FAQs - Sales and Use Tax

What is included in the "price" of a motor vehicle when calculating the sales and use tax?

“Consideration” or “price” means the aggregate value in money of anything paid or promised to be paid or delivered in exchange for the transfer of either title to or possession of a motor vehicle, all-purpose vehicle, off-highway motorcycle, watercraft, outboard motor or personal watercraft. No deduction may be made from the “consideration” or “price” upon which the tax is based by reason of any trade-in allowance (except for the sale of a new motor vehicle, all-purpose vehicle or off-highway motorcycle by a new motor vehicle dealer upon which a motor vehicle, all-purpose vehicle or off-highway motorcycle is given in trade; OR the sale of a new or used watercraft, outboard motor or personal watercraft by a licensed watercraft dealer upon which a watercraft,  outboard motor or personal watercraft is given in trade) or a manufacturer's rebate. The sales or use tax is computed upon the total amount of consideration, whether in cash, by exchange (trade) or by any means whatsoever.

The tax base should include the amount charged for the following:

(a) Base price of vehicle, watercraft or outboard motor.

(b) Accessories (floor mats, mud flaps, air conditioning, cruise control, radio, CD player, etc.).

(c) Freight or transportation charges from the manufacturer to the dealer.

(d) National advertising that may be charged on a unit basis.

(e) Service and handling prior to delivery (preparation charge).

(f) Documentary fees (does not include separately stated title and registration fees or fees associated with the documentation of a watercraft with the U.S. Coast Guard).

(g) Undercoating.

(h) Extended warranty, service or maintenance contracts sold at the same time as the item covered by the extended warranty, service or maintenance agreement. (Note: Sales of extended warranties, service or maintenance agreements that are sold some time after an item is sold are subject to sales tax, but tax will be paid directly to Ohio, not through the Clerks of Courts.)

(i) Delivery charges from the dealer to the customer effective Aug. 1, 2003

**** Special Notes ****

Manufacturer’s rebates and cash down payments do not reduce the “price” for calculating sales or use tax. “Price” can be reduced by any cash discount given at the time of sale.

The 12 percent federal excise tax (FET) levied by the federal government on the purchaser of a heavy truck is not to be included in the “price” since it is a direct federal tax on the consumer.