AUTO TITLE MANUAL - Franklin County, Ohio

ecomes a guarantor is a transfer for a consideration and subject to the tax. The tax base
would be the total amount of the mortgage assumed plus any other consideration given.
(F) The transfer of a motor vehicle as the result of the transferee (new titleholder) paying
off the mortgage in the name of the transferor (previous titleholder) is a transfer for a
consideration. The tax base would be the amount of the pay off plus any other
consideration given either in trade or money.
45. How are lease assumptions of motor vehicles and other tangible personal
property taxed?
A lease assumption is when a lessee has another person assume the lease payments and
lease end responsibilities. This should not be done without the lessors’ knowledge or
approval.
If the lease is/was consummated in Ohio after Feb. 1, 2002, and there are no changes to
the original leasing agreement, there is no sales tax due to the State of Ohio.
If an Ohio resident assumes an out of state lease, Ohio use tax may be due and payable up
front on the remainder of the lease payments. If the other state required the tax to be paid
on the monthly installment, Ohio tax is calculated on the remaining payments and paid up
front to the leasing company. If the other state collected taxes up front, Ohio tax will be
calculated on the payments remaining upon entry into Ohio, credit will be given for taxes
paid to the other state and the leasing company will collect any additional tax due.
46. What is the correct tax rate to charge a customer on the sale or lease of motor
vehicles, watercraft or outboard motors?
On the sale of a titled motor vehicles, watercraft or outboard motors, the tax rate would
be the rate in the county of residence of the purchaser.
On the lease of titled motor vehicles, watercraft or outboard motors, whether the lease is
paid by one upfront payment, (no monthly payments), or by a stream of payments, the tax
rate to apply is the rate in the county that is the primary property location of the
vehicle(s) or watercraft. This may be the county of residence of the lessee, or in the case
of multiple vehicles leased to one person and the vehicles are used in several counties, the
county where the vehicles are garaged overnight would apply.
On the sale or lease of a documented watercraft, the tax rate to apply is the rate where
the customer takes possession of the watercraft. Any subsequent taxable charges on the
lease will be sourced to the primary property location for the period in which the charges
are incurred.
“Primary property location” means an address for tangible personal property provided by
the lessee or renter that is available to the lessor or owner from its records maintained in
the ordinary course of business, when use of that address does not constitute bad faith.