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Can I sell my car to my spouse for $1 to avoid paying a sales tax?

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5 comments to “Can I sell my car to my spouse for $1 to avoid paying a sales tax?”

  1. Depends on your state. In NJ, I was able to transfer a vehicle from my husband’s name to mine simply by re-registering the car.

  2. In my state, California, you can transfer a vehicle to a spouse without paying sales tax.

  3. in California they ask for a min of a $50.00 of selling the car but yes u can use a dollar

  4. You can’t transfer title even to your spouse as long as there is an existing lien on the title. To transfer title, even to a spouse, you must clear the lien first. Until then, any tax issues are irrelevant.

    Some states allow a “gift transfer” and some do not. MO does, but TX does not, for example. In MO you could give your car to your spouse (or anyone else for that matter) and sign a gift affidavit and she’d pay no Use Tax. In TX however (ignoring the community property laws for now) the State collects the Use Tax based upon the higher of a “blue book” value set by the State or the sales price on the Bill of Sale. The only exception to the blue book valuation rule is if the vehicle is sold by a TX licensed auto dealer.

  5. You probably won’t pay sales tax on the transfer of title to your spouse, whether you “sell” it to her or just transfer title to her. But you’ll still have to pay the tax originally.

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