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.

Does the winner of a raffle, contest or lottery owe any Ohio sales or use tax?

Raffle or Contest Winner

The winner of a raffle or contest does not owe Ohio sales or use tax, as he/she has not paid a “price” for the item received.  The sponsor of the raffle or contest, however, may be subject to Ohio sales or use tax.  The Department of Taxation requires the local clerk of courts to provide a copy of the MSO/title assigned to the winner of the raffle or contest and a copy of the title issued in the name of the winner. The Department will determine if the sponsor or contributor must pay sales or use tax.

Ohio Lottery Winner

The winner of a motor vehicle, all-purpose vehicle, off-highway motorcycle, watercraft or outboard motor (or any other item of tangible personal property) through one of the lottery games must take possession of the item won. The Ohio Lottery Commission purchases the item in the name of the lottery winner and taxes will be paid on the purchase price. If the item is required to be titled, taxes will be paid to the local Clerk of Courts by the dealer (lottery commissioner will pay the dealer the price of the vehicle and the tax as part of lottery prize payment) at the time the title is issued.

Does the winner of a raffle, contest or lottery owe any Ohio sales or use tax?

Raffle or Contest Winner

The winner of a raffle or contest does not owe Ohio sales or use tax, as he/she has not paid a “price” for the item received.  The sponsor of the raffle or contest, however, may be subject to Ohio sales or use tax.  The Department of Taxation requires the local clerk of courts to provide a copy of the MSO/title assigned to the winner of the raffle or contest and a copy of the title issued in the name of the winner. The Department will determine if the sponsor or contributor must pay sales or use tax.

Ohio Lottery Winner

The winner of a motor vehicle, all-purpose vehicle, off-highway motorcycle, watercraft or outboard motor (or any other item of tangible personal property) through one of the lottery games must take possession of the item won. The Ohio Lottery Commission purchases the item in the name of the lottery winner and taxes will be paid on the purchase price. If the item is required to be titled, taxes will be paid to the local Clerk of Courts by the dealer (lottery commissioner will pay the dealer the price of the vehicle and the tax as part of lottery prize payment) at the time the title is issued.