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.
The $10 gift tax is due when a motor vehicle is transferred between eligible family members for no consideration.
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 an ineligible family member. The transaction does not qualify as a gift under Tax Code Section 152.025, Tax on Gift of Motor Vehicle, and the motor vehicle is not exempt as community property. 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 (except for a community property transfer between spouses). 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.
No motor vehicle tax is due in the following two situations:
- Transfer of a motor vehicle held as community property between spouses.
- Transfer of a motor vehicle from two co-owners to one owner, provided no consideration is given.