Vehicle transfer taxes and fees

What it means

Every state charges something to issue a new certificate of title, and most charge a separate registration fee on top of it.

Sales or use tax is a different question. Many states exempt a transfer to a surviving spouse or an heir, and several exempt any transfer where no money changes hands — but the exemption usually has to be claimed on the form rather than applied automatically.

Some states also levy an excise, usage or highway-use tax measured on the vehicle's value rather than on the price paid.

Why it matters

The exemption is the part that costs money when it is missed. A family that pays tax on an inherited vehicle because nobody ticked a box will not usually be refunded.

The total also decides whether transferring a low-value vehicle is worth doing at all, which is a real question for a car the family intends to scrap.

When you are likely to meet it

• When completing a title transfer after a death.
• When a counter quotes a figure nobody expected.
• When deciding whether to transfer or to sell a vehicle from the estate.

How this varies by state

What is charged, what is exempt, and whether the exemption must be claimed on the form are all set by state law.

Related terms

• Bill of saleA written record that ownership of something passed from one person to another, with the date, the parties and the price.
• Certificate of titleThe state-issued document that proves who owns a vehicle — and whose issuing state decides the procedure after a death.
• Fair market valueWhat a willing buyer would pay a willing seller, neither under pressure and both knowing the facts.
• License plate transferWhat happens to the plates when a vehicle changes hands — which depends on whether the state ties them to the car or the owner.
• Motor vehicle agencyThe state office that issues titles and registrations. It goes by a different name and a different set of initials in almost every state.
• RetitlePutting an asset into a new owner's name on the official record.
• Title applicationThe form that asks a state to issue a certificate of title in a new name. It is the central document in almost every vehicle transfer.
• Vehicle registrationPermission to use a vehicle on public roads. It is renewed periodically and is not the same as the title.

Sahvelo guidance that uses this

• Vehicle title transfer