| (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 Cont'd... |
