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.

What tax rate is charged on the sale or lease of motor vehicles, watercraft or outboard motors?

Titled motor vehicles, watercraft or outboard motors are subject to tax at the rate in effect in the county of the purchaser’s residence.

A lease of titled motor vehicles, watercraft or outboard motors, whether the lease is paid in one upfront payment, (no monthly payments), or by a stream of payments, is taxed at the rate in effect in the county of the primary property location of the vehicle(s) or watercraft. This may be the county of the lessee’s residence, or in the case of multiple vehicles leased to one person but used in several counties, the county where the vehicles are garaged overnight.

A sale or lease of a documented watercraft is taxed at the rate in effect where the customer takes possession of the watercraft. Any subsequent taxable charges on the lease will be sourced to the primary property location for the period in which the charges are incurred.

“Primary property location” means an address for tangible personal property provided by the lessee or renter that is available to the lessor or owner from its records maintained in the ordinary course of business, when use of that address does not constitute bad faith.

There are some sales of titled or untitled vehicles, watercraft, outboard motors or other items of tangible personal property made by vendors or dealers that are not “licensed” dealers under sections 4517 or 1547 of the Ohio Revised Code. An example would be a vendor of all purpose vehicles or off-road motorcycles that is “registered” with the Bureau of Motor Vehicles, or a vendor that sells boats less the 14 feet in length. The tax would be collected by the vendor/dealer and reported and paid to Ohio on the vendor’s sales tax return.

What tax rate is charged on the sale or lease of motor vehicles, watercraft or outboard motors?

Titled motor vehicles, watercraft or outboard motors are subject to tax at the rate in effect in the county of the purchaser’s residence.

A lease of titled motor vehicles, watercraft or outboard motors, whether the lease is paid in one upfront payment, (no monthly payments), or by a stream of payments, is taxed at the rate in effect in the county of the primary property location of the vehicle(s) or watercraft. This may be the county of the lessee’s residence, or in the case of multiple vehicles leased to one person but used in several counties, the county where the vehicles are garaged overnight.

A sale or lease of a documented watercraft is taxed at the rate in effect where the customer takes possession of the watercraft. Any subsequent taxable charges on the lease will be sourced to the primary property location for the period in which the charges are incurred.

“Primary property location” means an address for tangible personal property provided by the lessee or renter that is available to the lessor or owner from its records maintained in the ordinary course of business, when use of that address does not constitute bad faith.

There are some sales of titled or untitled vehicles, watercraft, outboard motors or other items of tangible personal property made by vendors or dealers that are not “licensed” dealers under sections 4517 or 1547 of the Ohio Revised Code. An example would be a vendor of all purpose vehicles or off-road motorcycles that is “registered” with the Bureau of Motor Vehicles, or a vendor that sells boats less the 14 feet in length. The tax would be collected by the vendor/dealer and reported and paid to Ohio on the vendor’s sales tax return.