Pretty straight forward....
You pay taxes on the documented
sale price, as written on the title. I bolded that for a reason.
If you're related to the buyer, then you don't pay sales tax. If you say you're related to the buyer, but aren't, the state will penalize you by charging interest on the sales tax, and will require you to pay the sales tax. The DMV verifies each transaction in which someone declares being related.
All taxes are paid to the DMV, just as Pete said.