The short answer
In many states a car from a close relative is tax-free or taxed at a small flat amount, but only for the relationships your state lists, and sometimes only if it's a gift. Here is how the four largest states we cover handle it in 2026:
| State | Tax on a family transfer | Who counts as family | Form |
|---|---|---|---|
| California | $0 use tax (purchase or gift) | Parent, grandparent, child, grandchild, spouse or registered domestic partner; siblings only if both are minors | Proof of relationship (birth or marriage certificate, adoption papers) and the title |
| Texas | $10 gift tax, gifts only | Spouse, parent or stepparent, grandparent, grandchild, child or stepchild, sibling (in-laws count in these groups), guardian, a decedent's estate; also 501(c)(3) nonprofits | Form 14-317, signed by both, notarized |
| New York | $0 sales tax (purchase or gift) | Spouse, parent, child, stepparent, stepchild | Form DTF-802 |
| Illinois | $15 flat tax | Spouse or civil union partner, parent, brother, sister, child (including adopted) | Private party vehicle use tax return; the $15 rate is on the 2026 RUT-5 chart |
California
If you buy a car from a qualifying family member who isn't in the business of selling cars, no use tax is due. Qualifying: parent, grandparent, child, grandchild, spouse or registered domestic partner, and a brother or sister only if the sale happens while both of you are minors. Stepparents and stepchildren don't qualify unless there is a natural parent or child involved or a legal adoption, and transfers between ex-spouses after a divorce decree don't qualify.
A true gift from anyone is also free of use tax, as long as you gave nothing in return: no cash, no trade, no services and no taking over the loan. The DMV may register the car without tax and CDTFA may ask for proof later, so keep the documents.
Texas
Texas has no family discount on a sale. The $10 gift tax applies only when no money changes hands and the giver is a spouse, parent, stepparent, grandparent, grandchild, child, stepchild, sibling (in-laws count in those groups), guardian or a decedent's estate, or when a 501(c)(3) nonprofit gives or receives the car. Both people complete Form 14-317, Affidavit of Motor Vehicle Gift Transfer, and it must be notarized (or witnessed by a county tax office employee).
The Comptroller's rules give no family rate for a sale, so if a relative sells you the car it is taxed like any private sale: 6.25% of the price, or of 80% of the standard presumptive value if you paid less. See our Texas car sales tax guide.
Worked example: a $12,000 used car from your father in Texas
| As a gift (no payment, Form 14-317) | $10.00 |
| As a sale for $12,000 (6.25% × $12,000), if $12,000 is at least 80% of the standard presumptive value | $750.00 |
New York
A purchase or a gift from your spouse, parent, child, stepparent or stepchild owes no sales tax; you claim it on Form DTF-802 when you register. Siblings, grandparents and grandchildren are not on the list, so a sale between them is taxed at the buyer's local rate, and a gift to anyone outside the list needs the giver to complete the gift section of the form.
Illinois
Illinois replaces the Private Party Vehicle Use Tax with a flat $15 when the car is transferred or bought from your spouse (or civil union partner), parent, brother, sister or child, including adopted children. Step-relatives, in-laws, grandparents and grandchildren don't qualify; they pay the normal chart amount by price and age. An estate gift to a surviving spouse is $0, and an estate gift to any other beneficiary is $15.
What this guide doesn't cover
Other states have their own lists and amounts; check your state page or tax agency. In California, taking over the seller's loan counts as payment, so the car is not a gift. Rules for businesses and dealers are different.
Frequently asked questions
Can I sell my car to my son for $1 to avoid tax?
In California and New York a sale to your child is already tax-free. In Texas a $1 sale is still a sale, taxed on at least 80% of the car's standard presumptive value unless an appraisal shows less; a real gift on Form 14-317 costs $10. In Illinois a transfer to your child is $15 either way.
Do siblings count as family for car sales tax?
In Texas and Illinois, yes. In New York, no. In California, only if both of you are minors at the time of the sale.
Is a car from my grandparent tax-free?
In California yes, and in Texas a gift from a grandparent is $10. In New York and Illinois grandparents are not on the family list.
Do I still pay registration and title fees?
Yes. The family rules only change the tax. Use your state's calculator for the fees.
Run the numbers
- CDTFA – Tax Guide for Purchasers of Vehicles (gifts, family transactions)
- Texas Comptroller – Motor Vehicle Taxes FAQ (gift tax, Form 14-317)
- Texas Comptroller – Motor Vehicle Sales and Use Tax
- NY DMV – Sales tax on vehicle purchases (DTF-802)
- NYS Tax Department – Form DTF-802 (5/15), Statement of Transaction
- Illinois Department of Revenue – Form RUT-5 (R-12/25), Private Party Vehicle Use Tax Chart for 2026
General information, not tax or legal advice. Fees and tax rules change; confirm with the agency listed before you pay.