COLUMBUS—State Representatives Steve Hambley (R-Brunswick) and Tom Brinkman (R-Mt. Lookout) have introduced legislation, House Bill 216, that would offer a tax credit to individuals who trade in a used motor vehicle to purchase another used motor vehicle.


Currently, 33 states, including all of Ohio’s neighboring states, offer trade-in sales tax credits for both new and used vehicles. Ohio only offers a tax credit for motor vehicles traded in for new vehicles, putting Ohio consumers and auto dealerships at a competitive disadvantage. 


“House Bill 216 incentivizes consumers to trade in vehicles to dealers when purchasing, which ensures higher quality and newer, safer vehicles on the road, as well as accurate enforcement of the tax code,” said Hambley. “In addition to the monetary value, this is a pro-consumer tax credit. It recognizes that consumers have already paid tax on the trade-in vehicle, which will get taxed again when resold by the dealer.”


For a consumer residing in Medina County with a sales tax rate of 6.75% who purchases a used vehicle for $20,000 and trades in a vehicle valued at $10,000, the sales tax owed at the time of purchase would be $1,350. If House Bill 216 is enacted, that amount would only be $675.


“Those kinds of consumer savings could especially help the working poor qualify for financing or get into a more comfortable monthly payment on a good used vehicle,” added Hambley.


House Bill 216 was introduced with bipartisan support, garnering 20 cosponsors from both caucuses. It now awaits a committee designation.

 
 
 
  
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