Teens and Taxes

Towing Services

towtruck Motor vehicle towing service means the towing or conveyance of a wrecked, disabled, or illegally parked motor vehicle. See below for additional information on the tax imposed on motor vehicle towing.

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 "More Forms."
Providers of towing service located outside Ohio that perform towing service in Ohio need to acquire a transient vendor’s license from the Ohio Department of Taxation. The application form for a transient license is also available on the Department of Taxation website.

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 include:

  • Charges for digging snow from around a vehicle before towing.
  • Trip charges, to the extent a taxable service is performed.
  • Hook-up charges.
  • Hourly charges, to the extent a taxable service is performed.
  • Charges to disconnect drivetrain before towing.
  • Dolly charges.
  • Charges for righting overturned vehicles.

I transport new motor vehicles to dealers. Is this a taxable service?
No. This is merely a transportation charge. The vehicles being transported are not "wrecked, disabled, or illegally parked."

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 parked.

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 taxable service?

Yes. Since the vehicle is stuck in the ditch, it is at least temporarily disabled.

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 political subdivisions.

If you provide towing services, you may need a commercial driver’s license. It depends on the size of the vehicle you will drive and the weight you will tow. Contact the Ohio Bureau of Motor Vehicles at (614) 752-7500 for more information. Information and registration forms can also be found online at www.bmv.ohio.gov.  You may also need to register with the Public Utilities Commission of Ohio’s (PUCO) Motor Carrier Division. Contact the division at (800) 686-7826. Information and registration forms can also be found online at www.puco.ohio.gov.

If you will tow oversize loads, you may need a special hauling permit from the Ohio Department of Transportation (ODOT). Contact ODOT’s main office at (614) 466-7170 or your ODOT District Office for more information. Permit and fee information can also be found at www.dot.state.oh.us