How did Texas historically tax a vehicle gifted from Ohio and an even trade between Texas and out-of-state titled vehicles?

Plain-English summary

The 1964 letter gave two historical answers: a Texas recipient of a vehicle gifted by an Ohio resident owed a stated $10 gift tax, and a Texas resident receiving an out-of-state vehicle in an even trade owed a stated $5 even-trade tax when obtaining Texas title.

The gift was not subject to new-resident tax because that tax applied when a person bought a vehicle while living in another state, later moved to Texas, brought the vehicle along, and registered it here.

For the even trade, the Comptroller reported that the out-of-state owner did not need to obtain Texas title before exchanging vehicles with the Texas resident. The county tax assessor-collector collected the even-trade tax when the Texas resident titled the received vehicle.

Gift-tax answer superseded

STAR expressly marks the gift-tax issue partially superseded. H.B. 2654, enacted in the 81st Regular Legislative Session, amended Texas Tax Code Chapter 152 to limit motor vehicle gift tax to a specified group of individuals or entities, effective September 1, 2009. The source's $10 answer is therefore historical, not current guidance.

STAR's status does not identify the even-trade issue as superseded, but its $5 amount and 1964 title procedure still require current-law verification.

What this means for you

Vehicle gifts

Do not rely on this letter's gift-tax result. Current eligibility depends on the post-2009 statutory relationship or entity rules.

Interstate even trades

The historical answer allowed the out-of-state party to trade without first obtaining Texas title, while the Texas recipient paid tax on Texas titling.

New residents

The letter distinguished a gift to an existing Texas resident from a vehicle brought by its owner when moving to Texas.

Common questions

Q: Is the $10 gift-tax answer current?
A: No. STAR marks that issue superseded.

Q: What law caused the supersession?
A: H.B. 2654, effective September 1, 2009.

Q: What did the 1964 letter say about an even trade?
A: The Texas resident paid a stated $5 tax when obtaining Texas title.

Citations and references

• Texas H.B. 2654, 81st Leg., R.S. — limited the motor vehicle gift-tax category
• Texas Tax Code ch. 152 — amended effective September 1, 2009 according to STAR's supersession notice

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/6405L2012E11

Original ruling text

STAR SUPERSEDED INFORMATION
Accession No. -
Supersede type - partial
Document superseded on - 5/20/2013
Issue(s) that caused the document to be superseded - Motor vehicle gift tax
Reason(s): Statutory change - House Bill 2654, 81st Regular Legislative
Session amended Texas Tax Code Section 152 to limit the motor vehicle gift
tax to a limited group of individuals or entities. (Effective Sept. 1, 2009)

MAY 21, 1964

Tax Assessor Collector
Nueces County
Corpus Christi, Texas

Dear ***:

In your letter of May 15, you submitted the following questions:

"1. A party living in Corpus Christi has been GIVEN a car by a
party living in Ohio and registered in that State. Should the use
Tax, New Resident or Gift Tax apply?

2.
Can there be an Even Trade consummated between two vehicles
where one with a Texas Title be traded for one with an Out of State
Title?"

In answer to question 1, you are advised that the gift tax of
$10.00 should be collected from the person who is a resident of
Corpus Christi, Texas, who was given a motor vehicle by a person
residing in the State of Ohio. The new resident tax should only
be collected from a person the while a resident of another State
purchases a motor vehicle and later moves to Texas to reside and
brings the motor vehicle with him and registers it in this State.
In obtaining information to answer question 2, we called the
Texas Highway Department and was advised that the out of State
person who owned a motor vehicle that he traded even for another
motor vehicle from a person who resides in Texas does not have
to obtain a Texas title before making an even trade for another
motor vehicle to a resident of this State. Therefore, the County
Tax Assessor Collector should collect the even trade tax of
$5.00 from the Texas resident when he obtains a title on the
motor vehicle he received through an even trade from the person
who resided out of the State.

Yours very truly,

Robert S. Calvert
COMPTROLLER OF PUBLIC ACCOUNTS