AUTO TITLE MANUAL - Franklin County, Ohio

NO – When a vehicle is under a valid lease and the lessee is attempting to trade-in the
vehicle that is titled in the name of the leasing company. Under the terms of most lease
agreements, the leasing company (during the life of the lease) can only sell (transfer title
for consideration) the leased vehicle to the lessee or to a dealer. If the leasing company
sells the vehicle to a dealer, it is no longer available to be used as a trade-in by the lessee.
Note: The answer would be YES if the lessee first purchased the leased vehicle (paying
sales tax on the purchase price paid to the leasing company), had title issued in the
lessee’s name, and then used the vehicle as a trade-in on the purchase of a new motor
vehicle.
YES – When a watercraft, outboard motor or personal watercraft is traded for a new/used
watercraft, outboard motor, and/or personal watercraft and the seller (located in-state or
out-of-state) is, at the time of sale, licensed as a watercraft dealer through the Ohio
Department of Natural Resources, Watercraft Division. License format is OH NNNN ZZ.
NO – When a watercraft, outboard motor, or personal watercraft is traded for a new/used
watercraft, outboard motor or personal watercraft and the seller (located in-state or outof-state)
is not, at the time of sale, licensed as a watercraft dealer through the Ohio
Department of Natural Resources, Watercraft Division.
NO – When a motor vehicle is traded for a watercraft, outboard motor or personal
watercraft.
8. Are court-ordered title transfers subject to the sales or use tax?
Generally, NO since the courts will order the transfer of title without consideration
(divorce, dissolution, estate settlement, etc.). If, however, the court orders the transfer of
title with consideration to be paid (including cancellation of debt) by the new titleholder,
the transfer would be subject to the sales or use tax based on the amount paid. If no
consideration and a court order, use ATPS exemption codes “CO: Court-ordered transfer
with no consideration” or “DV: Divorce – court-ordered transfer with no consideration”
or “IH: Inheritance with no consideration, includes surviving spouse.”
9. Can the clergy of a church obtain a title in his/her name without paying sales or
use tax?
NO. The exemption applies to the church, not the clergy. To be exempt, the vehicle
would have to be titled in the name of the church.
10. How are leases taxed?
Effective Feb. 1, 2002, Ohio changed the way sales tax was charged and collected on
leases. The new method applies to many items, but this question will focus on motor
vehicles, watercraft and outboard motors. There is one exception to motor vehicles that
are designed by the manufacturer to carry a load of more than one ton. Those vehicles
will be taxed on the old method, on each monthly lease payment.