Gifted cars are exempt from state taxes in Tennessee as long as you submit an Affidavit of Non-Dealer Transfers of Motor Vehicles with your $14 title transfer.
Written by Amber Reed Updated on Jan 31, 2024
To gift a vehicle in Tennessee , you’ll need to complete a $14 title transfer at your local Tennessee Vehicle Services Division (TVS) and submit an Affidavit of Non-Dealer Transfers of Motor Vehicles and Boats to receive exemption from the state vehicle sales tax.
QUICK LOOKIt’s best to involve your recipient in the car-buying and financing process if you plan on buying a new car as a gift in Tennessee.
You can gift a used car once it’s been released of any liens by heading to the TVS office with your recipient and completing a Tennessee vehicle title transfer.
Your gift recipient may also be responsible for a $29 flicense plate fee and purchasing car insurance per Tennessee’s minimum liability requirements. How to buy a car to give as a gift in TennesseeBefore you get started: You can’t transfer a vehicle title to a new owner while there’s an outstanding
on the vehicle unless you’ve involved your recipient in the financing agreements.Involving your gift recipient in the car-buying process when you purchase a brand new vehicle as a gift in the state of Tennessee has the following advantages:
Your recipient can test drive their new car before committing. Your recipient can sign their name directly to the new car title and vehicle registration.You can finance the car by having them cosign the loan , while you take the responsibility of paying it off.
If you want the gift to be a complete surprise : Your only option is to pay for the car in full under your own name. You can transfer the car title to the gift recipient for a $14.00 transfer fee as soon as your dealership mails your completed paperwork to the County Clerk’s office.
MORE: Three ways to remove a co-signer from a car loan How to gift a used car in Tennessee Gifting a used vehicle is cheaper than gifting brand-new one, but there are a few additional steps: Make sure there are no remaining car liens on the certificate of title. Submit an Affidavit of Non-Dealer Transfers of Motor Vehicles and Boats ( form RV-F1301201 ) to the Tennessee Department of Revenue for tax exemption.Complete the Tennessee title transfer at your local TVS office for a $14 fee, listing the sales price as $0.
Step 1: Negotiate terms with the recipientDecide with your gift recipient who will be responsible for the fees involved with a gifted vehicle. These typically include the following:
$14 title transfer fee $29 Tennessee license plate feeSales tax exemption: You won’t have to pay the Tennessee car sales tax as long as you submit the Affidavit of Non-Dealer Transfers of Motor Vehicles and Boats (
form RV-F1301201). However, you’ll need to pay a federal gift tax with the IRS if you’re gifting a brand new vehicle with a market value of $17,000 or more.
Once you’ve discussed those fees with your recipient, you should also make sure they’re aware of the long-term expenses related to car ownership such as repair and maintenance fees, fuel costs, and
car insurance Step 2: Record the gift with a bill of saleA bill of sale isn’t legally required in Tennessee, but it’s a good idea to have one on file in case there are any legal or financial disputes over the gifted vehicle.
