01/28/02 - Ohio Changes How Sales and Use Tax is Applied to Certain Leases - The SALT Group®

State and Local Tax Services - Accounts Payable Review, State Audit Representation



		For Immediate Release January 28, 2002 OHIO CHANGES HOW SALES AND USE TAX IS APPLIED TO CERTAIN LEASES OF TANGIBLE PERSONAL PROPERTY The State of Ohio has recently made significant changes to the way sales and use tax is applied to leases of motor vehicles, watercraft, outboard motors, aircraft, and tangible personal property used for business purposes. Effective February 1, 2002, Amended House Bill 405 changed how the tax will be collected on these types of leases to collection of the tax at the beginning of the lease rather than on the monthly lease payments. An exception to this change applies to motor vehicles designed to carry a load of more than one ton. Tangible personal property used primarily for business purposes includes, but is not limited to, computers, computer peripherals, canned software, furniture, machinery, plants, wall hangings, communication equipment, and any other personal property used by a business. Leases to which this change applies are for a fixed period of time that is greater than 28 days and affects only leases entered into after February 1, 2002. Existing sales and use tax exemptions and exceptions applicable to leased property after February 1, 2002 will still apply. Tax is to be collected on the total amount to be paid by the lessee under the lease agreement at the time the lease is consummated. If you would like additional information or have any questions, please contact J. Lynne Fontana, Regional Vice President - Sales & Use Tax Group at (281) 578-3700. E-mail lfontana@thesaltgroup.com Back to Main News Page



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