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.

Can a person trade in more than one motor vehicle on the purchase of a new motor vehicle and deduct the trade-in value of both vehicles?

Yes. The combined value of the vehicles given in trade reduces the “price” of the new motor vehicle purchased from a new motor vehicle dealer. If the value of the trade-ins is less than the “price” of the new vehicle, tax is due on the difference. If the value of the trade-ins equals or exceeds the “price” of the new vehicle, no tax is due as the “price” is zero. (Note: The “price” for calculating sales tax on the new vehicle cannot be less than zero.)