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.
Notes
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