Transferring Truck Ownership to Friend - Do I need to pay sales tax again?

[Orale 1087]

About a month ago I bought a used Ford F250 from a Ford dealer for a carpenter/handyman who has done work for my family for many years. He didn't have the money on hand to purchase it, so I paid for it and he's going to work it off over time. The dealer issued the title in my name. Once I received it from the state, I signed the title and transferred it to my carpenter and filed the notice of transfer with the state. I saw on the TXDMV site that there's also a form for Application for Texas Title and/or Registration where one notes the sales price and tax due (https://www.txdmv.gov/sites/default/files/form_files/130-U.pdf). I would have purchased the truck in my guy's name originally, but he is from a different country and didn't have the type of ID with him that the dealer needed. I live out of Texas and was handling the purchase over the phone. So it was easier just to put the truck in my name and later transfer it to my guy. 

I'm not, I think, selling the vehicle to him. I am exchanging it for his work. So my question is whether I need to submit this other form and pay tax on the "sale" to my guy? I paid $20k for the truck so, if I owe a sales tax, it would be $1,250 based on their 6.25% sales tax. Does filing the notice of title transfer form automatically transfer the registration to the transferee, or is the Application for Registration, which has the tax stuff, the only way to do so? 

 

[Handcruser 2805]

About a month ago I bought a used Ford F250 from a Ford dealer for a carpenter/handyman who has done work for my family for many years. He didn't have the money on hand to purchase it, so I paid for it and he's going to work it off over time. The dealer issued the title in my name. Once I received it from the state, I signed the title and transferred it to my carpenter and filed the notice of transfer with the state. I saw on the TXDMV site that there's also a form for Application for Texas Title and/or Registration where one notes the sales price and tax due (https://www.txdmv.gov/sites/default/files/form_files/130-U.pdf). I would have purchased the truck in my guy's name originally, but he is from a different country and didn't have the type of ID with him that the dealer needed. I live out of Texas and was handling the purchase over the phone. So it was easier just to put the truck in my name and later transfer it to my guy. 
I'm not, I think, selling the vehicle to him. I am exchanging it for his work. So my question is whether I need to submit this other form and pay tax on the "sale" to my guy? I paid $20k for the truck so, if I owe a sales tax, it would be $1,250 based on their 6.25% sales tax. Does filing the notice of title transfer form automatically transfer the registration to the transferee, or is the Application for Registration, which has the tax stuff, the only way to do so? 
 

Texas used to have the option of gifting a vehicle - but everyone was abusing that. I think they shifted to applying retail value for tax purposes and if that is true - you will have to pay the tax.

[MissingInAction 25165]

You have to pay it.

[rage-a-holic 4445]

1 hour ago, Orale said:

About a month ago I bought a used Ford F250 from a Ford dealer for a carpenter/handyman who has done work for my family for many years. He didn't have the money on hand to purchase it, so I paid for it and he's going to work it off over time. The dealer issued the title in my name. Once I received it from the state, I signed the title and transferred it to my carpenter and filed the notice of transfer with the state. I saw on the TXDMV site that there's also a form for Application for Texas Title and/or Registration where one notes the sales price and tax due (https://www.txdmv.gov/sites/default/files/form_files/130-U.pdf). I would have purchased the truck in my guy's name originally, but he is from a different country and didn't have the type of ID with him that the dealer needed. I live out of Texas and was handling the purchase over the phone. So it was easier just to put the truck in my name and later transfer it to my guy. 

I'm not, I think, selling the vehicle to him. I am exchanging it for his work. So my question is whether I need to submit this other form and pay tax on the "sale" to my guy? I paid $20k for the truck so, if I owe a sales tax, it would be $1,250 based on their 6.25% sales tax. Does filing the notice of title transfer form automatically transfer the registration to the transferee, or is the Application for Registration, which has the tax stuff, the only way to do so? 

 

Does this carpenter also do roofing work?

[luke duke 6413]

Does this carpenter also do roofing work?

@El Techador

[TwiceHorn 31520]

2 hours ago, Handcruser said:

Texas used to have the option of gifting a vehicle - but everyone was abusing that. I think they shifted to applying retail value for tax purposes and if that is true - you will have to pay the tax.

Correct.  He has to pay it based on the blue book value or actual sale price.

Of course, you will actually pay, I suppose, but it's the buyer's obligation.

[woohorn 1131]

Correct.  He has to pay it based on the blue book value or actual sale price.
Of course, you will actually pay, I suppose, but it's the buyer's obligation.

Not all good news for him, though. He will also report an equal amount as income for his taxes...

[TwiceHorn 31520]

Actually, it's the greater of the sale price or 80% of the Standard Presumptive Value, which you can get here https://www.txdmv.gov/standard-presumptive-calculator

So you can figure out which is more advantageous.

[HOOKEM4 5040]

A friend...

[Quagmire 2147]

Sounds like you just pissed away an extra 1200

[CooterBrown 18022]

He could lease it from you for a dollar.

[conVINCEd 21469]

5 minutes ago, CooterBrown said:

He could lease it from you for a dollar.

Unless it involves one of your children, if it ain’t your car you don’t want your name on the title.

[closetohumping 17456]

@ROFL BOX

[closetohumping 17456]

@Born to Run

[Redneck Mutha 8007]

Just write it off.