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 an Ohio title be issued on a watercraft, outboard motor, or personal watercraft purchased in Ohio for use in Ohio by a resident of another state?

Yes, per the Ohio Department of Natural Resources, Watercraft Division.

If a resident of another state purchases a watercraft, outboard motor or personal watercraft in Ohio for use in Ohio, an Ohio title must be issued. The title can be obtained at any office of the Ohio clerk of courts, but the tax charged is the rate in effect in the county of the watercraft’s or outboard motor’s primary use.

Note: If the watercraft, outboard motor or personal watercraft was first purchased outside of Ohio, credit is given for any sales or use taxes legally paid to another state (not country) up to but not exceeding the amount due in Ohio. If the Ohio tax liability is greater than the amount paid to the other state, the balance would be due Ohio when the Ohio title is issued.

Can an Ohio title be issued on a watercraft, outboard motor, or personal watercraft purchased in Ohio for use in Ohio by a resident of another state?

Yes, per the Ohio Department of Natural Resources, Watercraft Division.

If a resident of another state purchases a watercraft, outboard motor or personal watercraft in Ohio for use in Ohio, an Ohio title must be issued. The title can be obtained at any office of the Ohio clerk of courts, but the tax charged is the rate in effect in the county of the watercraft’s or outboard motor’s primary use.

Note: If the watercraft, outboard motor or personal watercraft was first purchased outside of Ohio, credit is given for any sales or use taxes legally paid to another state (not country) up to but not exceeding the amount due in Ohio. If the Ohio tax liability is greater than the amount paid to the other state, the balance would be due Ohio when the Ohio title is issued.