Full question:
When transferring trucks from two sole proprietorships to a corporation, will there be sales tax to pay by the corporation? If there is, is there a way to avoid it since it was already paid once by the owners. The owners of the sole proprietorships would be the owners of the corporation.
- Category: Taxes
- Date:
- State: Ohio
Answer:
Sales tax is a "trust" tax that is to be collected by all retailers and certain service providers when they make taxable retail sales. Ohio statutes define retail sales as"the effecting of transactions wherein one party is obligated to pay the price and the other party is obligated to provide a service or to transfer title to or possession of the item sold. “Making retail sales” does not include the preliminary acts of promoting or soliciting the retail sales, other than the distribution of printed matter which displays or describes and prices the item offered for sale, nor does it include delivery of a predetermined quantity of tangible personal property or transportation of property or personnel to or from a place where a service is performed, regardless of whether the vendor is a delivery vendor."
Sales tax generally applies to retail sales. There are exemptions for certain cases, such as vehicles to be titled in most other states or used primarily in providing highway transportation
for hire. Sales tax may not be due to a mere change in titled owner without payment of consideration, or a gift to a non-profit organization. The answer will depend on all the circumstances and facts involved. I am prohibited from giving a legal opinion, this service provides information of a general nature. I suggest contacting the tax department at the link below or a local attorney who can review all the facts and documents involved.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
