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Vehicle Taxability - Leasing & Dealers

Leasing and Auto Dealer Transactions

When buying a vehicle from an auto dealer, there are many options available to the consumer.  Here we will provide information on how the sales tax applies to the different transactions that may occur.

 

Leases

A lease is any transfer of the possession or control of tangible personal property for a fixed or indefinite term, for consideration. Leases include future options to purchase or extend, and agreements where the amount of consideration may be increased or decreased by reference to the amount realized upon the sale or disposition of the property.

The link below will take you to a memo drafted by the Ohio Department of Taxation explaining how leases of motor vehicles are taxed.

Leasing Memo

 

Sales to Non-Residents of Ohio

Please see the Information Release for details.

 

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 in which you are interested.  A list of questions will appear pertaining to that category. Then click on the question you are inquiring about and the answer will appear.

A lessor may advance tax to the lessee and finance the tax over the term of the lease. If this is done, is the repayment of the tax and any interest on that repayment subject to tax?

The repayment of the financed tax and any interest on that financed tax is not included in the tax base of the lease for sales and use tax purposes if the records of the vendor and the lease clearly document the total price on which the tax was calculated and the amount of tax collected. The financed tax portion of the lessee’s payment should be separately stated on the lease billings.