AUTO TITLE MANUAL - Franklin County, Ohio

contract would list other fees and charges, such as residual value and early termination
fees. These items would be subject to the tax.
To determine the tax to be paid to the Clerk of Courts, calculate the entire tax due on the
total purchase price of the vehicle, which includes the remaining lease payments, the
residual value and any other fees associated with the purchase. Calculate the tax that was
previously paid (at the rate in effect when lease began) on the present value of the
remaining lease payments. Subtract the previously paid tax from the total tax. Submit the
final tax due, less the allowable discount. A copy of the sales contract showing the
separable charges must be submitted. If there is no separate line item that represents the
present value of the remaining lease payments, no credit allowance will be given.
While a leasing company may not physically obtain the certificate of title for the
purchaser (provide paperwork to purchaser and have purchaser obtain his/her own title),
the company must ensure payment of the proper amount of tax to the clerks and
obtain/retain receipts reflecting the tax payment.
14. Can a third party purchase a leased vehicle without payment of sales and use tax
twice?
Most motor vehicle lease agreements prohibit the sale of a leased vehicle from the leasing
company to anyone other than the lessee or to a motor vehicle dealer during the lease
term. The agreements are written this way to protect the lessee, in that the leasing
company cannot sell their vehicle to just anyone during the life of the lease. However,
there are times when the lessee wants out of the lease and finds someone (third party)
who is willing to purchase the vehicle from the leasing company.
When the above situation occurs, the lessee and the third party should (highly
recommended) enter into a written agreement (before the event occurs) that basically
stipulates the following:
1) The lessee has determined the amount required to purchase the leased vehicle from the
leasing company;
2) The third party agrees to provide the funds to purchase the vehicle from the leasing
company and pay the sales and use taxes that will be due;
3) The lessee and the third party understand that the leasing company will obtain the title
in the lessee’s name, as required by the lease agreement, and that the sales and use tax
payment will be in the name of the lessee; and
4) The lessee agrees to immediately assign the vehicle over to the third party for a price
of $0.00.
Special Note: If the third party has agreed to pay a higher “price” than the “price”
required by the leasing company (difference going to the lessee), the difference between
the “price” paid by the third party and the “price” paid to the leasing company should be
reflected as the “price” in the assignment portion of the title between the lessee and the