Free Arkansas Gift Bill of Sale
Gifting a vehicle to an immediate family member in Arkansas eliminates the 6.5% state sales tax — saving $1,300 on a $20,000 vehicle. Write "GIFT" as the sale price on the bill of sale and on the signed-over title, then complete the transfer at your local Arkansas DFA revenue office within 30 days. While a gift affidavit is not mandatory, including one with your paperwork provides a clear paper trail if the tax exemption is ever questioned.
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Arkansas Gift Bill of Sale — What You Need to Know
Sales Tax Details
Arkansas's 6.5% state sales tax is waived for vehicle gifts between immediate family members. A gift affidavit is not required by law but is strongly recommended to document the exemption.
Exemption: Immediate family gifts (parent, child, spouse) are exempt from Arkansas 6.5% state sales tax
Inspection Requirements
Arkansas does not require a statewide vehicle safety or emissions inspection at the time of a title transfer or registration.
Arkansas Gift Sale — Step-by-Step Checklist
- Sign the back of the existing Arkansas vehicle title over to the recipient, writing "GIFT" in the purchase price / consideration field.
- Prepare a bill of sale with the donor's and recipient's full legal names, vehicle year/make/model/VIN, the gift date, and "GIFT" as the stated consideration.
- Optionally prepare a simple gift affidavit signed by both donor and recipient (notarized is preferred) confirming the transfer is a bona fide gift between immediate family.
- Both parties bring valid government-issued photo ID to the local DFA revenue office.
- Submit the signed title, bill of sale, optional gift affidavit, and payment for the title fee to the DFA revenue office.
- The recipient must obtain new registration and license plates in their name at the same visit.
- Complete the transfer within 30 days of the gift date to avoid late title transfer penalties.
Common Pitfalls
- Writing $1 or another nominal amount instead of "GIFT" — Arkansas DFA may treat any non-zero price as the taxable sale amount and assess the 6.5% sales tax accordingly.
- Gifting to an extended family member (aunt, uncle, cousin, in-law) and assuming it is tax-free — the exemption applies only to parent, child, and spouse; others owe sales tax.
- Missing the 30-day title transfer window, which results in late fees and leaves the vehicle legally in the donor's name.
- Skipping the gift affidavit — while not required, its absence can complicate things if the DFA later audits the transaction and questions the tax-exempt status.
- Failing to update the vehicle's insurance to the recipient's name before driving it away.
Pro Tip
Writing "GIFT" clearly on both the title and the bill of sale, and completing the transfer at the DFA revenue office within 30 days, are the critical steps for a clean, tax-free Arkansas vehicle gift.