Free Minnesota Gift Bill of Sale
A vehicle gift between family members in Minnesota may be exempt from the 6.875% Motor Vehicle Sales Tax, which can represent thousands of dollars in savings on a higher-value vehicle. Confirm with DVS which relationships qualify and how to claim the exemption on the title application (Form PS2000). Be aware that the recipient will still owe Minnesota's annual registration tax (the tab renewal fee) each year, which is calculated separately from the sales tax.
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Gifting a vehicle to a family member is a zero-dollar transfer, but the DMV still needs a bill of sale to process the title change. Our guide explains how the bill of sale and title work together and what recipients must show to claim the family-gift tax exemption. Read: Bill of Sale vs Title: What's the Difference? →
Minnesota Gift Bill of Sale — What You Need to Know
Primary Form
Standard bill of sale
Agency
Minnesota DVS
Minnesota Driver and Vehicle Services, Department of Public Safety
Primary ID Field
VIN
Sales Tax
0%
Title Required
Yes
Inspection
Not required
Inspection Requirements
No statewide safety or emissions inspection required
Minnesota Gift Sale — Step-by-Step Checklist
- Confirm the donor holds a clean Minnesota title — obtain a lien release if the vehicle was financed
- Prepare a bill of sale showing $0 and the donor's relationship to the recipient
- Complete Form PS2000 (Minnesota Title Application) and ask DVS how to document the gift and the family relationship
- Record the odometer reading on the title assignment section as required by federal law
- Submit the signed title and PS2000 to a DVS exam station or deputy registrar within 20 calendar days after the title is assigned
- Pay the standard title transfer fee and any applicable registration tab fees
- Obtain Minnesota auto insurance in the recipient's name before operating the vehicle
Common Pitfalls
- Missing the 20-calendar-day transfer deadline results in suspension of the vehicle registration
- Not documenting the gift and relationship the way DVS requires — without a valid exemption, the full 6.875% Motor Vehicle Sales Tax applies
- The recipient must still pay the annual Minnesota registration tax at renewal — this is separate from the sales tax exemption
- Gifts to step-siblings or in-laws may not qualify; verify the exact relationship against DVS guidelines before proceeding
- An out-of-state title requires the donor to obtain a Minnesota title first before a gift transfer can be processed
Minnesota Gift Bill of Sale — FAQs
Is there any cost savings beyond avoiding the 6.875% Motor Vehicle Sales Tax?
The exemption covers only the one-time Motor Vehicle Sales Tax. The recipient still owes the annual registration tab fee, which in Minnesota is based on the vehicle's value and age.
Can the transfer be done by mail?
Some deputy registrar offices accept mail-in title transfers with properly executed documents. Contact your local DVS exam station to confirm their process before mailing original documents.
What counts as 'immediate family' in Minnesota?
Check current DVS guidance before the transfer: Minnesota law sets which relationships qualify for a tax-exempt gift, and step-relatives or in-laws may not qualify.
Does Minnesota require a smog or safety inspection for gifted vehicles?
No. Minnesota has no statewide vehicle safety or emissions inspection program, so gifted vehicles do not require inspection before or after the title transfer.