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.

What happens when a nonresident purchaser returns to Ohio?

When a nonresident purchases a motor vehicle from an Ohio dealer, the Ohio dealer is required to obtain an Ohio title in the name of the purchaser. The purchaser may claim exemption from Ohio sales and use tax by executing the nonresident affidavit. Under Ohio law, the purchaser must immediately remove the vehicle from Ohio and title and register the vehicle in the purchaser's resident state.

If the purchaser fails to remove the vehicle from Ohio or does not title and register the vehicle in another state, Ohio tax is due.  Credit is allowed for tax legally paid to another state.

**** Special Note ****

If the purchaser complied with these requirements and later returns to Ohio (more than six months after date of purchase), the non-Ohio title should be converted to an Ohio title under the ATPS exemption code of CV or CM.

If the purchaser has complied with these requirements and later returns to Ohio (less than six months after date of purchase), the non-Ohio title should be converted to an Ohio title but Ohio tax is due.  Credit is given for any sales or use tax legally paid to another state. (Note: No credit is given for sales or use or similar tax paid to a foreign country.)