Vehicle Taxability & Exemptions

Taxability & Exemptions of Motor Vehicles

All sales of motor vehicle are subject to sales or use tax unless an exemption applies.  The tax rate charged is based on the county of the purchaser’s residence.  While  other items may be exempted as a casual sale, the resale of a used motor vehicle is not eligible for this exemption.  

Did you receive a notice from us? 

The definition of a Casual Sale is found in R.C. 5739.01(L).

The application of Sales and Use tax to a casual sale can be referenced in R.C. 5739.02(B)(8)

What is an exemption?

An exemption is a statutory reason that a retail sale is not subject to  sales or use tax. This page discusses exemptions that may apply to motor vehicle transfers.

 

A few examples of exemptions for motor vehicles:

Direct FarmingFarming –Motor vehicles  used primarily in the production of agricultural products for sale may be exempt under R.C. 5739.02(B)(17)

Transportation for Hire – Motor vehicles used primarily in transporting tangible personal property for others may be exempt under R.C. 5739.02(B)(32)

Nonprofit Organizations & Churches – Purchases of motor vehicles by nonprofit charitable organizations and churches may be exempt if the vehicle is purchased by and titled in the name of the organization.  R.C. 5739.02(B)(12)

Transportation Services and Public Utilities  – Vehicles   primarily used to provide taxable transportation services,  such as taxicabs or charter services.  Note—the purchaser  is required to have a vendor’s license and remit sales tax on its taxable transportation services.  R.C. 5739.02(B)(41)

What other vehicle purchases are exempt from the sales and use tax?

Find the answer on our Exemptions Definitions page.

 

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.

  
What is included in the "price" of a motor vehicle when calculating the sales and use tax?Can you provide some examples of "consideration" other than money that is given in exchange for a certificate of title?Can a third party purchase a leased vehicle without payment of sales and use tax twice?Is the consumer entitled to a tax credit for taxes paid to another state?How are lease assumptions of motor vehicles and other tangible personal property taxed?Is GAP taxable?Is mobility-enhancing equipment added to a motor vehicle subject to the sales or use tax?Are auto auctioneers required to collect and remit sales tax?How is tax paid on golf carts?How is a utility trailer taxed and where is the tax paid?Can you provide more examples of situations where there is no tax due on the transfer of title of a motor vehicle, all-purpose vehicle, off-highway motorcycle, titled watercraft, titled outboard motor, or titled personal watercraft?I’m a non-resident of Ohio, but am attending school in Ohio. Am I exempt as a non-resident?Are members of the armed services exempt from sales or use tax?When must the clerks of courts obtain an exemption certificate or completed forms T-610 or T-615? Does the winner of a raffle, contest or lottery owe any Ohio sales or use tax?Are court-ordered title transfers subject to the sales or use tax?Can the clergy of a church obtain a title in his/her name without paying sales or use tax?Are farmers exempt from sales or use tax on vehicles that are licensed to operate on the highways?Who is entitled to claim exemption from sales tax based on the "Highway Transportation for Hire" (TH) exemption?Can a motor vehicle dealer obtain title to a watercraft under a "resale" exemption?Can a pawnbroker obtain title to a motor vehicle under a resale exemption?Can the providers of taxable transportation services purchase motor vehicles such as taxicabs, limousines, or charter buses and be exempt from sales or use tax?Is sales and use tax due on a self-assembled motor vehicle or watercraft?Can an Ohio title be issued on a watercraft, outboard motor, or personal watercraft purchased in Ohio for use in Ohio by a resident of another state?Is an ambulance service entitled to claim exemption from sales and use tax under the "used directly in the rendition of a public utility service" exemption?Can a manufacturer obtain title to a motor vehicle without paying sales tax when the vehicle was purchased back by the manufacturer pursuant to the lemon law?If the manufacturer repurchases my motor vehicle, watercraft or outboard motor, pursuant to the lemon law, and replaces it with another vehicle, do I have to pay tax when applying for title on the second vehicle? Can a dealer donate an item (motor vehicle, watercraft and/or outboard motor) to a nonprofit, charitable organization and avoid payment of tax?What happens when a nonresident purchaser returns to Ohio?What is a "new" motor vehicle for purposes of the trade-in allowance?If I purchase a vehicle at a local auto dealer and have the vehicle shipped out of the state or country, do I pay Ohio sales tax?