18 Jul How to mark the sales tax when you gift a car

Q. I am giving my granddaughter my 20-year-old car. She will be a high school senior in September and the car is only to get her through this year before setting off for college in September 2020. The title transfer requires a sales amount on which New Jersey sales tax would apply. Since this is zero, what amount would be assessed?
— Grandparent

A. We hope your granddaughter is grateful for her new wheels.

Because you are gifting the vehicle, there is no sales tax due on the transaction.

To claim your exemption, on the back of the title where it asks for the purchase price, you should write “gift,” said Gail Rosen, a Martinsville-based certified public accountant.

“Besides that, you follow all the normal steps when transferring a car which includes completing the back of the title and including all pertinent information,” she said. “Make sure to take off your license plate and return it to Motor Vehicles.”

You can learn more about those steps here from the Motor Vehicle Commission.

Email your questions to .

This story was originally published on July 18, 2019.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.