As a PennDOT contracted agent, you play a critical role in the vehicle registration and title transfer process. That means you are often the first point of contact when a customer comes in to register a newly purchased vehicle. The Pennsylvania Department of Revenue wants to make sure you, and your customers, are aware of an important program that could affect transactions you process every day.

What Is the MVUV Program?

The Motor Vehicle Understated Value (MVUV) Program is a joint initiative between the Pennsylvania Department of Revenue (DOR) and PennDOT. Its purpose is to identify and address situations where the reported purchase price of a vehicle appears to be significantly lower than its Fair Market Value (FMV), a tactic sometimes used to reduce Pennsylvania Sales Tax liability.

The Department of Revenue routinely reviews vehicle purchases where the reported price is considerably lower than FMV and will request supporting documentation to verify the transaction.

What Should Agents Watch For?
As a contracted agent, you should be aware of the following types of transactions that are commonly flagged by the MVUV Program:

• Transactions between a business and its owner(s)
• Transactions between a business and an employee
• Transactions between a business and an owner's or employee's family member(s)
• Transactions between two businesses

While these transactions are permissible, they may carry tax implications based on the fair market value of the vehicle, not the reported sale price.

What About Vehicle Gifts?

Gift transfers are another area where agents should proceed carefully. If a customer is gifting a vehicle, they should be prepared to:

• Provide proof of tax previously paid by the individual gifting the vehicle
• Understand that Pennsylvania does not give credit for taxes paid to all states. If the vehicle was originally purchased in a non-reciprocal state, additional tax on the fair market value may be owed
• Know that listing a purchase price of $1 or another nominal value is NOT the proper way to document a gift. Doing so may trigger a request for additional information from the Department of Revenue

For more information on reciprocal states, refer to REV-227 — Sales and Use Tax — Purchases and Sales by Motor Vehicle Dealers

What Happens If a Customer Receives a Notice?

If one of your customers receives an MVUV notice from the Department of Revenue, here is what they need to do:

1. Read the notice thoroughly and follow all instructions
2. Visit MyPath.pa.gov and select "File a Use Tax Return" in the returns panel
3. Provide supporting documentation, which may include:
   • A legible bill of sale
   • A statement from the seller explaining the lower price
   • Financial agreements, lease agreements, or buyout documentation

Important: The Department of Revenue does NOT accept PennDOT registration forms such as MV-1 or MV-3 as supporting documentation. Failure to respond to a notice may result in a tax assessment and additional penalties.

Why This Matters for Contracted Agents

While the tax liability ultimately falls on the buyer, as a contracted agent you are in a unique position to educate your customers at the point of transaction. By making customers aware of the MVUV Program upfront, you can help them:

• Avoid unexpected tax notices down the road
• Understand the importance of accurate and complete documentation
• Ensure that gift transfers and business-related transactions are properly documented

Being proactive about this information reflects the professionalism and integrity that PennDOT expects from its contracted agents.

Questions?
If you or your customers have questions about the MVUV Program, contact the Pennsylvania Department of Revenue — Voluntary Compliance Unit directly:

• Phone: 717-214-7287
• Email: [email protected]

Source: Pennsylvania Department of Revenue, REV-1907 (DR) 05-25, distributed by PennDOT, March 23, 2026.