I will b purchasing a used car from a car dealership in Ohio, trading in my existing vehicle. Do I pay sales tax on the difference between the sale price and the trade in value, OR pay the sales tax on the purchased vehicle only?
HelloCustomer 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. However, the tax base is not reduced on the sale of a USED motor vehicle when a trade-in is allowed. Please refer to the following Ohio website which discusses common questions on sales tax. Refer in particular to item #21 which discusses trade in allowances. http://tax.ohio.gov/faqs/Sales/sales.stm#21 If this was helpful please press the Accept button. Thank youCustomer and let me know if you have more questions. I am happy to help you with whatever I can.
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad