AUTO TITLE MANUAL - Franklin County, Ohio

The new law provides that the tax will now be collected up front, on the amount to be
paid by the lessee over the term of the lease. The tax is to be collected by the dealer,
based on the rate in the lessee’s county of residence. The dealer remits the tax directly to
the State of Ohio on a tansient vendor license. The tax is not paid to the Clerk of Courts
at the beginning of the lease. When the vehicle is titled in the name of the leasing
company, no tax is paid as the leasing company has an exemption based on resale.
At the end of the lease, the customer may choose to purchase the vehicle. The leasing
company will collect the tax on the agreed upon “buyout” price, again based on the rate
in the lessee’s county of residence. This tax IS paid to any office of the Ohio Clerk of
Courts before title can be issued.
In the event of a fleet lease, a leasing company may lease several vehicles to a company
located in one county. However, the vehicles may be used by employees in several
counties. The sales tax rate to charge is the rate in the county that is the primary property
location of each vehicle, which is the county where the vehicle is garaged overnight.
For more information on the taxing of leases, please see Information Release ST 2003-
08, Leases and Rentals, issued July 2003.
11. If a motor vehicle dealer accepts cash down payments, must the motor vehicle
dealer charge sales tax when the vehicle is to be leased? If yes, how is the tax paid?
Cash down payments are subject to the sales tax.
Prior to Feb. 1, 2002, if a down payment was collected by the leasing dealer, the leasing
dealer would also collect the sales tax. The leasing dealer would then remit the tax to the
State of Ohio, like any other sales tax payment.
If a down payment is paid to the motor vehicle dealer, the motor vehicle dealer will also
collect the sales tax and either remit it directly to the State of Ohio on the dealer's
transient sales tax return or forward it to the leasing dealer so that the leasing dealer can
remit it to the State of Ohio.
Note: In either of these situations, tax is not remitted to the Clerks of Courts because the
motor vehicle will be titled in the leasing company’s name under the "Resale - leasing"
exemption.
As of Feb. 1, 2002, the dealer collects the cash down payment as part of the price paid for
the lease of the motor vehicle, watercraft or outboard motor. It is charged at the rate in
the lessee’s county of residence, and remitted to the State of Ohio on the dealer’s
transient vendor’s license. For more information on leases, please see FAQ #10, above.