To gift a car in Tennessee without paying sales tax, the donor must properly sign over the title and both parties must complete the state’s Affidavit of Non-Dealer Transfer (Form RV-F1301201). The recipient then submits these, along with a small title fee, to their county clerk’s office for registration. This process is straightforward for qualifying family gifts, bypassing the standard sales tax calculation on the vehicle’s market value.
The core of the transfer is correctly handling the certificate of title. The donor (giver) must sign the title on the back in the designated seller/transferor section, printing the recipient's name and address. Crucially, in the sale price field, write "Gift" or "$0". Never use a nominal amount like "$1," as this can trigger the Tennessee Department of Revenue to assess sales tax based on the vehicle’s fair market value instead.
Simultaneously, you must complete the Affidavit of Non-Dealer Transfer (Form RV-F1301201). This single-page document is essential for claiming the gift tax exemption. Both the donor and recipient must fill out their sections, providing personal details and the vehicle information. By signing this affidavit, you certify under penalty of perjury that the transfer is a bona fide gift with no consideration paid, which legally exempts the transaction from state sales tax.
This sales tax exemption is specifically for transfers between eligible family members. According to Tennessee guidelines, this includes spouses, parents, children, siblings, grandparents, and grandchildren. Transfers to more distant relatives, such as aunts, uncles, cousins, or non-family members, do not qualify for the automatic exemption and may be subject to tax based on the vehicle’s value.
While sales tax is waived, the recipient is responsible for state and county title transfer fees. The base title fee is $11, but local county fees are added. For example, in Davidson County, the total is approximately $26. If the recipient also needs a new license plate, standard registration fees will apply on top of this. These fees are due at the time of submission to the county clerk.
The required documentation package for the county clerk includes: the properly signed original title, the completed and notarized Affidavit of Non-Dealer Transfer (Form RV-F1301201), a valid photo ID for both parties (or the recipient if the donor is not present), and proof of Tennessee insurance for the recipient. If the vehicle is less than 10 years old, a current odometer reading must be recorded on the title. Residents in certain counties like Davidson, Hamilton, Rutherford, Sumner, Williamson, or Wilson must also provide a valid vehicle emissions test certificate.
If there was an outstanding loan on the vehicle, the lien must be satisfied and the lien holder must provide a formal lien release before the title can be signed over. The Tennessee Department of Revenue also notes that while state sales tax is exempt, the gift may have federal gift tax implications if the vehicle’s value exceeds the annual exclusion amount ($18,000 for 2024, $18,000 for 2025). This typically only concerns very high-value vehicles.
| Step | Key Action | Responsible Party | Note |
|---|
| 1. Prepare Title | Sign back, enter recipient info, write "Gift" in sale price. | Donor | Must be original title; odometer reading required for vehicles < 10 yrs old. |
| 2. Complete Affidavit | Fill out Form RV-F1301201 in full. | Both Donor & Recipient | Must be notarized; certifies gift for tax exemption. |
| 3. Gather Documents | Collect signed title, affidavit, IDs, proof of insurance. | Recipient | Check county-specific requirements for emissions testing. |
| 4. Submit & Pay Fees | Visit local County Clerk’s office. | Recipient | Pay title fee (~$11 + county fees) and any registration costs. |
The process is designed to be efficient. Most county clerks can process the transfer during a single visit if all documents are correctly prepared. The key is meticulous attention to the affidavit and title details to ensure the tax exemption is properly applied, saving potentially hundreds or thousands of dollars in unnecessary sales tax.
