Sales tax attorney Cincinnati
A taxable sale includes any transaction in which title or possession of tangible personal property or the benefit of certain services is, or will be, transferred or provided for a price. All retail sales are subject to the tax unless they are specifically excepted or exempted in Ohio’s sales tax law.
Exemptions from sales tax
In the state of Ohio, professional, personal, and insurance transactions are not taxable when any transfer of tangible personal property is a small item for which no separate charge is made.
We are commonly faced with questions surrounding discounts, coupons, and rebates. Here is an explanation on how sales tax applies.
- Price discounts – The tax base is reduced when the discount is allowed at the time of sale. Also qualifying are cash and term discounts allowed by a vendor and taken by the consumer.
- Coupons – The tax base is reduced when the customer uses a coupon supplied or published by the vendor free of charge. Manufacturers’ coupons that are redeemable by any vendor and for which the vendor will be reimbursed by the manufacturer do not reduce the tax base.
- Manufacturers’ rebates –- The tax base is never reduced by any form of rebate for goods and services sold. The vendor must charge tax on the total amount charged at the time of the sale.
- New motor vehicles (including all-purpose vehicles and off-highway motorcycles but does not include manufactured homes or mobile homes) –- the tax base can be reduced on the sale of a new motor vehicle when a licensed new motor vehicle dealer accepts a motor vehicle in trade. No other item accepted in trade can reduce the tax base of a motor vehicle.
For example, a new car is priced at $18,500 and the customer receives a trade-in allowance of $500, leaving the net difference $18,000. The tax base becomes $18,000.
Note: The tax base is not reduced on the sale of a used motor vehicle when a trade-in is allowed.
- New and used titled watercraft and outboard motors (includes titled personal watercraft) –- The tax base can be reduced on the sale of new and used watercraft and outboard motors when a licensed watercraft dealer accepts a watercraft, watercraft and trailer and/or outboard motor in trade.
Note: The tax base cannot be reduced when only a trailer is accepted in trade.
For all other sales, a trade-in allowance does not reduce the tax base.
Sales Tax Attorney Cincinnati