Ohio Vehicle Tax: Calculating Sales and Annual Fees
Understand the total cost of vehicle ownership in Ohio. Learn how sales tax is determined at purchase and what to expect for your annual registration renewal.
Vehicle owners in Ohio are subject to two primary forms of taxation: a one-time sales and use tax due upon acquiring a vehicle, and an annual registration fee to maintain valid license plates. The sales tax is calculated on the vehicle’s purchase price and varies by county, while the yearly registration is a combination of state and local fees.
Calculating Ohio Vehicle Sales and Use Tax
The sales tax on a vehicle is a combination of the statewide rate of 5.75% and any additional permissive taxes levied by the county or a regional transit authority where the owner resides. This means the total tax rate can be as high as 8% in some areas. The tax is applied to the “purchase price” of the vehicle, which can be adjusted by certain factors.
A factor in calculating the tax is the treatment of a trade-in. When a buyer trades in a vehicle as part of the purchase of another vehicle, the value of the trade-in is subtracted from the new vehicle’s price before the sales tax is applied. For example, if you purchase a car for $30,000 and receive a $10,000 allowance for your trade-in, the sales tax is only calculated on the remaining $20,000.
Conversely, other common price reductions do not lower the taxable amount. Manufacturer rebates, cash-back offers, and any cash down payment made by the buyer do not reduce the vehicle’s purchase price for tax purposes. If a vehicle costs $30,000 and the manufacturer offers a $2,000 rebate, the sales tax is still calculated on the full $30,000 price.
Paying the Tax on Vehicle Purchases
When buying from a licensed Ohio dealership, the process is handled for you. The dealer will calculate the sales tax based on your county of residence, collect it as part of the total purchase price, and manage the necessary paperwork to title the vehicle in your name.
For private party sales, the buyer is responsible for paying the tax. The buyer must take the signed title to their local County Clerk of Courts Title Office, declare the purchase price, and pay the calculated tax. The office will then issue a new title in the buyer’s name.
Special Vehicle Scenarios and Considerations
Moving to Ohio
New residents moving to Ohio with a vehicle may owe a use tax if the sales tax paid in the previous state was less than Ohio’s rate. Upon titling the vehicle, the new resident must provide proof of the sales tax paid. The title office will then collect any difference.
Leased Vehicles
Sales tax on leased vehicles is calculated on the total of the lease payments, not the vehicle’s full value. The leasing company pays this tax upfront and incorporates it into the monthly payments. If the lessee purchases the vehicle at the lease’s end, they must pay sales tax on the buyout price.
Gifts and Family Transfers
Vehicle transfers between certain family members or as a gift may be exempt from sales tax. The recipient must complete a notarized affidavit stating that no payment was exchanged for the vehicle. This form is presented to the County Clerk of Courts Title Office when applying for the new title.
Annual License Plate Renewal Fees
In addition to the one-time sales tax, vehicle owners must pay an annual registration fee. This fee is a set amount, not based on vehicle value, and is comprised of several components:
- A base registration fee of $31 for a standard passenger vehicle.
- A county permissive tax, which adds between $5 and $20.
- An additional $100 fee for hybrid vehicles.
- An additional $200 fee for electric vehicles.
Vehicle owners receive a renewal notice from the Bureau of Motor Vehicles and can complete the payment online, by mail, or in person at a Deputy Registrar license agency.