Motor vehicle towing service is defined as the towing or conveyance of a vehicle that is wrecked, disabled, or illegally parked. This service is subject to specific regulations and taxes. Below is essential information regarding these aspects for towing service providers.
Licensing Requirements for Towing Service Providers
If you operate a towing service in Ohio, it is mandatory to obtain a vendor’s license for each fixed business location. These licenses can be acquired from the county auditor in the county where your business is situated. You can find the application form, ST 1 or ST 1T, on the Ohio Department of Taxation’s website under the “Tax Forms” section.
For towing service providers based outside of Ohio but operating within the state, a seller’s use registration from the Ohio Department of Taxation is necessary. The application for this registration is also available on the Department of Taxation’s website.
What Charges Are Taxable Under Towing Services?
When providing motor vehicle towing services, certain charges are considered part of the taxable price if they are integral and essential to the service. Examples of taxable charges include:
- Costs associated with clearing snow around a vehicle before towing commences.
- Trip charges, whenever a taxable towing service is performed.
- Hook-up fees.
- Hourly rates, when applied to taxable towing services.
- Charges for disconnecting the drivetrain before towing.
- Dolly usage fees.
- Charges for uprighting overturned vehicles.
Transportation of New Vehicles: Taxable?
Transporting new motor vehicles to dealerships is not considered a taxable service. This activity is classified as a transportation charge because the vehicles are not in a “wrecked, disabled, or illegally parked” condition.
Vehicle Repossession and Towing: Tax Implications
Repossessing vehicles for finance companies is not categorized as a taxable towing service, even if towing becomes necessary during the repossession. The primary service provided is repossession, not towing. Furthermore, the vehicle being repossessed may not necessarily be “wrecked, disabled, or illegally parked.” This principle extends to scenarios where a finance company hires a third party for repossession, and that third party then contracts a tow operator. Unless the vehicle is wrecked, disabled, or illegally parked, such a tow is typically not taxable.
Towing Services Across State Lines: Ohio and Indiana
Towing a motor vehicle from Indiana into Ohio is not taxable in Ohio. The location where the towing service originates determines taxability. Ohio tax is not required for towing services starting outside of Ohio. Conversely, towing services that begin in Ohio and conclude in another state are taxable in Ohio.
“Pulling a Vehicle Out of a Ditch”: Is It Taxable?
Yes, pulling a vehicle out of a ditch is considered a taxable service. A vehicle stuck in a ditch is deemed at least temporarily disabled, fitting the criteria for a taxable motor vehicle towing service.
Municipal Towing Charges: Taxable?
Charges for towing motor vehicles paid by a vehicle owner to a municipality are not subject to tax. Ohio Revised Code (R.C.) 5739.02(B)(22) provides an exemption for services sold by the State of Ohio or any of its political subdivisions.
Commercial Driver’s License and Further Requirements
Depending on the size of the vehicle you operate and the weight you tow, a commercial driver’s license (CDL) may be required. For detailed information, contact the Ohio Bureau of Motor Vehicles at (614) 752-7500 or visit bmv.ohio.gov. Additionally, registration with the Public Utilities Commission of Ohio’s (PUCO) Motor Carrier Division might be necessary. Contact PUCO at (800) 686-7826 or visit www.puco.ohio.gov for information and registration forms.
Alt text: Close-up of a tow truck operator connecting a hook to a vehicle’s undercarriage in a towing service operation.
For towing oversize loads, a special hauling permit from the Ohio Department of Transportation (ODOT) might be needed. Contact ODOT’s main office at (614) 466-7170 or your local ODOT District Office for more details. Permit and fee information is also accessible at transportation.ohio.gov.
Alt text: A bright yellow tow truck providing roadside assistance by towing a passenger vehicle on a highway, illustrating typical towing services.
This information aims to clarify the regulations and tax implications for towing services in Ohio, ensuring providers operate within legal and compliance frameworks.
