How are lease assumptions of motor vehicles and other tangible personal property taxed?
A lease assumption is when a lessee has another person assume the lease payments and lease end responsibilities. This should not be done without the lessors’ knowledge or approval. If the lease is/was consummated in Ohio after Feb. 1, 2002, and there are no changes to the original leasing agreement, there is no sales tax due to the State of Ohio. If an Ohio resident assumes an out of state lease, Ohio use tax may be due and payable up front on the remainder of the lease payments. If the other state required the tax to be paid on the monthly installment, Ohio tax is calculated on the remaining payments and paid up front to the leasing company. If the other state collected taxes up front, Ohio tax will be calculated on the payments remaining upon entry into Ohio, credit will be given for taxes paid to the other state and the leasing company will collect any additional tax due.
