FAQs - Sales and Use Tax

Is the consumer entitled to a tax credit for taxes paid to another state?

Basically, yes. When it is determined that Ohio use tax is due on the purchase of a motor vehicle from an out-of-state seller, a credit allowance shall be given for the amount of sales and/or use tax legally required to be paid to another state1 or jurisdiction. The amount of the credit allowance must be established by evidence to the satisfaction of the Clerk of Courts. When the amount of tax paid to another state or jurisdiction has been established, it shall be deducted from the total amount of use tax due Ohio. If the credit equals or exceeds the Ohio use tax due, no additional tax payment shall be required.

For vehicles that are leased, assume a motor vehicle was leased outside Ohio after Feb. 1, 2002, then subsequently moved into Ohio. The balance of the lease charges due after the leased vehicle is brought into Ohio will be subject to Ohio’s up front sales tax.  If the other state taxes a lease “up front,” credit will be given for the other state’s sales tax. If the other state’s tax equals or exceeds the appropriate Ohio tax, no additional tax will be due. If the other state taxes a lease on the monthly payments, no credit will be allowed for the tax paid to the other state for the months prior to the vehicle entering Ohio. Tax will be due “up front” on the total of the balance of the remaining lease payments.  

Credit cannot be given for sales, use, or similar taxes paid to another country, such as Mexico, Germany, etc.  See note below.

1Per Ohio Revised Code 5739.029(G)(2), “state," except in reference to "this state," means any state, district, commonwealth, or territory of the United States and any province of Canada.