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.

  

Can a motor vehicle dealer obtain title to a watercraft under a "resale" exemption?

Yes. A motor vehicle dealer may claim “Resale – watercraft” (RV) when the dealer acquires a watercraft, if it is acquired for purposes of resale. The dealer must provide a valid vendor’s license for the dealership’s location (not the motor vehicle dealer’s permit number). If the dealer uses the watercraft for personal use, it cannot claim resale and must pay tax on the price paid or the value given in trade for the watercraft.

When the dealer, who is not a licensed watercraft dealer, sells a watercraft, it must obtain title in the customer’s name and collect sales tax on the sale. If the sale is to an Ohio resident, the tax rate is the rate in effect in the customer’s county of residence.  The dealer must pay the tax to the clerk of courts when title is obtained. If the sale is to a nonresident of Ohio, the dealer must collect tax at the lesser rate in effect at the Ohio dealer’s location or the rate in the customer's state. The customer must complete form ST WC AFF.  The dealer must remit the tax directly to the Department of Taxation on form ST WC NR, along with the completed ST WC AFF. A nonresident title may be obtained from the clerk of courts.

Can a motor vehicle dealer obtain title to a watercraft under a "resale" exemption?

Yes. A motor vehicle dealer may claim “Resale – watercraft” (RV) when the dealer acquires a watercraft, if it is acquired for purposes of resale. The dealer must provide a valid vendor’s license for the dealership’s location (not the motor vehicle dealer’s permit number). If the dealer uses the watercraft for personal use, it cannot claim resale and must pay tax on the price paid or the value given in trade for the watercraft.

When the dealer, who is not a licensed watercraft dealer, sells a watercraft, it must obtain title in the customer’s name and collect sales tax on the sale. If the sale is to an Ohio resident, the tax rate is the rate in effect in the customer’s county of residence.  The dealer must pay the tax to the clerk of courts when title is obtained. If the sale is to a nonresident of Ohio, the dealer must collect tax at the lesser rate in effect at the Ohio dealer’s location or the rate in the customer's state. The customer must complete form ST WC AFF.  The dealer must remit the tax directly to the Department of Taxation on form ST WC NR, along with the completed ST WC AFF. A nonresident title may be obtained from the clerk of courts.