us-tx/regs
34 Tex. Admin. Code § 3.80 — Motor Vehicles Transferred as a Gift or for No Consideration
(a)
Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Appraisal--A written statement independently and impartially prepared by a qualified appraiser employing generally accepted appraisal methods and techniques, in a narrative format or on a form chosen by the appraiser, setting forth an opinion as to the current fair market value of an adequately described motor vehicle and any accessories or equipment that may be affixed to the motor vehicle. The appraisal must be sufficiently descriptive to enable a third party to readily ascertain the estimated value of the vehicle and the rationale for that estimate.
(2) Book value--The value, in dollars and cents, of a motor vehicle on the owner's books and records at the time the vehicle is transferred based on General Accepted Accounting Principles (GAAP).
(3) Child--The biological son or daughter of a parent or parents; or the son or daughter of a parent or parents by virtue of legal adoption; or the son or daughter of a parent who, pursuant to Family Code, Chapter 160, is presumed to be a biological parent, has executed an acknowledgment of parenthood or has been adjudicated to be a biological parent by court decree. The term "child" includes a child in the care of a foster parent as that term is defined in this subsection and the spouse of a child as herein defined.
(4) Community property--All property, both real and personal other than separate property, acquired by the husband or wife during marriage. All property acquired during a marriage by either spouse is presumed to be community property.
(5) Common-law marriage--An informal marriage where a man and woman have agreed to be husband and wife, are presently living together in Texas as husband and wife, and who hold themselves out to the public in Texas as being husband and wife. Every marriage entered into in Texas is presumed to be valid unless expressly void by statute.
(6) Consideration--The amount paid or to be paid for a motor vehicle, valued in money, as prescribed in Tax Code, §152.002, or anything of monetary value including but not limited to cash or the equivalent, a book entry reflecting cash received or paid, the forgiveness or assumption of debt, book entries reflecting accounts receivable or accounts payable for an item, or issuance of stock when stock ownership in the subsidiary is less than 100%. Consideration does not include any amount equal to less than 10% of a motor vehicles current appraised fair market value at the time of transfer.
(7) Dealer--A person who holds a license to sell motor vehicles issued pursuant to Transportation Code, Chapter 503, Subchapter B, or under similar regulatory requirements of another state. The term "dealer" includes a dealer that holds a franchised dealer's license issued pursuant to Occupation Code, Chapter 2301, for a particular make of new motor vehicle, an independent dealer licensed to sell motor vehicles other than new motor vehicles, a wholesale motor vehicle dealer, an independent mobility motor vehicle dealer, a wholesale auction dealer, a motorcycle dealer, a trailer or semitrailer dealer, including house or travel trailers, an independent mobility dealer, or any other dealer as provided by Transportation Code, Chapter 503, Subchapter B. The term "dealer" does not include a drive away operator or a salvage vehicle dealer licensed pursuant to Occupation Code, Chapter 2302.
(8) Decedent's estate--The real and personal property of a deceased person subject to distribution by will or the laws of descent and distribution. The term includes property held in joint tenancy or joint ownership with a right of survivorship.
(9) Foster parent--A person who under the authority of a governmental agency, or a private adoption or foster care agency provides foster or substitute care as defined in Tax Code, §700.1301, for a child who is currently under the care of said foster parent in their home.
(10) Grandchild--The child of one's son or daughter by birth or legal adoption. The term "grandchild" includes a step-grandchild and the spouse of a grandchild as herein defined.
(11) Grandparent--The father or mother of a child's parent or parents either by birth or legal adoption. The term "grandparent" includes a step-grandparent and the spouse of a grandparent as herein defined.
(12) Guardian--A person appointed by a court to have the legal authority over and care of the real and personal property or the person of a minor or a incapacitated person as evidenced by a certificate of guardianship or letters of guardianship. The term "guardian" includes a general, limited, temporary or successor guardian, a guardian of a local, county or regional guardianship program, or a certified public guardian or certified private professional guardian in the business of providing guardianship services. The term "guardian" does not include a guardian ad litem appointed to represent an incapacitated person in a guardianship proceeding.
(13) Motor vehicle--A self-propelled vehicle designed to transport persons or property upon the public highways and a vehicle designed to be towed by a self-propelled vehicle while carrying property. The term "motor vehicle" includes, but is not limited to, automobiles, motor homes, motorcycles, trucks, truck tractors, trailers, semitrailers, house or travel trailers, trailers sold unassembled in a kit, dollies, jeeps, stingers, auxiliary axles, converter gears, and truck cab/chassis. A unit that meets the definition of a "motor vehicle" does not lose its identity as a motor vehicle if tangible personal property is added to the vehicle allowing the unit to perform a specialized function but prohibiting the vehicle from transporting separate property or persons other than the driver. An example of such a vehicle would be a truck cab/chassis upon which oil well servicing equipment is attached.
(14) Parent--The biological mother or father of a child, or the mother or father of a child by virtue of legal adoption, or a person who, pursuant to Family Code, Chapter 160, is presumed to be a biological parent or has executed an acknowledgment of parenthood or has been adjudicated to be the biological parent by court decree. The term "parent" includes foster parent as that term is defined in this subsection and the spouse of a parent as herein defined.
(15) Separate property--Any property, both real and personal, owned by a spouse before marriage, or acquired during the marriage by gift, devise, or descent.
(16) Sibling--One of two or more individuals having one common parent by birth, legal adoption or marriage. The term includes brother, sister, half-brother, half-sister, step-brother or step-sister, brother in-law or sister in-law.
(17) Spouse--A person to whom one is legally married as husband or wife either by formal ceremony or by common-law pursuant to Family Code, Title 1, Subtitle A, or a comparable law of another jurisdiction.
(18) Standard presumptive value--The taxable value of a private-party transfer of ownership to a motor vehicle, as determined by §3.79 of this title (relating to Standard Presumptive Value).
(19) Stepchild--The biological or adopted child of one's current spouse from a previous marriage whose parent-child relationship is through marriage only and not by birth or adoption.
(20) Stepparent--The current spouse of a child's mother or father whose only relationship to the child is through marriage and not by birth or adoption.
(b)
Transfer of a motor vehicle as a gift. Effective September 1, 2009, a $10 gift tax is imposed on the recipient of a joint or undivided ownership interest in a motor vehicle for no consideration as follows:
(1) The transfer of a motor vehicle to a recipient from a parent, step-parent, grandparent, step-grandparent, child, stepchild, grandchild, step-grandchild, foster parent, sibling, or guardian.
(2) The transfer of a motor vehicle from a spouse when the vehicle is the separate property of the spouse, such as a motor vehicle owned by a spouse prior to marriage. A motor vehicle acquired by a spouse after marriage is presumed to be community property and not subject to either gift tax or motor vehicle sales and use tax when title is transferred between husband and wife.
(3) The transfer of a motor vehicle from a decedent's estate to the lawful devisees or heirs by will or by the laws of descent and distribution, including a motor vehicle transferred to:
(A) the surviving owner or owners of a motor vehicle owned jointly by two or more parties when there is a right of survivorship agreement signed by the joint owners on file with the Department of Motor Vehicles pursuant to Transportation Code, §501.031; or
(B) the representative of the decedent by the trustee of a trust which terminates upon the decedent's death.
(4) The transfer of a motor vehicle from or to a nonprofit organization that:
(A) obtains a determination letter or a group exemption ruling letter from the Internal Revenue Service (IRS) that states that the organization qualifies for exemption from federal income tax under Title 26, Internal Revenue Code, §501(c)(3);
(B) is organized and operated for:
(i) religious, charitable, scientific, literary, or educational purposes;
(ii) testing for public safety;
(iii) prevention of cruelty to children or animals; or
(iv) promotion of amateur sports competition; and
(C) uses the motor vehicle exclusively for the purposes for which the organization was established.
(5) To be a valid gift or transfer of title to community property between spouses, the principal parties to the transfer of a motor vehicle for no consideration must file, with the county tax assessor-collector, a properly completed Texas Affidavit of Motor Vehicle Gift Transfer, Form 14-317. A properly completed affidavit must conform to the requirements pursuant to subsection (f) of this section.
(c)
Transfer of a motor vehicle for no consideration, except for transfers involving a dealer. Effective September 1, 2009, the recipient of a joint or undivided ownership interest in a motor vehicle for no consideration that does not qualify as a gift pursuant to subsection (b) of this section or is not exempt from tax pursuant to Tax Code, Chapter 152, Subchapter E, is subject to sales and use tax. The amount on which the tax is computed is as follows:
(1) the standard presumptive value of the vehicle; or
(2) if there is no standard presumptive value for the vehicle, the recipient must provide a value for the vehicle to the tax assessor-collector by means of:
(A) documentation listing a minimum suggested sales price based on the condition of the vehicle at the time of transfer as provided by a nationally recognized motor vehicle value guide service or motor vehicle value guide publication; or
(B) an appraisal listing the fair market value of the vehicle at the time of transfer.
(3) Transfers of motor vehicles for no consideration that do not qualify as a gift include but are not limited to:
(A) A motor vehicle transferred between individuals, including, but not limited to aunts, uncles, nephews, nieces, cousins and unmarried couples.
(B) A motor vehicle transferred to or from a nonprofit organization that:
(i) is not exempt from federal income tax under 26 U.S.C., §501(c)(3);
(ii) is not exempt from motor vehicle sales and use tax pursuant to Tax Code, §152.087, relating to volunteer fire departments and emergency medical service providers exempt under 26 U.S.C., §501(a); or
(iii) is not exempt from sales and use tax pursuant to Tax Code, §152.088, relating to churches, and religious societies.
(C) A motor vehicle transferred between corporations, limited liability companies, partnerships and trusts; or between an individual and a corporation, limited liability company, partnership or trust.
(d)
Transfer of a motor vehicle to or from a dealer.
(1) The transfer of a joint or undivided ownership interest in a motor vehicle for no consideration from a dealer that is in business as a sole proprietor is subject to tax by the recipient of the vehicle based on the book value of the vehicle at the time of the transfer unless the transaction qualifies as a gift pursuant to subsection (b) of this section, or is exempt from tax pursuant to Tax Code, Chapter 152, Subchapter E.
(2) The transfer of a joint or undivided ownership interest in a motor vehicle for no consideration to a dealer that is in business as a sole proprietor is subject to tax by the dealer on the value of the vehicle pursuant to subsection (c)(2) of this section, at the time of the transfer unless the transaction qualifies as a gift pursuant to subsection (b) of this section, or is exempt from tax pursuant to Tax Code, Chapter 152, Subchapter E.
(3) The transfer of a joint or undivided ownership interest in a motor vehicle for no consideration from a dealer that is a corporation, limited liability company, partnership or trust is subject to tax by the recipient of the vehicle based on the dealer's book value of the vehicle at the time of the transfer, unless the transaction qualifies as a gift pursuant to subsection (b)(4) of this section, or is exempt from tax pursuant to Tax Code, Chapter 152, Subchapter E.
(4) The transfer of a joint or undivided ownership interest in a motor vehicle for no consideration to a dealer that is a corporation, limited liability company, partnership or trust is subject to tax by the dealer on the value of the vehicle pursuant to subsection (c)(2) of this section, at the time of the transfer, unless the transaction qualifies as a gift pursuant to subsection (b)(4) of this section or is exempt from tax pursuant to Tax Code, Chapter 152, Subchapter E.
(e)
Transfer of a motor vehicle as a prize. A joint or undivided ownership interest in a motor vehicle that is transferred to the winner of a contest or drawing, regardless of how the contest or drawing is held, is subject to sales and use tax as follows:
(1) A motor vehicle that is purchased by a contest sponsor and transferred directly from the seller of the vehicle to the contest winner is subject to tax based on the total consideration paid for the vehicle. The tax is the liability of the contest sponsor and is due and payable before the vehicle can be titled and/or registered.
(2) A motor vehicle that is transferred directly from the seller of the vehicle to a contest sponsor for consideration and the sponsor subsequently transfers the vehicle to the contest winner is subject to tax as follows:
(A) the sponsor owes tax on the total consideration paid for the vehicle to the seller; and
(B) the winner owes sales and use tax based on the taxable value pursuant to subsection (c) of this section, unless the transfer from the sponsor to the winner qualified as a gift pursuant to subsection (b)(4) of this section.
(3) The transfer of a motor vehicle directly from the owner of the vehicle to a contest sponsor for no consideration, and the subsequent transfer of the vehicle from the sponsor to the contest winner are both subject to tax pursuant to subsection (c) of this section unless:
(A) the owner of the vehicle is a dealer, then the sponsor owes tax based on the dealer's book value of the vehicle at the time of the transfer and the winner owes tax pursuant to subsection (c) of this section; or
(B) if the sponsor qualifies as a nonprofit organization pursuant to subsection (b)(4) of this section, then the $10 gift tax is due by both the sponsor and the winner.
(4) The transfer of a motor vehicle directly to the winner of a contest or drawing from a manufacturer or dealer of motor vehicles that sponsored the contest or drawing is subject to tax by the winner based on the manufacturer's or dealer's book value of the vehicle at the time of transfer.
(5) The transfer of a motor vehicle directly from a sponsor of a contest or drawing located outside of Texas to a winner who is a Texas resident or who is domiciled or doing business in Texas is subject to use tax by the winner pursuant to subsection (c) of this section if the vehicle is brought into Texas for use on the public highways of Texas unless:
(A) the sponsor is a manufacturer or dealer, then the winner owes tax on the manufacturer's or dealer's book value of the vehicle at the time of transfer; or
(B) the sponsor qualifies as a nonprofit organization pursuant to subsection (b)(4) of this section, then the $10 gift tax is due by the winner.
(f)
Documentation required for a gift of a motor vehicle. The principal parties to the transfer of a motor vehicle as the result of a gift or transfer of title to community property between spouses pursuant to subsection (b) of this section, must file comptroller's form 14-317, Texas Affidavit of Motor Vehicle Gift Transfer, with the tax assessor-collector of the county in which the Application for Texas Certificate of Title, form 130-U, is submitted.
(1) To be valid, the affidavit must be properly completed and contain the signatures of all principal parties to the transaction sworn to and subscribed before either:
(A) a notary public of Texas or the equivalent from some other state or jurisdiction; or
(B) a county tax assessor-collector or an employee of the county tax assessor-collector pursuant to Government Code, §602.002.
(2) the party or parties whose signature is being acknowledged must:
(A) be present and sign the affidavit in front of the tax assessor-collector or an employee of the county tax assessor-collector; or
(B) have a signed power of attorney from any absent party or the signature of the absent party must be formally certified pursuant to paragraph (1)(A) of this subsection.
(3) Pursuant to Tax Code, §152.062, the tax assessor-collector may examine each Texas Affidavit of Motor Vehicle Gift Transfer or Application for Texas Certificate of Title for their truth and accuracy. If the tax assessor-collector has reason to question the validity of the information in an affidavit or application for title, or if any material fact fails to meet the guidelines required by the Comptroller, the tax assessor-collector may request that any party to the affidavit or application for title furnish further substantiation for the information contained in the affidavit or application for title, including but not limited to documentation used to arrive at a taxable value, or proof of marriage, certified copies of birth certificates, decrees of adoption, baptismal records, court orders establishing paternity or voluntary admissions of paternity.
(4) Pursuant to Tax Code, §152.101, a person commits a felony of the third degree by signing an affidavit or application for title required by this section if he or she knows that it is false in any material fact.
Source Note: The provisions of this §3.80 adopted to be effective October 13, 2010, 35 TexReg 9104.
Source: official text