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.

Are out-of-state leasing dealers/companies required to be registered for collection of sales or use tax?

Yes. Out-of-state leasing dealers/companies are required to be registered with the Department of Taxation, but they may not be required to have a leasing dealer’s permit (LD#) from the Bureau of Motor Vehicles. To title these vehicles in the leasing dealer’s name, use the ATPS exemption code: “RO: Resale – out-of-state leasing.” ATPS will require a valid Ohio use tax account number (99-XXXXXX) before it will proceed with issuing a title without collecting use tax.

Note: This could apply to watercraft and outboard motors.

If the out-of-state leasing dealer has a leasing dealer’s permit issued by the Bureau of Motor Vehicles, you would use the exemption code “RL: Resale – leasing” and you would use the leasing dealer’s permit number and the Ohio use tax account number (99-XXXXXX).

For information on obtaining an out-of-state seller’s vendor license, please visit our Web site at License and Filing Requirements.

Are out-of-state leasing dealers/companies required to be registered for collection of sales or use tax?

Yes. Out-of-state leasing dealers/companies are required to be registered with the Department of Taxation, but they may not be required to have a leasing dealer’s permit (LD#) from the Bureau of Motor Vehicles. To title these vehicles in the leasing dealer’s name, use the ATPS exemption code: “RO: Resale – out-of-state leasing.” ATPS will require a valid Ohio use tax account number (99-XXXXXX) before it will proceed with issuing a title without collecting use tax.

Note: This could apply to watercraft and outboard motors.

If the out-of-state leasing dealer has a leasing dealer’s permit issued by the Bureau of Motor Vehicles, you would use the exemption code “RL: Resale – leasing” and you would use the leasing dealer’s permit number and the Ohio use tax account number (99-XXXXXX).

For information on obtaining an out-of-state seller’s vendor license, please visit our Web site at License and Filing Requirements.