ST 2003-13 (Rev, 02/04) Towing Service - Updated - Supersedes
Information Release dated August 1, 2003. Questions
3,6,10, & 11 revised. Questions 17 & 18 added.
The purpose of this release is to provide information to
vendors and consumers to assist them in meeting their
obligations under the tax. Am. Sub. H.B. 95 of the 125th Ohio
General Assembly included several expansions to the sales tax
base. One such expansion appears in new Ohio Revised Code
("R.C.") section 5739.01(B)(3)(t), which applies the sales
tax to all transactions by which:
On or after August 1, 2003, motor vehicle towing service is
or is to be provided. As used in this division, "motor
vehicle towing service" means the towing or conveyance of a
wrecked, disabled, or illegally parked motor vehicle.
The following, in question and answer format, is some
additional information on the tax imposed on motor vehicle
I provide motor vehicle towing. What type of license
do I need?
A provider of towing service in Ohio must obtain a vendor’s
license for each fixed place of business where the towing
service provider is located. Vendor’s licenses are available
from the county auditor of the county in which the fixed
place of business is located. The application form for a
vendor’s license is available on the Ohio Department of
Taxation website: tax.ohio.gov under the tab for "FORMS."
Providers of towing service located outside Ohio that perform
towing service in Ohio need to establish a transient vendor’s
license account with the Ohio Department of Taxation. The
application form for a transient license is also available on
the Department of Taxation website.
I provide towing service from my automobile repair
shop. I already have a vendor’s license for the repair shop.
Do I need another vendor’s license?
No. The charges for, and the tax collected on the towing
service should be reported on the returns for the existing
What types of charges are included in a taxable motor
vehicle towing service?
All charges which are part of, and essential to the
performance of the towing service, are part of the taxable
price of the service. Some examples of taxable charges
associated with the provision of motor vehicle towing service
- Charges for digging snow from around a vehicle before
- Trip charges, to the extent a taxable service is
- Hook-up charges.
- Hourly charges, to the extent a taxable service is
- Charges to disconnect drivetrain before towing.
- Dolly charges.
- Charges for righting overturned vehicles.
I transport vehicles by lifting them onto a flatbed,
rather than towing them behind a tow truck. Are my services
Yes. The statute applies tax to "the towing or conveyance of
a wrecked, disabled, or illegally parked motor vehicle."
I transport new motor vehicles to dealers. Is this a
No. This is merely a transportation charge. The vehicles
being transported are not "wrecked, disabled, or illegally
I repossess vehicles for finance companies.
Occasionally, I have to tow the vehicle I am repossessing. Is
this a taxable service?
No. The service being provided to the finance company is the
repossession, not a towing service. Furthermore, the vehicle
being towed is not necessarily "wrecked, disabled, or
illegally parked." For the same reason, if the finance
company contracts with a third party to repossess the
vehicle, and the third party contracts with a tow operator to
pick up the vehicle, that tow would not be subject to the
tax, unless the vehicle is wrecked, disabled or illegally
I am towing a motor vehicle from Indiana into Ohio.
Is that service taxable in Ohio?
No. The taxability of towing is determined by where the
service originates. A towing service provider is not required
to collect Ohio tax on towing that originates in another
state. However, towing that originates in Ohio and ends in
another state is taxable in Ohio.
The statute applies to towing "a wrecked, disabled,
or illegally parked motor vehicle." If all I do is pull a
vehicle out of a ditch in which it is stuck, is that a
Yes. Since the vehicle is stuck in the ditch it is at least
I transport road construction machinery that has
broken down to locations where it is repaired. Is this
No. Under R.C. 4505.01(A) construction machinery not designed
for general highway operation does not fall under the
definition of a "motor vehicle." Therefore, the
transportation of that equipment is not a "motor vehicle
I provide roadside assistance to motorists under a
contract with an automobile club. This assistance can include
changing flat tires, jump starting vehicles, opening locked
vehicles or towing inoperative vehicles. The automobile club
pays me for these services. However, if a tow is provided the
club only pays up to a maximum number of miles. If the tow
exceeds the allowed mileage, the club member must pay the
additional towing charge. How do I charge tax?
Charges for roadside assistance that does not involve towing
may or may not be taxable. Some services such as jump
starting a vehicle or opening locked doors, are not taxable
services. While others such as changing a tire or making
minor repairs, are taxable as repair or installation
services. Tax must be collected from the automobile club on
all towing service for which the club pays. Furthermore, tax
must be collected from the club member on any portion of a
towing charge the member pays.
I provide roadside assistance under a contract with
an automobile manufacturer. The manufacturer provides the
roadside assistance as part of a new vehicle warranty. When
an owner has trouble with a warrantied vehicle, the
manufacturer dispatches me to assist. If the vehicle needs to
be towed, I tow it to the nearest authorized dealer. For this
service I receive payment from the manufacturer. How do I
collect tax on this transaction?
In this case the towing service is being provided to the
manufacturer. Tax should be charged to the manufacturer for
the cost of any towing done under the roadside assistance
contract. As noted in the question above, any charges for
roadside assistance that do not involve towing (e.g. jump
starting a vehicle or opening locked doors) are not taxable.
I tow a disabled or wrecked vehicle to a repair shop.
The repair shop pays my towing fee and re-bills the fee to
the vehicle owner, or to a manufacturer if the vehicle is
under warranty. Do I collect tax on this
In this situation, the repair shop should provide the tow
operator with an exemption certificate showing "resale" as
the reason for exemption. The repair shop should collect tax
from the warranty provider or customer (or, if applicable,
the customer’s insurance provider) when it re-bills the
I tow illegally parked motor vehicles under a
contract with a city. The cars are towed to the city impound
lot. My towing fee is paid by the city. Is this
No. Sales to a political subdivision of the State of Ohio are
Are charges for towing a motor vehicle that are paid
by a vehicle owner to a municipality subject to tax?
No. R.C. 5739.02(B)(22) provides an exemption for sales of
services provided by the State of Ohio or any of its
I tow illegally parked vehicles to my own lot. I
charge owners a towing fee and a storage fee to retrieve
their vehicles. Do I collect tax on both the towing fee and
the storage fee?
Yes. Both the towing and the storage activities are taxable
on and after August 1, 2003. [For storage, see R.C.
5739.01(B)(8) and the Department of Taxation’s Information
Release titled Storage, which is available on the
Can I claim exemption on equipment purchased to
perform my towing service?
Tow truck operators regulated by the Public Utilities
Commission of Ohio as a for-hire motor carrier are providing
highway transportation for hire within the meaning of R.C.
5739.01(Z). Accordingly, a regulated towing operator may
claim exemption under R.C. 5739.02(B)(32) on purchases of:
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 by
a person engaged in highway transportation for hire.
I provide towing service to a person that is engaged
in highway transportation for hire (e.g. trucking company).
Should I collect the sales tax?
Yes. As shown in question 16, the exemption for persons
engaged in transportation for hire applies to the sale,
lease, repair, and maintenance of, parts for, or items
attached to the motor vehicle. Towing service would not be
included under this or any other exemption.
I provide a "tractor swap" service for a trucking
company. That is, a vehicle is disabled on the road. I go to
trucking company, pick up a good vehicle, and tow it to the
site of the disabled vehicle. I transfer the load from the
disabled vehicle to the good vehicle (hourly charge), and tow
the disabled vehicle back to the trucking company. Is any of
this service taxable?
Yes, all charges mentioned in the question would be subject
to the tax.
If you have questions regarding any matter covered in this
release, please call 1-888-405-4039.
OHIO RELAY SERVICE
FOR THE HEARING OR SPEECH IMPAIRED