Can You Gift a Car in Florida and Not Pay Taxes?
Learn the specific state requirements for gifting a car in Florida to avoid sales tax, and understand how the process differs from federal gift tax rules.
Transferring ownership of a vehicle in Florida often involves a tax liability for the new owner. However, a specific exemption exists that allows a car to be gifted without incurring the state’s sales tax. This process requires a clear understanding of the state’s rules to ensure the transfer qualifies as a genuine gift.
Florida Sales Tax Exemption for Gifted Vehicles
Florida provides a sales and use tax exemption for a motor vehicle transferred between individuals as a gift. The requirement is that the vehicle must be given without any form of payment or “consideration.” This means nothing of value can be exchanged for the vehicle, including money, services, or the recipient assuming an outstanding loan.
If the person receiving the car agrees to take over loan payments, the state no longer views it as a gift. In this scenario, sales tax would be due on the amount of the outstanding lien being assumed. The transfer must be completely gratuitous to be exempt from the 6% state sales tax and any applicable local sales surtaxes.
This exemption does not apply to other transfers. In an “even trade” where two individuals swap vehicles, sales tax is due from each person on the fair market value of the vehicle they received. Any transfer involving a corporation or between two businesses is also presumed to involve consideration and is therefore taxable.
Preparing for the Title Transfer
Both the giver and the recipient must prepare several documents. The person gifting the car must complete the “Transfer of Title by Seller” section on the original Certificate of Title. This includes signing it over to the new owner and entering the recipient’s name and address, the transfer date, and the odometer reading.
The recipient must secure proof of valid Florida auto insurance before the title can be transferred into their name. This can be an insurance card or a policy binder, but it must clearly state it is a Florida policy.
A sworn statement affirming the vehicle is a gift is also required. This declaration is made on the Application for Certificate of Title, which has a sales tax exemption section. Both parties must certify under penalty of perjury that the transfer is a gift and no payment was exchanged, and this application should be completed before visiting the service center.
Completing the Transfer at the Tax Collector’s Office
The recipient can finalize the transfer at a local county tax collector’s office or licensed private tag agency. To complete the process, the recipient must submit:
- The original title signed by the giver
- The completed Application for Certificate of Title containing the gift affidavit
- Proof of Florida insurance
- Valid identification
Because the sworn affidavit certifies the transfer as a gift, the 6% Florida sales tax and any local taxes are waived. However, the new owner is still responsible for paying standard government fees. These include the title transfer fee to issue a new certificate of title and the vehicle registration fee.
After the fees are paid, the office will provide a receipt, a new license plate if one is being issued, and the vehicle registration. The new paper title is mailed by the FLHSMV from Tallahassee and arrives within a few weeks.
Understanding Federal Gift Tax Rules
Separate from Florida’s sales tax, individuals must be aware of federal gift tax regulations. This tax is imposed by the IRS on the person giving the gift, not the recipient. For most vehicle gifts, this tax is not a concern due to the annual gift tax exclusion, which for 2025 allows an individual to give up to $19,000 to any person without tax consequences.
If the car’s fair market value exceeds this amount, the giver is required to file a gift tax return using IRS Form 709. Filing this form does not automatically mean taxes are owed, as the amount exceeding the annual exclusion is simply deducted from the giver’s lifetime gift tax exemption. For 2025, this exemption is $13.99 million for an individual.
A person would only pay an out-of-pocket gift tax if their cumulative lifetime gifts exceed this substantial exemption. For most people gifting a car, its value will fall below the annual exclusion, making the federal gift tax a non-issue. It is primarily a consideration for those gifting high-value luxury or classic cars.