Sales Tax Exemption

arrbsthw · Jan 16, 2008

Just a question for general purposes...if you buy a truck and are
leased to a carrier..are you exempt from sales tax.
I know I have seen this spoken about but don't fully understand
how it works.

Where are the rules for this? Where do you find them? Is it written down somewhere or just something you think is correct?

Scenerio is: Person has Sales & Use tax #, Common carrier authority is voluntarily revoked because leased onto carrier. If new truck is bought and it is leased onto carrier would
sales tax have to be paid or can because it is leased on
would it qualify for exemption.

greg334 · Jan 16, 2008

First before anything, call your state.

In Michigan, using the truck for interstate commerce will exempt me from any sales or use tax. But if I use it only for work within the state or occasionally outside the state like Ohio or Indiana (less then 5%), I have to pay.

arrbsthw · Jan 16, 2008

I know that in Georgia if I have a common carrier authority I can be exempt from
sales tax if equipment goes across state lines. The thing I don't know is if authority has been cancelled (voluntarily) because of leasing to a company does this still apply.

dhalltoyo · Jan 16, 2008

Check with your State Department of Taxation.

Never depend on the F & I Manager, or sales person, at the dealership. Generally speaking, they do not have a clue about commercial usage and sales tax exemptions. Why? The majority of their sales are noncommercial; they sell cars and trucks for personal use.

I always get a tax exempt form from the Title Bureau and a copy of Ohio's Code long before we get to the signing date. You have to give them advance notice so there are no problems at delivery.

In Ohio you only have to provide an MC number on the Tax Exempt Form. I have purchased two vans here in Ohio and both were exempt from sales tax.

LDB · Jan 16, 2008

In Texas, unless something has changed, if it's plated apportioned you don't pay sales tax and if it's plated other than apportioned you pay.

RichM · Jan 16, 2008

Florida is also that way. You are exempted from sales tax if you are leased to a Common Carrier with full ICC authority

TeamCaffee · Jan 16, 2008

Ditto of what Rich has to say for Missouri.

JohnO · Jan 16, 2008

TeamCaffee said:
Ditto of what Rich has to say for Missouri.

Ditto of what Rich has to say for Florida then ditto Team Coffee has to say for Missouri goes for New Jersey.

Say that 10 times without tripping over your tongue

arrbsthw · Jan 16, 2008

Ok so when you go to tag office to change over, what do u have to give to them.
the company DOT #, Icc#, copy of lease? I believe the company dot # is on my
tag now. When the state sends out bill for tax, do u just write exempt on the bill and send back?

greg334 · Jan 16, 2008

arrbsthw said:
Ok so when you go to tag office to change over, what do u have to give to them.
the company DOT #, Icc#, copy of lease? I believe the company dot # is on my
tag now. When the state sends out bill for tax, do u just write exempt on the bill and send back?

I had to provide a bill of sale, the title and a copy of the lease.

arrbsthw · Jan 16, 2008

Thanks for the information everyone.

geo · Jan 16, 2008

in va you pay sales tax if it is reg in va
if reg in some other state you don't have to pay tax
also have to pay personal pro tax to

RLENT · Jan 16, 2008

dhalltoyo said:
In Ohio you only have to provide an MC number on the Tax Exempt Form. I have purchased two vans here in Ohio and both were exempt from sales tax.

In Ohio this may be dependent on the specific title bureau you go to - when we registered the Sprinter they wanted a valid, signed copy of the lease - not just an MC number. FWIW.

dhalltoyo · Jan 19, 2008

If a non-commercial van (new or used) is purchased through a dealer, the sales tax is collected at point-of-sale. For a commercial purchase, I have yet to meet of any owner that had to provide a lease agreement at signing.

After making the purchase from a dealer in Ohio you have to go to a License Bureau to get Commercial Vehicle Plates. They didn't even require proof of the GVWR, they just asked me to pick the class from a chart that was handed to me. Your license plate fee is based upon that class.

Purchasing a vehicle from an individual (Private Party Sale) would require the sales tax to be collected at the Title Bureau.

And considering how many folks have tried to bend the rules on sales tax; you know, like claiming the purchase price to be $2500 when they actually paid someone $25000 for the van, it is no wonder a Title Bureau would ask for documentation to verify one's use of a particular MC number.

rmctt2 · Jan 19, 2008

I just purchased Sprinter from Caldwell they told me I am exempted from sales tax at purchase time because I live in NC !
What do I need to do in NC ??
I deadheaded home from Dayton TN to go to to Register on Tuesday .

RLENT · Jan 19, 2008

dhalltoyo said:
For a commercial purchase, I have yet to meet of any owner that had to provide a lease agreement at signing.

After making the purchase from a dealer in Ohio .....

Purchasing a vehicle from an individual (Private Party Sale) would require the sales tax to be collected at the Title Bureau.

Well our scenario was ..... none of the above. We purchased the vehicle (for commercial purposes) out of state, in West Virginia. We had the option of the WVA dealer charging us Ohio sales tax ...... or not ....... since the State of Ohio only requires that any sales tax that is due be paid at the time the vehicle is actually titled in Ohio.

Since our lender is very trusting, they allowed us to handle all title work (rather than having it done thru the dealer), including the filing of their lien, when the vehicle was eventually titled in the state of Ohio.

We left the dealership with a bill of sale and the Manufacturer's Statement of Origin (similar to a title - shows ownership prior to a vehicle being titled for the first time) and when we arrived at the Summit County title bureau they did want to see a executed lease in order to qualify us as exempt as "Transportation for Hire".

dhalltoyo · Jan 19, 2008

Ahhhh.

That was an important piece of information which would be helpful to others when considering a truck purchase outside of their resident state.

I never have purchased outside of my local business area, because when I shop price, any local dealer has been more than willing to match the price offered by a competing dealer.

Thanks for the additional info.

arrbsthw · Jan 23, 2008

Update for Georgia.. it's all about the money.. Yes you have to pay sales tax unless
title is in individual name. If title is in company or LLC name you are required to pay
sales tax even though you will be leasing to a carrier with full Icc authority. Only if you
have your own common carrier authority and Sales Tax Id do you not have to pay tax.