Are you a resident of Ohio or planning to move there? Are you planning to buy a new car or take your car along to Buckeye State? Along with the registration, auto insurance, license plate, and driver’s license, it is also critical to know about the car sales tax. So, how much is the Ohio sales tax on cars?
Of course, Ohio has a statewide tax rate. But your tax rate depends on your county and other local taxes. And be aware that driving a car can be risky without paying the sales tax. Don’t worry; our article will detail you on the sales tax for cars in the state.
What is the sales tax on cars in Ohio?
The sales tax rate for cars is 5.75%, which applies to all car sales in the state. In addition to this, you must also pay the county or local sales tax in your home county. The county tax rate is between 0.75%-2.25%. The state has an average combined sales tax rate of 7.223%, including state and local taxes.
Does trading in a car reduce sales tax in Ohio?
Many dealerships will permit you to trade in your current car in exchange for a credit toward buying a new car. For instance, you may trade in your old car and obtain a $5,000 credit toward the purchase price of a new car worth $20,000. So, this reduces your out-of-pocket expense to $15,000. Since the value of your trade-in isn’t subjected to the sales tax rate, the taxable price of your new car will be $10,000. So, it saves the sales taxes you may have paid on the $5,000 value of your trade-in.
How are rebates and incentives taxed?
Some dealers also offer financial incentives or manufacturer rebates on a car’s sticker price. For instance, if there is a $1,000 rebate on a $15,000 car, you must pay $14,000 from your wallet. The tax rate for cars gets charged before applying rebates or incentives to the sticker price, so the customer will pay the sales tax rate as if it costs $10,000.
How do you figure sales tax on a car in Ohio?
So, now you know how much is the sales tax rate. Follow these steps to calculate how much you must pay.
- Check the car’s total buying cost. Include shipping costs if applicable.
- Look for the appropriate state and county sales tax rates depending on the location of purchase or delivery.
- Check to see if a special sales tax applies to your purchase.
- Multiply the buying cost by the sum of the interest rates applicable.
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Does Ohio have a sales tax on used cars?
Yes. The sales tax rate for used cars is around 5.75% of the car’s buying price.
What other fees must you pay while buying a car in Ohio?
Whether it be new or used, now you know how much to pay as sales tax, however, it is not the only cost you incur. These are the other costs you must be ready to bear while buying a car in the state.
There will also be documentation fees from the dealer. It covers the costs of preparing and filing sales tax forms, sales contracts, and others. These fees are extra to the taxes and DMV fees mentioned above. The average documentation fee in Ohio is $250. Since dealers fix this charge, they might vary from one dealership to the next or between different car models.
Does Ohio collect sales tax on out-of-state car purchases?
Whether you buy a car in the state or another state, you must register it, pay for the plates and title transfer, and pay any applicable state and county sales tax. You will pay the fixed state sales tax rate of 5.75% plus added county taxes, depending on where you live and do the car registration. For instance, you will pay around 7.25% in state and county sales tax if you live in Fulton.
Do you pay sales tax on a used car from a private seller in Ohio?
Yes. Whether you buy the car from a dealer or a private seller in Ohio, you must pay 5.75% plus applicable local tax on the car’s buying price. Some counties in the state charge greater local taxes than others. The following table shows the combined sales tax rate in the state for the most populated counties.
Who pays sales tax when selling a car privately in Ohio?
It will always be the buyer based on the buying price of the car. If you’re the buyer, making a bill of sale or a purchase agreement you and the seller can keep for your records will be a good idea.
Do you have to pay sales tax when buying a car from a family member in Ohio?
Yes. Even if you get a rebate on the buying price, the amount paid is subject to sales tax in the state.
Do you have to pay sales tax on a gifted car in Ohio?
There is no Ohio sales tax on cars for gifted cars. If you receive the car as a gift, you needn’t pay tax if the car price gets listed as $0 on the title.
Does the military pay sales tax on cars in Ohio?
Yes. If a member of the armed forces (resident) buys a car in Ohio, they will have to pay car sales tax in Ohio.
When you’re exempt from paying Ohio car sales tax?
All vehicle sales in Ohio attract sales taxes. But there may be exceptions if you buy vehicles for these purposes.
- Rental transportation
- Direct farming
- Churches and nonprofit organizations
- Public utilities and transportation services
Visit the website of the Ohio Department of Taxation to know whether you’re eligible for an exemption.
What is the sales tax on new cars in Ohio?
The rate is 5.75%. But the exact rate you pay depends on the county and local tax rates.
What is the sales tax on cars in Franklin County, Ohio?
You must pay a tax rate of 7.5% in Franklin County.
What is the sales tax on cars in Columbus, Ohio?
It will be around 7.5% of the car’s buying price.
What is car sales tax in Cincinnati, Ohio?
It will be 7% of the car’s buying price with any extra fees the dealership charges.
What is the sales tax on a car in Hamilton County, Ohio?
You must pay a tax rate of 7.8% in Hamilton County.
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