ST 1992-05 – Highway Transportation for Hire - Issued
August 1992;
Updated August 2011
This Information Release corrects an erroneous interpretation
by some taxpayers of the Information Release issued August
1992. Ohio Revised Code (“R.C.”) 5739.02(B)(6) exempts
sales of motor vehicle fuel from sales and use tax only if
the consumer paid motor vehicle fuel tax on such fuel.
R.C. Chapter 5735 exempts from the Ohio motor fuel tax, motor
fuel for various reasons, including but not limited to, its
manner of use, thus, making it subject to Ohio sales and use
tax. The Department does not consider motor vehicle
fuel that is used in an exempt manner for purposes of the
Ohio motor fuel tax exempt from Ohio sales and use tax based
on R.C. 5739.02(B)(32) (highway transportation for hire
exemption) because the motor fuel is not incorporated into
the vehicle as required by that exemption. Further, as
authorized by R.C. 5739.02(B)(6), effective August 2011
absent an applicable exemption, the Department will offset
motor vehicle fuel tax refunds by the amount of sales or use
tax due.
What Is Highway Transportation For Hire?
R.C. 5739.01(Z) states:
(Z) “Highway transportation for hire” means the
transportation of personal property belonging to others for
consideration by any of the following:
(1) The holder of a permit or certificate issued by this
state or the United States authorizing the holder to engage
in transportation of personal property belonging to others
for consideration over or on highways, roadways, streets,
or any similar public thoroughfare;
(2) A person who engages in the transportation of personal
property belonging to others for consideration over or on
highways, roadways, streets, or any similar public
thoroughfare but who could not have engaged in such
transportation on December 11, 1985, unless the person was
the holder of a permit or certificate of the types
described in division (Z)(1) of this section;
(3) A person who leases a motor vehicle to and operates it
for a person described by division (Z)(1) or (2) of this
section.
A carrier is engaged in highway transportation for hire if it
satisfies the following:
- Has operating authority from the Public Utilities
Commission of Ohio (“PUCO”) or United States Department of
Transportation (“USDOT”); and
- In fact transports tangible personal property belonging
to others for payment.
A private carrier that does not transport property belonging
to others is not engaged in highway transportation for hire.
Similarly, a carrier that is not required to obtain operating
authority from either the PUCO or USDOT is not engaged in
highway transportation for hire.
WHAT IS COVERED BY THE SALES TAX
EXEMPTION?
The sales tax law provides a sales
tax exemption for vehicles primarily used in highway
transportation for hire in R.C. 5739.02(B)(32). That provision states:
The sale, lease, repair, and maintenance of, parts for, or
items attached to or incorporated in, motor vehicles that
are primarily used for transporting tangible personal
property belonging to others by a person engaged in highway
transportation for hire, except for packages and packaging
used for the transportation of tangible personal property;
In order to be exempt, the vehicle must be
primarily (more than 50%) used in carrying
property belonging to others for consideration. For example,
trucks used by a company that delivers its own merchandise,
but has a permit solely for the purpose of picking up back
hauls, would be taxable if the back haul mileage is equal to
or less than the delivery mileage.
The exemption covers:
- Titled motor vehicles, including trailers;
-
.Items actually attached to the exempt vehicle,
including repair parts, tarps, radios, computers, signs,
placards, reflectors, etc.;
- Oil, lubricants, and similar things incorporated into
the vehicle;
- Services (labor) to repair or mechanically maintain the
motor vehicle; and
- Cleaning of tank trailers between loads.
The exemption does not cover:
- Motor vehicle fuel that is used in a nontaxable manner
under chapter 5735 of the Ohio Revised Code;
- Washing the interior or exterior of the vehicle (except
tank trailers);
- Log books and other items used by the driver but not
physically part of the vehicle;
- Motor vehicles, such as company cars or repair trucks,
that are not used primarily to transport property for
consideration;
- Terminal equipment, such as conveyors and hand trucks;
- Repair or maintenance shop tools and equipment; and
- Office equipment, computers, building supplies or
anything else that is not part of the motor vehicles
primarily used in highway transportation for hire.
At the time of purchase, a fully completed exemption
certificate indicating highway transportation for hire must
be provided to the vendor. The PUCO or USDOT permit number
should be indicated on the exemption certificate. Brokers
should attach a copy of their lease agreement with the
carrier. .
HAZARDOUS WASTE
Under federal and state
law, generators of hazardous waste have a continuing
responsibility and liability regarding the disposal of such
materials. Therefore, the activity of hauling hazardous waste
for such persons is considered to be transporting property
“belonging to others.” For purposes of 5739.0l (Z)
(1) R.C., a hazardous waste (“HW”) permit issued by the
PUCO is a “permit or certificate.” The holder of an HW permit
that primarily transports its own hazardous waste is not
exempt. Also, vehicles whose primary purpose is something
other that transporting the hazardous waste, e.g. vehicles
used to carry clean—up or remediation equipment, are not
exempt.
TRASH
Generally, transporting trash,
garbage, construction or demolition debris, or any other
“non-hazardous” waste for disposal is not highway
transportation for hire because the hauler’s customer retains
no ownership rights in the waste after it has been picked up
by the hauler.
If you have any questions regarding this matter, contact our
Taxpayer Services Center at 1-888-405-4039, or e-mail us
through our website at tax.ohio.gov.
OHIO RELAY SERVICES FOR
THE HEARING OR SPEECH IMPAIRED
Telephone: 1-800-750-0750
A company granted operating authority by the USDOT is
assigned an MC number, MX number or FF number.