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.

Does a trade-in reduce the price when calculating sales or use tax?

 

YES

NO

If a motor vehicle is traded for a new motor vehicle, all-purpose vehicle or off-highway motorcycle in a purchase or lease agreement.

 

If a motor vehicle is traded for a used motor vehicle, all-purpose vehicle or off-highway motorcycle in a purchase or lease agreement.

 

If a watercraft, outboard motor or personal watercraft is traded for a new/used watercraft, outboard motor, and/or personal watercraft and the seller (located in-state or out-of-state) is, at the time of sale, licensed as a watercraft dealer through the Ohio Department of Natural Resources, Watercraft Division. License format is OH NNNN ZZ.   

If a watercraft, outboard motor or personal watercraft is traded for a new or used motor vehicle, all-purpose vehicle or off-highway motorcycle.

 

If a vehicle is under a valid lease and the lessee is attempting to trade-in the vehicle that is titled in the name of the leasing company. Under the terms of most lease agreements, the leasing company (during the life of the lease) can only sell (transfer title for consideration) the leased vehicle to the lessee or to a dealer. If the leasing company sells the vehicle to a dealer, it is no longer available to be used as a trade-in by the lessee.  Note: The answer would be yes if the lessee purchased the leased vehicle, paid sales tax on the purchase to the leasing company, titled it in the lessee’s name, and then traded it in on the purchase of a new motor vehicle.

 

If a watercraft, outboard motor, or personal watercraft is traded for a new/used watercraft, outboard motor or personal watercraft and the seller (located in-state or out-of-state) is not, at the time of sale, licensed as a watercraft dealer through the Ohio Department of Natural Resources, Watercraft Division.    

 

If a motor vehicle is traded for a watercraft, outboard motor or personal watercraft.

Does a trade-in reduce the price when calculating sales or use tax?

 

YES

NO

If a motor vehicle is traded for a new motor vehicle, all-purpose vehicle or off-highway motorcycle in a purchase or lease agreement.

 

If a motor vehicle is traded for a used motor vehicle, all-purpose vehicle or off-highway motorcycle in a purchase or lease agreement.

 

If a watercraft, outboard motor or personal watercraft is traded for a new/used watercraft, outboard motor, and/or personal watercraft and the seller (located in-state or out-of-state) is, at the time of sale, licensed as a watercraft dealer through the Ohio Department of Natural Resources, Watercraft Division. License format is OH NNNN ZZ.   

If a watercraft, outboard motor or personal watercraft is traded for a new or used motor vehicle, all-purpose vehicle or off-highway motorcycle.

 

If a vehicle is under a valid lease and the lessee is attempting to trade-in the vehicle that is titled in the name of the leasing company. Under the terms of most lease agreements, the leasing company (during the life of the lease) can only sell (transfer title for consideration) the leased vehicle to the lessee or to a dealer. If the leasing company sells the vehicle to a dealer, it is no longer available to be used as a trade-in by the lessee.  Note: The answer would be yes if the lessee purchased the leased vehicle, paid sales tax on the purchase to the leasing company, titled it in the lessee’s name, and then traded it in on the purchase of a new motor vehicle.

 

If a watercraft, outboard motor, or personal watercraft is traded for a new/used watercraft, outboard motor or personal watercraft and the seller (located in-state or out-of-state) is not, at the time of sale, licensed as a watercraft dealer through the Ohio Department of Natural Resources, Watercraft Division.    

 

If a motor vehicle is traded for a watercraft, outboard motor or personal watercraft.

Does a trade-in reduce the price when calculating sales or use tax?

 

YES

NO

If a motor vehicle is traded for a new motor vehicle, all-purpose vehicle or off-highway motorcycle in a purchase or lease agreement.

 

If a motor vehicle is traded for a used motor vehicle, all-purpose vehicle or off-highway motorcycle in a purchase or lease agreement.

 

If a watercraft, outboard motor or personal watercraft is traded for a new/used watercraft, outboard motor, and/or personal watercraft and the seller (located in-state or out-of-state) is, at the time of sale, licensed as a watercraft dealer through the Ohio Department of Natural Resources, Watercraft Division. License format is OH NNNN ZZ.   

If a watercraft, outboard motor or personal watercraft is traded for a new or used motor vehicle, all-purpose vehicle or off-highway motorcycle.

 

If a vehicle is under a valid lease and the lessee is attempting to trade-in the vehicle that is titled in the name of the leasing company. Under the terms of most lease agreements, the leasing company (during the life of the lease) can only sell (transfer title for consideration) the leased vehicle to the lessee or to a dealer. If the leasing company sells the vehicle to a dealer, it is no longer available to be used as a trade-in by the lessee.  Note: The answer would be yes if the lessee purchased the leased vehicle, paid sales tax on the purchase to the leasing company, titled it in the lessee’s name, and then traded it in on the purchase of a new motor vehicle.

 

If a watercraft, outboard motor, or personal watercraft is traded for a new/used watercraft, outboard motor or personal watercraft and the seller (located in-state or out-of-state) is not, at the time of sale, licensed as a watercraft dealer through the Ohio Department of Natural Resources, Watercraft Division.    

 

If a motor vehicle is traded for a watercraft, outboard motor or personal watercraft.