Donating motor vehicles
You owe use tax on the cost of the motor vehicle if you remove a motor vehicle from your inventory and donate it to an organization as a gift or prize. Use tax is due on the wholesale book value of the motor vehicle if you can’t determine cost. Write your sales tax permit number on the title transfer to show you’ll pay use tax on the donation. Pay use tax with the return for the period in which you make the donation.
Temporarily loaning or donating motor vehicles
You owe use tax on the motor vehicle if you temporarily loan a motor vehicle from inventory to an individual, government, business, or nonprofit entity. Calculate the use tax you owe in one of two ways:
- On the full purchase price of the motor vehicle
- On the fair market rental value for the time you loaned the motor vehicle, whether loaned on an hourly, daily, weekly, monthly, or other basis.
- The fair market rental value of a motor vehicle is $300/month, and you loan it to a performing arts company for three months’ use by its resident artists. Use tax is due on $900.
- The fair market rental value of a motor vehicle is $500/month, and you loan it to a sports organization for use during a two-week event. Use tax is due on $250 (1/2 of a month).
The only exception is when you temporarily donate a motor vehicle to a driver education program sponsored by a qualified nonprofit school.
- The fair market rental value of a motor vehicle is $300/month, and you loan it to a qualified nonprofit school’s driver education program. No use tax is due. This is the only exemption for motor vehicle donations or loans.