Texas Amends Taxation of Motor Vehicle Gifts

Effective September 1, 2009, the $10 tax imposed on the recipient of a gift of a motor vehicle only applies if 1) the gift is received from the recipient’s spouse, parent, stepparent, grandparent, grandchild, child, stepchild, sibling, guardian, or a decedent’s estate; or 2) the recipient is exempt from federal income taxation as an exempt organization that will use the vehicle for the organization’s purposes. All other transactions in which a motor vehicle is transferred without payment of consideration do not qualify as gifts and will be treated as ordinary sales.

Also effective September 1, 2009, the principal parties involved in the transference of a motor vehicle as a gift must make a notarized joint statement describing the nature of the transaction and the relationship between the parties. (H.B. 2654, Laws 2009, effective September 1, 2009)

Posted on September 1, 2009