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Transferring Truck Ownership to Friend - Do I need to pay sales tax again?


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About a month ago I bought a used Ford F250 from a Ford dealer for a carpenter/handyman who has done work for my family for many years. He didn't have the money on hand to purchase it, so I paid for it and he's going to work it off over time. The dealer issued the title in my name. Once I received it from the state, I signed the title and transferred it to my carpenter and filed the notice of transfer with the state. I saw on the TXDMV site that there's also a form for Application for Texas Title and/or Registration where one notes the sales price and tax due (https://www.txdmv.gov/sites/default/files/form_files/130-U.pdf). I would have purchased the truck in my guy's name originally, but he is from a different country and didn't have the type of ID with him that the dealer needed. I live out of Texas and was handling the purchase over the phone. So it was easier just to put the truck in my name and later transfer it to my guy. 

I'm not, I think, selling the vehicle to him. I am exchanging it for his work. So my question is whether I need to submit this other form and pay tax on the "sale" to my guy? I paid $20k for the truck so, if I owe a sales tax, it would be $1,250 based on their 6.25% sales tax. Does filing the notice of title transfer form automatically transfer the registration to the transferee, or is the Application for Registration, which has the tax stuff, the only way to do so? 

 

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About a month ago I bought a used Ford F250 from a Ford dealer for a carpenter/handyman who has done work for my family for many years. He didn't have the money on hand to purchase it, so I paid for it and he's going to work it off over time. The dealer issued the title in my name. Once I received it from the state, I signed the title and transferred it to my carpenter and filed the notice of transfer with the state. I saw on the TXDMV site that there's also a form for Application for Texas Title and/or Registration where one notes the sales price and tax due (https://www.txdmv.gov/sites/default/files/form_files/130-U.pdf). I would have purchased the truck in my guy's name originally, but he is from a different country and didn't have the type of ID with him that the dealer needed. I live out of Texas and was handling the purchase over the phone. So it was easier just to put the truck in my name and later transfer it to my guy. 
I'm not, I think, selling the vehicle to him. I am exchanging it for his work. So my question is whether I need to submit this other form and pay tax on the "sale" to my guy? I paid $20k for the truck so, if I owe a sales tax, it would be $1,250 based on their 6.25% sales tax. Does filing the notice of title transfer form automatically transfer the registration to the transferee, or is the Application for Registration, which has the tax stuff, the only way to do so? 
 

Texas used to have the option of gifting a vehicle - but everyone was abusing that. I think they shifted to applying retail value for tax purposes and if that is true - you will have to pay the tax.
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2 hours ago, Handcruser said:


Texas used to have the option of gifting a vehicle - but everyone was abusing that. I think they shifted to applying retail value for tax purposes and if that is true - you will have to pay the tax.

Correct.  He has to pay it based on the blue book value or actual sale price.

Of course, you will actually pay, I suppose, but it's the buyer's obligation.

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Correct.  He has to pay it based on the blue book value or actual sale price.
Of course, you will actually pay, I suppose, but it's the buyer's obligation.
Not all good news for him, though. He will also report an equal amount as income for his taxes...
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