member for no consideration constitutes a sale under Section 152.001(1)(D), Definitions. SPV procedures may apply.
• Motor vehicle tax is due from any family member who assumes the balance of a loan on a motor vehicle from another family member. The taxable amount is the amount required to pay off the loan (i.e., net payoff), plus any additional consideration given. SPV procedures may apply.

Nontaxable Transfers

No motor vehicle tax is due in the following situations:

• Transfer of a motor vehicle from a decedent’s estate to a distributee or under a rights of survivorship agreement. See the Inherited Motor Vehicles webpage in this guide for more information.
• Transfer of a motor vehicle held as community property between spouses. This does not include transfers from a decedent’s estate to a surviving spouse when the motor vehicle was community property. Although both transfers are nontaxable transfers, the latter may qualify for the inherited motor vehicle exemption and must be listed as such on the Form 130-U, Application for Texas Title and/or Registration (PDF).
• Removal of a co-owner or co-maker from the loan documents on a financed motor vehicle, provided no consideration is given, when submitting the Form 130-U (PDF). Upon removal of a co-owner/co-maker from the loan, a lienholder may require the vehicle’s title to be updated since the loan was altered. The CTAC has discretion to request substantiating documentation (e.g., loan documents) supporting the application for an updated title. This does not include transfers of a financed motor vehicle to a co-signer.

96-254
(3/2026)