Section 280-RICR-20-70-28.15 - Gifts of Motor VehiclesA. Where a motor vehicle is purchased from an out of state retailer with the intent to gift it to a person that will store, use, or consume it within this state, then the tax applies. The donor will be required to pay the use tax at the current rate on the sale price charged to him or her by the out-of-state retailer, less any trade-in allowance where applicable, as a prerequisite to the donee's right to obtain registration plates.1. EXAMPLE: A husband and wife go to Massachusetts (MA) together. The husband buys a car from a MA dealer and the bill of sale indicates that he is the purchaser. While in Boston he gives the vehicle to his wife as a gift. The wife then attempts to register the vehicle in Rhode Island, claiming that because the vehicle was a gift to her it is tax exempt.
a. Neither R.I. Gen. Laws § 44-18-20 nor R.I. Gen. Laws § 44-18-21 requires that the wife be the purchaser. Moreover, her use of the motor vehicle is consistent with the definition of "storage" and "use" as set forth under R.I. Gen. Laws § 44-18-9 and R.I. Gen. Laws § 44-18-10. Thus the transaction is taxable.B. The residence of the donor and his or her relationship to the donee is immaterial in cases involving newly acquired vehicles (new or used) given to the donee for registration in Rhode Island. Any sales tax legally paid by the donor in the state of purchase may be credited against the Rhode Island use tax on such vehicle.C. Under the provisions of R.I. Gen. Laws § 44-18-25 there is a PRESUMPTION that: 1. The use of all tangible personal property is subject to the use tax; and2. All tangible personal property intended for delivery or that is delivered in this state is delivered for storage, use, or other consumption in Rhode Island.D. Prior to obtaining a motor vehicle registration, the donee is required to: 1. Furnish a notarized letter indicating the name and address of donor or donee, a description of the vehicle with the Vehicle Identification Number and proof that tax was previously paid on such vehicle; i.e. receipt, use tax return, etc.2. Complete Rhode Island Division of Taxation Affidavit of Gift or Motor Vehicle.E. If it is a gift between immediate family blood relatives, i.e. mother/father, husband/wife, sister/brother and children thereof, a gift letter showing names, addresses, relationship and description of vehicle with the Vehicle Identification Number along with proof that the tax was previously paid is required.280 R.I. Code R. § 280-RICR-20-70-28.15