Ohio Dealer Titles and Sales Tax
Titles and Sales Tax
Four Parts to Every Transaction
1. Buy Vehicle &
Apply for Resale Title
2. Sell Vehicle & Collect Sales
Tax
3. Apply for Customer’s New Title & Pay Collected
Sales Tax
4. Report Sales Tax Collected
When you purchase a vehicle you will be required to
apply for title in your dealership name before you can
re-sell the vehicle. R.C. 4505.06
When you sell a vehicle
you will apply for title for your customer at which time you
will pay the sales tax that was collected. R.C. 4505.06
Obtaining a Resale Title for a Vehicle the Dealer Has
Purchased
or Taken as a Trade In
When you purchase
a vehicle or take a trade to resell you will be required to
transfer the title into your dealership name before
re-selling the vehicle. This can be done at your local Clerk
of Courts or through the
Ohio Title Gateway using your
Vendor License number.
TitleInformation
The
front of an Ohio title shows the issuing county, the county
of residence, title number, description of the vehicle, the
owner’s name and address, lien information, and the type of
title.
The back of an Ohio title is divided into two
main parts:
1. The title assignment
2. The title
application
The top portion of the title is the
assignment, where the owner of a vehicle assigns his or her
ownership interest to someone else. It is very important
that this information be fully completed including the
buyer’s acknowledgment of the odometer reading unless a
separate odometer statement has been provided.
The lower
portion of the back of the title is the application. This is
where the new owner applies for their Ohio title. This
information must be accurate and legible and must correspond
with the assignment.
When applying for a title in your
dealership’s name for a vehicle that has been traded or with
a vehicle that is purchased to resell, always check the face
of the title to be certain that all liens have been
discharged.
If you are going to be signing the actual
title for your customer with a Power of Attorney or Dealer
Assignment form a separate odometer statement will be
required to be signed by your customer. The word “NONE” must
be stated
for lien information if there is no lien on the
vehicle. Whoever signs for the dealership must include their
position such as title clerk, general manager,
etc.
You will also complete a Power of Attorney or Dealer
Assignment form which are discussed in greater detail later
in this training manual.
You can then apply for title so
you may resell the vehicle. There are two ways to apply for
title for a vehicle you will sell:
1. Hand deliver or
mail title and required paperwork to your local Clerk
of
Courts
2. Scan and upload copies of title and required
paperwork electronically to your local Clerk of Courts
through the Ohio Title Gateway
Option One-Hand
deliver or mail documents to Clerk of Courts:
You can
hand deliver, or mail the title & required paperwork to the
local Clerk of Courts and pay titling fees with a check,
cash, money order, or credit card (additional service fee
will apply when using credit cards). The Clerk of Courts
will complete the final paperwork, then mail the new title
directly to your dealership.
Option Two-Use Ohio Title
Gateway to scan and upload title copies and required
paperwork:
You may also use the Electronic Title
Application section of the Ohio Title Gateway to send this
information electronically. Your titles are still printed
and mailed from the Clerk of Courts office, but a memorandum
copy of the title will be printed at your dealership to
include in your files.
Electronic Title Application fees
can be paid electronically. We will cover Electronic Title
Applications in your dealer license training course.
Applying for a Customer’s Title for a Vehicle Sold by your Dealership
BEFORE YOU CAN APPLY FOR TITLE FOR A VEHICLE THAT YOUHAVE SOLD TO YOUR CUSTOMER, YOU MUST COLLECT THEN PAY SALES TAX TO THE STATE OF OHIO.
Ohio Dealer Sales Tax
Ohio dealers are required to collect sales tax at the
time of any retail sale of a vehicle to an Ohio resident.
You are also required to collect sales tax if you sell a
vehicle to any person that lives in Arizona, California,
Florida,
Indiana, Massachusetts, Michigan, or South
Carolina. Before you can charge sales tax you will be
required to apply for an Ohio Vendors license as discussed
earlier. A Vendors License can be obtained through the
County Auditor that the dealership is located. Each person
with a fixed place of business in Ohio from which taxable
sales are made are required
to have an Ohio Vendors
license. Vendors must have one license for each fixed place
of business.
When sales tax is required to be collected
you must charge the sales tax at the time of the sale. You
will charge sales tax on the total purchase price of the
vehicle including, any document fees, preparation charges,
delivery fees, warranties, undercoating, and service
maintenance contracts.
For example if you sell a
vehicle for $10,000 and include a document fee of
$250
dollars, you will charge sales tax on $10,250.
The sales
tax amount your customer pays depends upon where they live.
If
they live in Ohio you can easily look up your
customer’s tax rate at:
https://thefinder.tax.ohio.gov/StreamlineSalesTaxWeb/Default.aspx
Under the “Look Up Tax Rate” section, just enter your
customer’s home address or zip code.
For example, if
your customer’s home address is:
1 Capitol Square
Columbus, Ohio, 43215-4210
Click on
https://thefinder.tax.ohio.gov/StreamlineSalesTaxWeb/Default.aspx
Pay Collected Sales Tax & Apply for Title
Option
One-Hand deliver or mail documents and sales tax
collections:
After you have sold the vehicle and
charged sales tax you can take the title for the vehicle
that is sold to your dealership county’s Clerk of Courts
office.
You can hand deliver, or mail the title to the
local Clerk of Courts and pay the Clerk of Courts the sales
tax that is owed with a check, cash, money order, or credit
card (additional service fee will apply when using credit
cards). The Clerk of Courts will complete the final
paperwork, ensure the sales taxes collected are forwarded to
the state of Ohio and then mail the title directly to the
purchasing customer.
Option Two-Use Ohio Title
Gateway to scan and upload
documents then pay sales tax
collections automatically
Learn how to collect sales tax and complete titles in
your Dealer Training Couse,
Enroll Now