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.

Are auto auctioneers required to collect and remit sales tax?

Most auto auctioneers are only allowed to sell motor vehicles to other licensed motor vehicle dealers. Therefore, all sales should be for “resale” and exempt from Ohio sales and use tax.

However, individuals are allowed to attend and purchase repossessed vehicles at auctions. At the time of auction, the vehicles are titled in the name of the financial institution. Titles are assigned to the winning bidder. The bidder is required to obtain title at any Ohio clerk of courts office. Tax must be paid at the time of titling at the rate of the bidder’s county of residence. Tax is computed on the amount of the winning bid and any fees or commissions added by the auction.

Are auto auctioneers required to collect and remit sales tax?

Most auto auctioneers are only allowed to sell motor vehicles to other licensed motor vehicle dealers. Therefore, all sales should be for “resale” and exempt from Ohio sales and use tax.

However, individuals are allowed to attend and purchase repossessed vehicles at auctions. At the time of auction, the vehicles are titled in the name of the financial institution. Titles are assigned to the winning bidder. The bidder is required to obtain title at any Ohio clerk of courts office. Tax must be paid at the time of titling at the rate of the bidder’s county of residence. Tax is computed on the amount of the winning bid and any fees or commissions added by the auction.