Chapter 11. Tax Exemptions Gift Tax Exemption for Vehicles Purchased for $1 or less (RMV Update) Sales Tax Rule - a vehicle received by a customer as a gift is exempt from sales tax. To qualify as a gift, the Bill of Sale or Title may not list a sales price of more than $1. * If $1 is listed on the Bill of Sale or the back of the Title and the vehicle was intended as a gift, the vehicle is tax exempt and Gift Form MVU-24 should be used. * If more than $1 is listed on the Bill of Sale or the back of the Title, sales tax must be collected in the normal fashion (6.25% of the sales price or the NADA average trade-in value, whichever is greater). Note: The gift tax exemption is generally only applicable to vehicles transferred among individuals. An exemption would be a vehicle donated by charitable organizations to a person outside of the organization; this would qualify for the gift tax exemption. A Corporation cannot give or receive a vehicle as a gift. Request for Abatement if the back of the title lists a sales price of more than $1, then a gift exemption will not be allowed and the customer will be instructed to file an application for abatement with DOR if he/she wants to dispute the tax paid. 06/13