Tax News

CCH (cch.taxgroup.com) reports:

In a letter to motor vehicle dealers, the Ohio Department of Taxation explains the effect that the state budget bill has on the application of Ohio sales tax to purchases of motor vehicles by residents of specific states.
Following a line-item veto of certain motor vehicle provisions contained in the bill, the resulting law provides that effective August 1, 2007, Ohio motor vehicle dealers must collect Ohio sales tax on the sale of vehicles to out-of-state residents who reside in the eight states that charge sales tax to Ohio residents. The eight states are Arizona, California, Florida, Indiana, Massachusetts, Michigan, South Carolina, and Washington. Motor vehicle sales to residents of any other state are not subject to Ohio sales tax if the purchaser completes the affidavit for nonresident sales (Form STEC-NR) when applying for title. Motor vehicle leases to nonresidents continue not to be subject to Ohio sales tax.
The amount of tax to collect on sales to residents of the eight named states is the lesser of 6% of the sale price and the amount of sales tax the nonresident purchaser would pay in their home state, after taking into account any trade-in allowance to reduce the price before calculating the tax if permitted in that state. The letter provides the sales tax rates for the eight states and specifies whether trade-in allowances may be used to reduce the sales price before computing sales tax.
From August 1, 2007, through June 30, 2008, sales taxes collected on sales to nonresidents of the eight states are to be paid to the State of Ohio through the Ohio Business Gateway. Beginning July 1, 2008, the taxes on these sales are to be paid to the Ohio Clerk of Courts.
Taxes paid on these sales are due by the 10th of the month following the end of the month in which the sales took place. The newly-reduced vendor discount rate of 0.75% applies if the taxes are timely filed and paid. The decrease in the vendor discount rate was previously reported. (TAXDAY, 2007/07/02, S.22)
Subscribers to CCH Tax Research NetWork may view the letter.

Letter to Motor Vehicle Dealers , Ohio Department of Taxation, July 2007; H.B. 119, effective 90 days after filing with the Ohio Secretary of State.