Does a leasing company charge sales tax on the “sale” of its leased vehicles? If so, how is the tax paid to the State of Ohio?
Under Ohio sales and use tax law, a motor vehicle leasing company is required to collect sales and use tax on the “sale” of any of its vehicles, unless the purchaser has a statutory basis for claiming exception or exemption. The leasing company is required to collect the gross amount of sales and use tax based on the rate in effect in the purchaser’s county of residence. The leasing company would then remit the net amount (gross tax less allowable discount) of sales and use tax to any county Clerk of Courts, stating the purchaser’s county of residence so the title can be issued. In case of an audit by the Ohio Department of Taxation, the leasing company must be able to show that sales and use tax was charged and collected and that this tax was paid to the Clerk of Courts. Clerks of Courts issue receipts reflecting payment of taxes and associated title fees, which should be retained in the transaction file as evidence that the tax has been paid. Early Buyout. For leases entered into aft
Under Ohio sales and use tax law, a motor vehicle leasing company is required to collect sales and use tax on the “sale” of any of its vehicles, unless the purchaser has a statutory basis for claiming exception or exemption. The leasing company is required to collect the gross amount of sales and use tax based on the rate in effect in the purchaser’s county of residence. The leasing company would then remit the net amount (gross tax less allowable discount) of sales and use tax to any county Clerk of Courts, stating the purchaser’s county of residence so the title can be issued. In case of an audit by the Ohio Department of Taxation, the leasing company must be able to show that sales and use tax was charged and collected and that this tax was paid to the local Clerk of Courts. Clerks of Courts issue receipts reflecting payment of taxes and associated title fees, which should be retained in the transaction file as evidence that the tax has been paid. Early Buyout. For leases entered in
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- Does a leasing company charge sales tax on the "sale" of its leased vehicles? If so, how is the tax paid to the State of Ohio?
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