Do I Have to Pay Tax on a Car That Is a Gift in Ohio?

Ohio Tax Law

Ohio tax law does not require gift recipients to pay sales tax on the value of their vehicles. Federal tax law exempts recipients from paying taxes on their gifted vehicles as well. However, if you receive a vehicle as a gift, you will still have to pay all of the applicable title and registration fees, and taxes may apply to the person who gave you the gift.

Title Transfer

The process of obtaining a title for your gifted vehicle is very similar to the process of transferring any vehicle's title. You must appear before a notary public with the previous owner to sign and date the title. The owner will also give you the bill of sale at this time, which should indicate that the vehicle was a gift. Once you have all of the necessary documents, you can take them to the County clerk of courts and apply for a title. As of 2011, the fee for a new title is $15.

Federal Gift Tax

Your car's donor may have to pay taxes to the federal government depending on the value of the car and whether he has given you other gifts during the year. As of 2011, individuals will pay a federal gift tax if the total value of gifts to a recipient exceeds $13,000. A married couple will pay taxes if the value of gifts to a recipient exceeds $26,000. The gift tax does not apply to gifts given to a spouse or political organization.

Considerations

Though you will not typically pay taxes on a gifted vehicle, the person who gave it to you might be taxed. In certain circumstances, you may be able to arrange to pay the tax yourself. Even if you don't receive the vehicle free, the gift tax may still apply in situations where the price paid is less than the vehicle's fair market value.