FAQs - Sales and Use Tax

What is sales tax?What is the state tax rate?What is the discount rate for sales tax returns filed timely?What are the local tax rates?What is a use tax?How is the use tax paid?Do businesses need to be concerned with use tax?Do I owe use tax on inventory items that are temporarily used in a taxable manner?As a nonresident business, do I owe use tax on items of tangible personal property when the items are brought into Ohio and temporarily used within Ohio?Should out-of-state sellers collect Ohio's use tax?Do I have to collect another state's use tax?Is sales or use tax due on purchases over the Internet?Can I get a refund if I overpay my tax?What must I do to make taxable retail sales in Ohio?Are there different vendor's licenses for different types of businesses?Are vendor's licenses transferable? Can my vendor's license be suspended or revoked?When a county's sales tax rate increases, will I be reimbursed for the cost of programming my cash registers? How and when is the tax collected?What records must be kept?What is the tax base?When do I file a tax return?Can I file my return via the Internet?What do I do if my check has not cleared my bank?What if my bank does not honor my check?Can sales tax be remitted by electronic funds transfer (EFT)?Can my filing frequency ever be changed?Can I report two or more licenses on the same return?What are the penalties for not filing tax returns on time and/or not paying collected taxes?How do I handle bad debts and returned merchandise?How will I know if a sale is exempt from tax?How do I obtain a sales tax exemption number?What are my responsibilities when selling alcoholic beverages?Can my liquor permit be transferred if sales/withholding tax is owed?Can my liquor permit be renewed if I owe sales/withholding tax?What is successor liability?Can I be held responsible for the debts of a corporation?Are there any rules that cover particular tax issues and how can they be obtained?Must I obtain other licenses or permits to conduct retail sales?How is a vendor's license canceled?Can you provide an updated list of sales tax exception/exemption codes that may be available for motor vehicles/watercraft?Are members of the armed services exempt from sales or use tax?When must the Clerks of Courts obtain an exemption certificate or obtain or issue form T-610 or form T-615?Does the winner of a raffle, contest or lottery owe any Ohio sales or use tax?Do rebates reduce the "price" for calculating sales or use tax?Do dealer cash discounts reduce the price for calculating sales or use tax?Does a trade-in reduce the price when calculating sales or use tax?Are court-ordered title transfers subject to the sales or use tax?Can the clergy of a church obtain a title in his/her name without paying sales or use tax?How are leases taxed?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?Are out-of-state leasing dealers/companies required to be registered for collection of sales or use tax? If a motor vehicle is leased to an Ohio resident by an out of state dealer, how is the tax collected and remitted? Does a leasing company charge sales tax on the "sale" of its leased vehicles? If so, how is the tax paid to the State of Ohio?Can a third party purchase a leased vehicle without payment of sales and use tax twice?Is an out-of-state leasing company required to be registered with the Ohio Department of Taxation as a seller (account number 99-XXXXXX) when all of its customers are residents of other states or countries?Are farmers exempt from paying sales or use tax on vehicles that are licensed to operate on the highways?Who is entitled to claim exemption from sales tax based on the "Highway Transportation for Hire" (TH) exemption?Who is entitled to pay tax to the Clerks of Courts net of the allowable discount?Is GAP taxable?Is the amount charged for the federal excise tax (FET) included in the tax base for calculating sales tax?Can a motor vehicle dealer obtain title to a watercraft under a "resale" exemption?What is included in the "price" of a motor vehicle when calculating the sales and use tax? Is the consumer entitled to a tax credit for taxes paid to another state?Can a pawnbroker obtain title to a motor vehicle under a resale exemption? Can the providers of transportation services claim exemption from the sales or use tax on the purchase of motor vehicles such as taxicabs, limousines, or charter buses? Are there sales and use taxes due on a self-assembled motor vehicle or watercraft?Does a dealer title a "parts truck" and pay tax when the title is issued?Can an Ohio title be issued on a watercraft, outboard motor, or personal watercraft purchased in Ohio for use in Ohio by a resident of another state?Is an ambulance service entitled to claim exemption from sales and use tax under the "used directly in the rendition of a public utility service" exemption?Can a manufacturer obtain title to a motor vehicle without paying sales tax when the vehicle was purchased back by the manufacturer pursuant to the lemon law?If the manufacturer repurchases my motor vehicle, watercraft or outboard motor, pursuant to the lemon law, and replaces it with another vehicle, do I have to pay tax when applying for title on the second vehicle?How do I obtain a refund if tax has been paid in error? What is a "new" motor vehicle as it pertains to the trade-in allowance? How is a utility trailer taxed and where is the tax paid?Can a dealer donate an item (motor vehicle, watercraft and/or outboard motor) to a nonprofit, charitable organization and avoid payment of tax? How is tax paid on golf carts?Can a person trade in more than one motor vehicle on the purchase of a new motor vehicle and deduct the trade-in value of both vehicles?Is mobility-enhancing equipment added to a motor vehicle subject to the sales or use tax?Are auto auctioneers required to collect and remit sales tax? What happens when a nonresident purchaser returns to Ohio?Can a used motor vehicle dealer purchase a new motor vehicle under the "resale" exception?How are taxes calculated on a brokered watercraft sale?Can you provide more examples of situations where there is no tax due on the transfer of title of a motor vehicle, all-purpose vehicle, off-highway motorcycle, titled watercraft, titled outboard motor, or titled personal watercraft?Can you provide some examples of "consideration" other than money that is given in exchange for a certificate of title?How are lease assumptions of motor vehicles and other tangible personal property taxed? What is the correct tax rate to charge a customer on the sale or lease of motor vehicles, watercraft or outboard motors?If a customer is allowed to use a rented motor vehicle paid for by a motor vehicle dealer while their vehicle is being repaired or serviced at or through the motor vehicle dealer’s location and the repair is covered by a provision in a warranty, service contract, maintenance agreement, or other contract or agreement, but the contract or agreement does not specifically provide for the use of a vehicle, does the customer, dealer, or owner of the rented vehicle owe sales or use tax for the rented vehicle?What is considered a rented motor vehicle?May the manufacturer, warrantor, or other entity reimburse the repairer for the cost of the rented vehicle by means other than a per diem amount? My manufacturer has a program which allows a dealer to provide a new vehicle to a consumer when a repair or service is being done under warranty. I am required to keep the vehicle in “loaner” status for 90 days. The vehicle is given free of charge to the consumer, and the manufacturer pays me a lump sum at the end of 90 days for the use of the vehicle, which I can use to discount the price of the car. Do I pay use tax for the use of the car during the 90 day loaner period?