The Politics of Car Shopping in Ohio
- Sales Tax News
- Sep 9, 2013 | Gail Cole
Before the Internet, anyone interested in buying a car perused local auto dealerships or scanned newspapers for good deals. While that still occurs, there's a new way to hunt for good deals: online. The perfect car may not be at the lot down the street or even in the next town--it may be at a dealership in another state. Savings can be considerable; it really can be worth a drive, or even a flight, to purchase a new car.
Ohio Department of Taxation is any indication, savvy shoppers do come to Ohio specifically to buy a car and take it home.
The release, Sales and Use Tax: Sales of Motor Vehicles to Nonresidents of Ohio, is a revision of a previous information on the same subject. It explains that Ohio state law exempts sales to most nonresidents who remove the newly purchased vehicle from Ohio to be titled, registered or used outside Ohio.
Seven non-exempt states
However, motor vehicle dealers are required to collect sales tax from nonresidents intending to register the vehicle in one of the following seven states:
- Michigan and
- South Carolina.
Nonresidents from these states must pay the lesser of two amounts:
- The sales tax due in Ohio; or
- The amount of sales tax the Nonresident would be required to pay in the state of titling, registration or use.
If the state in which the vehicle will be titled, registered and used allows a trade-in allowance to reduce the taxable price of the purchased automobile, Ohio will allow it.
Only in South Carolina are rebates and other cash-back offers (paid by someone other than a dealer) allowed to reduce the taxable amount of the sale.
Still interested in purchasing a car in Ohio? If so, and if you live in one of the seven states listed above, know the tax you will owe: read the information notice.
If you are in the business of selling cars in Ohio, know the proper amount of tax you're required to collect from nonresidents intending to take the vehicle out of state for use, registration and titling. Read that information notice.
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