Vehicle Taxability

All title transfers and exemption claims on motor vehicles and other equipment is regularly audited by the Ohio Department of Taxation in accordance with Ohio Revised Code (RC) 4505.09(B)(2)(c) and 5739.13 to verify if the sales tax liability has been satisfied.

When a motor vehicle title is transferred, the price of the vehicle is reported to a Clerk of Courts Title Office and sales tax is paid on the price of the vehicle.   

 

Key Resources

Casual Sales – These sales are defined as the transfer of a motor vehicle title between two individuals who are not affiliated with a licensed dealership. Learn more here.  

Exemptions & Taxability – Ohio law allows certain vehicle transactions to be made without paying sales tax. Find out more here.

Leasing & Dealer Transactions – This link is for licensed dealerships to obtain more information on the application of sales tax to their transactions including leases.   

Aircraft – The sale of an aircraft may be subject to sales tax. This page will provide additional resources regarding the taxability of aircraft.

Watercraft & Outboard Motors – The transfer of a watercraft or outboard motor is generally taxed in the same manner as motor vehicles. Get the information you need here.

Downloads – Forms, questionnaires, and additional resources can be found on this page. Please click on the download link in order to see a list of available forms to download.

Did you receive a letter from us?  - This link will provide more information on notices that are sent and how best to respond.

 

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.

How are taxes calculated on a brokered watercraft sale?

The sale of watercraft, outboard motors and parts thereof by boat dealers and/or brokers is a retail sale subject to the sales or use tax regardless of who holds title to such watercraft, outboard motors or parts prior to the sale.

Ohio Admin. Code 5703-9-40 states:

Persons engaged in the business of selling tangible personal property, who are authorized, engaged or employed to sell tangible personal property belonging to another are the vendors of such tangible personal property and shall be responsible for the proper collection and remittance of the sales tax with respect to such sales.

Persons engaged in the business of selling tangible personal property shall include persons who hold themselves out to the public as conducting a business regardless of whether the merchandise sold is owned by them or by other persons who have authorized, engaged or employed them to sell tangible personal property.

Therefore, persons who make sales of tangible personal property on their own behalf or on behalf of others must collect the tax on all such sales unless the sale is exempt. Such dealers and/or brokers must have a vendor's license or out-of-state seller’s use tax registration with Ohio for the collection and remittance of tax.  Tax must be paid by the dealer/broker as follows:

(a) On titled watercraft and/or outboard motors, the dealer/broker must remit the tax [net of discount if the dealer/broker has a vendor’s license or an out-of-state seller’s registration (99-XXXXXX)] to the clerk of courts at the rate in effect in the purchaser’s county of residence.

(b) On watercraft not required to be titled, documented watercraft or accessories and parts, the dealer/broker must remit the tax to the Department of Taxation on the dealer/broker’s tax return. The remittance is net of discount if the return is timely filed and the tax due is paid in full. The tax rate to collect is the rate in the county where the customer takes possession of the watercraft or accessories.

**** Special Note ****

If the dealer/broker is licensed with the Ohio Department of Natural Resources as a watercraft dealer, the “price” for calculating sales tax may be reduced by any watercraft or outboard motor taken in trade by the dealer/broker.