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‘Ask Evan’: “Do I have to pay PA sales tax on a gifted car?”

This week's 'Ask Evan' question  deals with sales tax on cars given as gifts to relatives.

Nathalie O asks. "My mother lives in Maryland and has gifted me her car.  She did pay sales tax on the original purchase.  When I title the vehicle in PA, I was told if I complete the gift form, the state will compute the value of the vehicle based on the blue book.  Is this true?  If so, I would rather just give them a price that is lower than blue book.  Can you help me figure out if it is tax exempt?"

Yes, your mother can give you a car and you won't have to pay Pennsylvania sales tax. That is, as long as you go through the proper procedures and fill out the proper gift exemption paperwork.

You and your mother will have to sign the title and turn it in to PennDOT when you apply for a Pennsylvania title and tag.   At that time you'll declare that it is a gift, and no sales tax should be collected at the time-- no matter the blue book value of the vehicle.

However, some time later you will get a letter form the PA Department of Revenue asking for proof that sales tax was paid originally to a reciprocal state.  You'll also have to provide proof that the vehicle was given as a gift and was not sold.

If you have a question you'd like to ask send me an email at AskEvan@FOX43.com.  Put 'Ask Evan' in the subject line.  You can also reach out to me on Facebook at Evan Forrester FOX43.  Whatever the topic I'll do my best to track down answers you are looking for.

 

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