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.

Who is entitled to claim exemption from sales tax based on the "Highway Transportation for Hire" (TH) exemption?

Persons who transport personal property belonging to others for consideration over the highways are engaged in highway transportation for hire. These persons must be regulated by the Public Utilities Commission of Ohio (PUCO) or the Interstate Commerce Commission (ICC) and must provide the permit number issued by PUCO (PUCO XXXXXX) or the ICC (ICC XXXXXX or MC XXXXXX) on the exemption certificate.

Generally, the owner of the motor vehicle is the one who holds the PUCO or ICC/MC permit. However, the owner of the motor vehicle may contract with the PUCO/ICC/MC permit holder.  If the owner of a motor vehicle used in highway transportation for hire is not the permit holder, the owner must provide a copy of the contract that authorizes the owner to operate the vehicle under the PUCO/ICC/MC permit number.

Any motor vehicle (tractor/trailer rig, pick-up truck, automobile, van, sport utility vehicle and/or motorcycle) may qualify for the TH exemption if it is primarily used in highway transportation for hire. If the motor vehicle is used primarily as a parts vehicle or a vehicle used to transport drivers, it does not qualify for the exemption.

Effective July 1, 2003, tow-truck operators are required to be registered with the PUCO. Therefore, if they are transporting goods that belong to others, they may use the highway transportation for hire (TH) exemption code. They need to provide their PUCO number or their ICC/MC permit on the exemption certificate.

The highway transportation for hire exemption does not apply to those in the business of transporting people. For example, it does not cover bus companies, taxicab companies or limousine services.

This exemption does not apply to all-purpose vehicles, off-highway motorcycles, watercraft and outboard motors since they cannot be used to transport items over the highway.

The USDOT number cannot be used to qualify for the TH exemption as these individuals are hauling their own inventory/personal property and are not engaged in highway transportation for hire.

Who is entitled to claim exemption from sales tax based on the "Highway Transportation for Hire" (TH) exemption?

Persons who transport personal property belonging to others for consideration over the highways are engaged in highway transportation for hire. These persons must be regulated by the Public Utilities Commission of Ohio (PUCO) or the Interstate Commerce Commission (ICC) and must provide the permit number issued by PUCO (PUCO XXXXXX) or the ICC (ICC XXXXXX or MC XXXXXX) on the exemption certificate.

Generally, the owner of the motor vehicle is the one who holds the PUCO or ICC/MC permit. However, the owner of the motor vehicle may contract with the PUCO/ICC/MC permit holder.  If the owner of a motor vehicle used in highway transportation for hire is not the permit holder, the owner must provide a copy of the contract that authorizes the owner to operate the vehicle under the PUCO/ICC/MC permit number.

Any motor vehicle (tractor/trailer rig, pick-up truck, automobile, van, sport utility vehicle and/or motorcycle) may qualify for the TH exemption if it is primarily used in highway transportation for hire. If the motor vehicle is used primarily as a parts vehicle or a vehicle used to transport drivers, it does not qualify for the exemption.

Effective July 1, 2003, tow-truck operators are required to be registered with the PUCO. Therefore, if they are transporting goods that belong to others, they may use the highway transportation for hire (TH) exemption code. They need to provide their PUCO number or their ICC/MC permit on the exemption certificate.

The highway transportation for hire exemption does not apply to those in the business of transporting people. For example, it does not cover bus companies, taxicab companies or limousine services.

This exemption does not apply to all-purpose vehicles, off-highway motorcycles, watercraft and outboard motors since they cannot be used to transport items over the highway.

The USDOT number cannot be used to qualify for the TH exemption as these individuals are hauling their own inventory/personal property and are not engaged in highway transportation for hire.