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 farmers exempt from sales or use tax on vehicles that are licensed to operate on the highways?

Generally, no.  Farmers are only exempt on equipment that is primarily used in farming, such as tractors, planters or combines that plow the fields, plant or harvest the crops. Motor vehicles (automobiles, trucks, etc.) registered for use on the highways and used to transport seed, fertilizers, chemicals or finished products are taxable. APV’s qualify for exemption only if used primarily (more than 50 percent of the time) in farming (similar to the way a tractor is used).

An exception is the purchase of a specially designed vehicle with a tank operated with a power take-off unit (PTO) and used primarily to spray liquid fertilizers, pesticides, herbicides, etc., on farm lands and crops. This vehicle is owned by a company hired by a farmer to provide a farming service and must operate on the highways since it travels from farm to farm. If the tank/sprayer is not operated by a power take-off unit, the vehicle is subject to the tax but the tank/sprayer unit is not.  In this case, the dealer must separate the charges for the vehicle and the tank/sprayer unit.

Another exception is vehicles and trailers that are primarily used to prevent illness to farm livestock for sale, or to prevent contamination of livestock products for sale. For example, a trailer primarily used to inoculate swine and cattle for sale, or transport sick animals to and from quarantine areas are not subject to the tax. Also, a trailer owned by the farmer to primarily transport feed to the farm that would otherwise be contaminated if shipped commercially may be exempt. Vehicles owned and used by egg producers to ship eggs from the farm to market under refrigerated conditions are also not subject to tax.

Are farmers exempt from sales or use tax on vehicles that are licensed to operate on the highways?

Generally, no.  Farmers are only exempt on equipment that is primarily used in farming, such as tractors, planters or combines that plow the fields, plant or harvest the crops. Motor vehicles (automobiles, trucks, etc.) registered for use on the highways and used to transport seed, fertilizers, chemicals or finished products are taxable. APV’s qualify for exemption only if used primarily (more than 50 percent of the time) in farming (similar to the way a tractor is used).

An exception is the purchase of a specially designed vehicle with a tank operated with a power take-off unit (PTO) and used primarily to spray liquid fertilizers, pesticides, herbicides, etc., on farm lands and crops. This vehicle is owned by a company hired by a farmer to provide a farming service and must operate on the highways since it travels from farm to farm. If the tank/sprayer is not operated by a power take-off unit, the vehicle is subject to the tax but the tank/sprayer unit is not.  In this case, the dealer must separate the charges for the vehicle and the tank/sprayer unit.

Another exception is vehicles and trailers that are primarily used to prevent illness to farm livestock for sale, or to prevent contamination of livestock products for sale. For example, a trailer primarily used to inoculate swine and cattle for sale, or transport sick animals to and from quarantine areas are not subject to the tax. Also, a trailer owned by the farmer to primarily transport feed to the farm that would otherwise be contaminated if shipped commercially may be exempt. Vehicles owned and used by egg producers to ship eggs from the farm to market under refrigerated conditions are also not subject to tax.