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.

If a motor vehicle dealer accepts cash down payments, must the motor vehicle dealer charge sales tax when the vehicle is to be leased? If yes, how is the tax paid?

Cash down payments are subject to the sales tax.   

Prior to Feb. 1, 2002, if a down payment was collected by the leasing dealer, the leasing dealer would also collect the sales tax. The leasing dealer would then remit the tax to the State of Ohio, like any other sales tax payment.

If a down payment is paid to the motor vehicle dealer, the motor vehicle dealer will also collect the sales tax and either remit it directly to the State of Ohio on the dealer's transient sales tax return or forward it to the leasing dealer so that the leasing dealer can remit it to the State of Ohio.

Note:  In either of these situations, tax is not remitted to Clerks of Courts because the motor vehicle will be titled in the leasing company’s name under the "Resale - leasing" exemption.

As of Feb. 1, 2002, the dealer collects the cash down payment as part of the price paid for the lease of the motor vehicle, watercraft or outboard motor. It is charged at the rate in the lessee’s county of residence, and remitted to the State of Ohio on the dealer’s transient vendor’s license.

If a motor vehicle dealer accepts cash down payments, must the motor vehicle dealer charge sales tax when the vehicle is to be leased? If yes, how is the tax paid?

Cash down payments are subject to the sales tax.   

Prior to Feb. 1, 2002, if a down payment was collected by the leasing dealer, the leasing dealer would also collect the sales tax. The leasing dealer would then remit the tax to the State of Ohio, like any other sales tax payment.

If a down payment is paid to the motor vehicle dealer, the motor vehicle dealer will also collect the sales tax and either remit it directly to the State of Ohio on the dealer's transient sales tax return or forward it to the leasing dealer so that the leasing dealer can remit it to the State of Ohio.

Note:  In either of these situations, tax is not remitted to Clerks of Courts because the motor vehicle will be titled in the leasing company’s name under the "Resale - leasing" exemption.

As of Feb. 1, 2002, the dealer collects the cash down payment as part of the price paid for the lease of the motor vehicle, watercraft or outboard motor. It is charged at the rate in the lessee’s county of residence, and remitted to the State of Ohio on the dealer’s transient vendor’s license.