Vehicle Taxability - Casual Sales     

What is a casual sale?

“Casual sale” is a sale of tangible personal property by a person not engaged in the business of selling such tangible personal property.  While most casual sales are exempt from sales tax under R.C. 5739.02(B)(8), that provision specifically excludes the transfer of a motor vehicle from the definition of casual sale.  As a result, a motor vehicle purchased in a casual sale is subject to sales or use tax, and the tax must be paid to the clerk of courts at the time of title transfer.

The definition of “casual sale” is found in R.C. 5739.01(L).

The definition of “price” is found in R.C. 5739.01(H)(1)(a).

Below are examples of the most common taxable casual sales:

1.) Cash

John purchased a car from a motor vehicle dealer in 2011.  He paid all applicable sales tax at the time of purchase.  In 2013, John sold the car to Sue for $10,000.00.  When Sue transfers the title from John’s name into hers, she must pay sales tax on the $10,000.00 price to the clerk of court's title office. 

2.) Trade

Tim and Scott have agreed to trade their vehicles.  No money will be exchanged because they feel this is an even trade.  When Tim and Scott transfer the titles into their names, they must pay sales tax on the fair market value of the traded vehicle to the clerk of court's title office. 

3.) Bartering

Steve is building custom cabinets for his friend Rick.  Rick has agreed to give Steve his vehicle in exchange for the cabinets instead of paying him in cash.  After the cabinets have been installed, Steve will receive title to the vehicle.  When Steve goes to the clerk of court's title office, he must pay sales tax on the fair market value of the services he provided to his friend Rick.

4.) Loan Assumption

Betty has a loan on her SUV. She has decided to sell her vehicle to Jeff.  Betty and Jeff go to her finance company and have the loan refinanced in his name. No money changes hands and Betty is not making a profit from the sale. When Jeff goes to the clerk of court's title office, he must pay sales tax on the balance of the loan he assumed.

 

Frequently Asked Questions Tool

The Ohio Department of Taxation has compiled a list of frequently asked questions covering many different categories.

To view the questions, click on the "Select Category" bar and then click on  the category you are interested in.  A list of questions will appear pertaining to that category. Then click on the question you are inquiring about and the answer will appear.

  

Is mobility-enhancing equipment added to a motor vehicle subject to the sales or use tax?

Ohio law provides a sales tax exemption for sales of mobility-enhancing equipment, when made pursuant to a prescription and when such devices or equipment are used by a human being. “Mobility-enhancing equipment” means equipment, including repair and replacement parts for such equipment, that is primarily and customarily used to provide or increase the ability to move from one place to another and is appropriate for use either in a home or a motor vehicle, that is not generally used by persons with normal mobility, and that does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.

The price for mobility-enhancing equipment sold with  a new motor vehicle MUST be separately stated from the price of the motor vehicle and other vehicle options. If not separately stated, the entire price of the motor vehicle is subject to tax.

If a mobility-enhanced modified motor vehicle is sold by a used vehicle dealer or as a casual sale (non-dealer sale), the price for the entire vehicle is subject to tax because the price of the mobility-enhancing equipment is not separately stated.

Is mobility-enhancing equipment added to a motor vehicle subject to the sales or use tax?

Ohio law provides a sales tax exemption for sales of mobility-enhancing equipment, when made pursuant to a prescription and when such devices or equipment are used by a human being. “Mobility-enhancing equipment” means equipment, including repair and replacement parts for such equipment, that is primarily and customarily used to provide or increase the ability to move from one place to another and is appropriate for use either in a home or a motor vehicle, that is not generally used by persons with normal mobility, and that does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.

The price for mobility-enhancing equipment sold with  a new motor vehicle MUST be separately stated from the price of the motor vehicle and other vehicle options. If not separately stated, the entire price of the motor vehicle is subject to tax.

If a mobility-enhanced modified motor vehicle is sold by a used vehicle dealer or as a casual sale (non-dealer sale), the price for the entire vehicle is subject to tax because the price of the mobility-enhancing equipment is not separately stated.

Is mobility-enhancing equipment added to a motor vehicle subject to the sales or use tax?

Ohio law provides a sales tax exemption for sales of mobility-enhancing equipment, when made pursuant to a prescription and when such devices or equipment are used by a human being. “Mobility-enhancing equipment” means equipment, including repair and replacement parts for such equipment, that is primarily and customarily used to provide or increase the ability to move from one place to another and is appropriate for use either in a home or a motor vehicle, that is not generally used by persons with normal mobility, and that does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.

The price for mobility-enhancing equipment sold with  a new motor vehicle MUST be separately stated from the price of the motor vehicle and other vehicle options. If not separately stated, the entire price of the motor vehicle is subject to tax.

If a mobility-enhanced modified motor vehicle is sold by a used vehicle dealer or as a casual sale (non-dealer sale), the price for the entire vehicle is subject to tax because the price of the mobility-enhancing equipment is not separately stated.