As Introduced 1 122nd General Assembly 4 Regular Session S. B. No. 173 5 1997-1998 6 SENATOR B. JOHNSON 8 10 A B I L L To amend sections 5739.01 and 5739.033 of the 12 Revised Code to provide that prepaid 13 authorization numbers used to make telephone calls or prepaid telephone calling cards are 14 subject to the state sales tax at the time of sale. 15 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 16 Section 1. That sections 5739.01 and 5739.033 of the 18 Revised Code be amended to read as follows: 19 Sec. 5739.01. As used in this chapter: 28 (A) "Person" includes individuals, receivers, assignees, 30 trustees in bankruptcy, estates, firms, partnerships, 31 associations, joint-stock companies, joint ventures, clubs, 32 societies, corporations, the state and its political 33 subdivisions, and combinations of individuals of any form. 34 (B) "Sale" and "selling" include all of the following 36 transactions for a consideration in any manner, whether 37 absolutely or conditionally, whether for a price or rental, in 38 money or by exchange, and by any means whatsoever: 39 (1) All transactions by which title or possession, or 41 both, of tangible personal property, is or is to be transferred, 42 or a license to use or consume tangible personal property is or 43 is to be granted; 44 (2) All transactions by which lodging by a hotel is or is 46 to be furnished to transient guests; 47 (3) All transactions by which: 49 2 (a) An item of tangible personal property is or is to be 51 repaired, except property, the purchase of which would be exempt 52 from the tax imposed by section 5739.02 of the Revised Code; 53 (b) An item of tangible personal property is or is to be 55 installed, except property, the purchase of which would be exempt 56 from the tax imposed by section 5739.02 of the Revised Code or 57 property that is or is to be incorporated into and will become a 58 part of a production, transmission, transportation, or 59 distribution system for the delivery of a public utility service; 60 (c) The service of washing, cleaning, waxing, polishing, 62 or painting a motor vehicle is or is to be furnished; 63 (d) Industrial laundry cleaning services are or are to be 65 provided; 66 (e) Automatic data processing, computer services, or 68 electronic information services are or are to be provided for use 69 in business when the true object of the transaction is the 70 receipt by the consumer of automatic data processing, computer 71 services, or electronic information services rather than the 72 receipt of personal or professional services to which automatic 73 data processing, computer services, or electronic information 74 services are incidental or supplemental. Notwithstanding any 75 other provision of this chapter, such transactions that occur 76 between members of an affiliated group are not sales. An 77 affiliated group means two or more persons related in such a way 78 that one person owns or controls the business operation of 79 another member of the group. In the case of corporations with 80 stock, one corporation owns or controls another if it owns more 81 than fifty per cent of the other corporation's common stock with 82 voting rights. 83 (f)TelecommunicationsEXCEPT AS PROVIDED IN DIVISION 86 (B)(8) OF THIS SECTION, TELECOMMUNICATIONS service is provided that originates or terminates in this state and is charged in the 88 records of the telecommunications service vendor to the 89 consumer's telephone number or account in this state, or that 90 3 both originates and terminates in this state; 91 (g) Landscaping and lawn care service is or is to be 93 provided; 94 (h) Private investigation and security service is or is to 96 be provided; 97 (i) Information services or tangible personal property is 99 provided or ordered by means of a nine hundred telephone call; 100 (j) Building maintenance and janitorial service is or is 102 to be provided; 103 (k) Employment service is or is to be provided; 105 (l) Employment placement service is or is to be provided; 107 (m) Exterminating service is or is to be provided; 109 (n) Physical fitness facility service is or is to be 111 provided; 112 (o) Recreation and sports club service is or is to be 114 provided. 115 (4) All transactions by which printed, imprinted, 117 overprinted, lithographic, multilithic, blueprinted, photostatic, 118 or other productions or reproductions of written or graphic 119 matter are or are to be furnished or transferred; 120 (5) The production or fabrication of tangible personal 122 property for a consideration for consumers who furnish either 123 directly or indirectly the materials used in the production of 124 fabrication work; and include the furnishing, preparing, or 125 serving for a consideration of any tangible personal property 126 consumed on the premises of the person furnishing, preparing, or 127 serving such tangible personal property. Except as provided in 128 section 5739.03 of the Revised Code, a construction contract 129 pursuant to which tangible personal property is or is to be 130 incorporated into a structure or improvement on and becoming a 131 part of real property is not a sale of such tangible personal 132 property. The construction contractor is the consumer of such 133 tangible personal property, provided that the sale and 134 installation of carpeting, the sale and installation of 135 4 agricultural land tile, the sale and erection or installation of 136 portable grain bins, or the provision of landscaping and lawn 137 care service and the transfer of property as part of such service 138 is never a construction contract. The transfer of copyrighted 139 motion picture films for exhibition purposes is not a sale, 140 except such films as are used solely for advertising purposes. 141 Other than as provided in this section, "sale" and "selling" do 142 not include professional, insurance, or personal service 143 transactions which involve the transfer of tangible personal 144 property as an inconsequential element, for which no separate 145 charges are made. 146 As used in division (B)(5) of this section: 148 (a) "Agricultural land tile" means fired clay or concrete 150 tile, or flexible or rigid perforated plastic pipe or tubing, 151 incorporated or to be incorporated into a subsurface drainage 152 system appurtenant to land used or to be used directly in 153 production by farming, agriculture, horticulture, or 154 floriculture. The term does not include such materials when they 155 are or are to be incorporated into a drainage system appurtenant 156 to a building or structure even if the building or structure is 157 used or to be used in such production. 158 (b) "Portable grain bin" means a structure that is used or 160 to be used by a person engaged in farming or agriculture to 161 shelter the person's grain and that is designed to be 162 disassembled without significant damage to its component parts. 163 (6) All transactions in which all of the shares of stock 165 of a closely held corporation are transferred, if the corporation 166 is not engaging in business and its entire assets consist of 167 boats, planes, motor vehicles, or other tangible personal 168 property operated primarily for the use and enjoyment of the 169 shareholders; 170 (7) All transactions in which a warranty, maintenance or 172 service contract, or similar agreement by which the vendor of the 173 warranty, contract, or agreement agrees to repair or maintain the 174 5 tangible personal property of the consumer is or is to be 175 provided; 176 (8) ALL TRANSACTIONS BY WHICH A PREPAID AUTHORIZATION 178 NUMBER USED TO MAKE A TELEPHONE CALL OR A PREPAID TELEPHONE 179 CALLING CARD IS OR IS TO BE TRANSFERRED. 180 (C) "Vendor" means the person providing the service or by 182 whom the transfer effected or license given by a sale is or is to 183 be made or given and, for sales described in division (B)(3)(i) 184 of this section, the telecommunications service vendor that 185 provides the nine hundred telephone service; if two or more 186 persons are engaged in business at the same place of business 187 under a single trade name in which all collections on account of 188 sales by each are made, such persons shall constitute a single 189 vendor. 190 Physicians, dentists, hospitals, and veterinarians who are 192 engaged in selling tangible personal property as received from 193 others, such as eyeglasses, mouthwashes, dentifrices, or similar 194 articles, are vendors. Veterinarians who are engaged in 195 transferring to others for a consideration drugs, the dispensing 196 of which does not require an order of a licensed veterinarian or 197 physician under federal law, are vendors. 198 (D)(1) "Consumer" means the person for whom the service is 200 provided, to whom the transfer effected or license given by a 201 sale is or is to be made or given, to whom the service described 202 in division (B)(3)(f) or (i) of this section is charged, or to 203 whom the admission is granted. 204 (2) Physicians, dentists, hospitals, and blood banks 206 operated by nonprofit institutions and persons licensed to 207 practice veterinary medicine, surgery, and dentistry are 208 consumers of all tangible personal property and services 209 purchased by them in connection with the practice of medicine, 210 dentistry, the rendition of hospital or blood bank service, or 211 the practice of veterinary medicine, surgery, and dentistry. In 212 addition to being consumers of drugs administered by them or by 213 6 their assistants according to their direction, veterinarians also 214 are consumers of drugs that under federal law may be dispensed 215 only by or upon the order of a licensed veterinarian or 216 physician, when transferred by them to others for a consideration 217 to provide treatment to animals as directed by the veterinarian. 218 (3) A person who performs a facility management, or 220 similar service contract for a contractee is a consumer of all 221 tangible personal property and services purchased for use in 222 connection with the performance of such contract, regardless of 223 whether title to any such property vests in the contractee. The 224 purchase of such property and services is not subject to the 225 exception for resale under division (E)(1) of this section. 226 (4)(a) In the case of a person who purchases printed 228 matter for the purpose of distributing it or having it 229 distributed to the public or to a designated segment of the 230 public, free of charge, that person is the consumer of that 231 printed matter, and the purchase of that printed matter for that 232 purpose is a sale. (b) In the case of a person who produces, rather than 234 purchases, printed matter for the purpose of distributing it or 235 having it distributed to the public or to a designated segment of 236 the public, free of charge, that person is the consumer of all 237 tangible personal property and services purchased for use or 238 consumption in the production of that printed matter. That 239 person is not entitled to claim exception under division (E)(8) 240 of this section for any material incorporated into the printed matter or any equipment, supplies, or services primarily used to 241 produce the printed matter. 242 (c) The distribution of printed matter to the public or to 245 a designated segment of the public, free of charge, is not a sale 246 to the members of the public to whom the printed matter is 247 distributed or to any persons who purchase space in the printed matter for advertising or other purposes. 248 (5) A person who makes sales of any of the services listed 250 7 in division (B)(3) of this section is the consumer of any 251 tangible personal property used in performing the service. The 252 purchase of that property is not subject to the resale exception 253 under division (E)(1) of this section. 254 (E) "Retail sale" and "sales at retail" include all sales 256 except those in which the purpose of the consumer is: 257 (1) To resell the thing transferred or benefit of the 259 service provided, by a person engaging in business, in the form 260 in which the same is, or is to be, received by the person; 261 (2) To incorporate the thing transferred as a material or 263 a part, into tangible personal property to be produced for sale 264 by manufacturing, assembling, processing, or refining, or to use 265 or consume the thing transferred directly in producing a product 266 for sale by mining, including without limitation the extraction 268 from the earth of all substances which are classed geologically 269 as minerals, production of crude oil and natural gas, farming, 270 agriculture, horticulture, or floriculture, and persons engaged 271 in rendering farming, agricultural, horticultural, or 272 floricultural services, and services in the exploration for, and 273 production of, crude oil and natural gas, for others are deemed 274 engaged directly in farming, agriculture, horticulture, and 275 floriculture, or exploration for, and production of, crude oil 276 and natural gas; directly in the rendition of a public utility 277 service, except that the sales tax levied by section 5739.02 of 278 the Revised Code shall be collected upon all meals, drinks, and 279 food for human consumption sold upon Pullman and railroad 280 coaches. This paragraph does not exempt or except from "retail 281 sale" or "sales at retail" the sale of tangible personal property 282 that is to be incorporated into a structure or improvement to 283 real property. (3) To hold the thing transferred as security for the 285 performance of an obligation of the vendor; 286 (4) To use or consume the thing transferred in the process 288 of reclamation as required by Chapters 1513. and 1514. of the 289 8 Revised Code; 290 (5) To resell, hold, use, or consume the thing transferred 292 as evidence of a contract of insurance; 293 (6) To use or consume the thing directly in commercial 295 fishing; 296 (7) To incorporate the thing transferred as a material or 298 a part into, or to use or consume the thing transferred directly 299 in the production of, magazines distributed as controlled 300 circulation publications; 301 (8) To use or consume the thing transferred in the 303 production and preparation in suitable condition for market and 304 sale of printed, imprinted, overprinted, lithographic, 305 multilithic, blueprinted, photostatic, or other productions or 306 reproductions of written or graphic matter; 307 (9) To use the thing transferred, as described in section 309 5739.011 of the Revised Code, primarily in a manufacturing 310 operation to produce tangible personal property for sale; 311 (10) To use the benefit of a warranty, maintenance or 313 service contract, or similar agreement, as defined in division 314 (B)(7) of this section, to repair or maintain tangible personal 315 property, if all of the property that is the subject of the 316 warranty, contract, or agreement would be exempt on its purchase 317 from the tax imposed by section 5739.02 of the Revised Code; 318 (11) To use the thing transferred as qualified research 320 and development equipment; 321 (12) To use or consume the thing transferred primarily in 323 storing, transporting, mailing, or otherwise handling purchased 324 sales inventory in a warehouse, distribution center, or similar 325 facility when the inventory is primarily distributed outside this 326 state to retail stores of the person who owns or controls the 327 warehouse, distribution center, or similar facility, to retail 328 stores of an affiliated group of which that person is a member, 329 or by means of direct marketing. Division (E)(12) of this 330 section does not apply to motor vehicles registered for operation 331 9 on the public highways. As used in division (E)(12) of this 332 section, "affiliated group" has the same meaning as in division 333 (B)(3)(e) of this section and "direct marketing" has the same 334 meaning as in division (B)(37) of section 5739.02 of the Revised 335 Code. 336 (13) To use or consume the thing transferred to fulfill a 338 contractual obligation incurred by a warrantor pursuant to a 339 warranty provided as a part of the price of the tangible personal 340 property sold or by a vendor of a warranty, maintenance or 341 service contract, or similar agreement the provision of which is 342 defined as a sale under division (B)(7) of this section; 343 (14) To use or consume the thing transferred in the 345 production of a newspaper for distribution to the public; 346 (15) To use tangible personal property to perform a 348 service listed in division (B)(3) of this section, if the 349 property is or is to be permanently transferred to the consumer 350 of the service as an integral part of the performance of the 351 service. DIVISION (E)(15) OF THIS SECTION DOES NOT APPLY TO A 352 PREPAID AUTHORIZATION NUMBER USED TO MAKE A TELEPHONE CALL OR A 353 PREPAID TELEPHONE CALLING CARD. As used in division (E) of this section, "thing" includes 355 all transactions included in divisions (B)(3)(a), (b), and (e) of 357 this section. Sales conducted through a coin-operated device that 359 activates vacuum equipment or equipment that dispenses water, 360 whether or not in combination with soap or other cleaning agents 361 or wax, to the consumer for the consumer's use on the premises in 363 washing, cleaning, or waxing a motor vehicle, provided no other personal property or personal service is provided as part of the 364 transaction, are not retail sales or sales at retail. 365 (F) "Business" includes any activity engaged in by any 367 person with the object of gain, benefit, or advantage, either 368 direct or indirect. "Business" does not include the activity of 369 a person in managing and investing the person's own funds. 370 10 (G) "Engaging in business" means commencing, conducting, 372 or continuing in business, and liquidating a business when the 373 liquidator thereof holds self out to the public as conducting 375 such business. Making a casual sale is not engaging in business. (H)(1) "Price," except as provided in divisions (H)(2) and 377 (3) of this section, means the aggregate value in money of 378 anything paid or delivered, or promised to be paid or delivered, 379 in the complete performance of a retail sale, without any 380 deduction on account of the cost of the property sold, cost of 381 materials used, labor or service cost, interest, discount paid or 382 allowed after the sale is consummated, or any other expense. If 383 the retail sale consists of the rental or lease of tangible 384 personal property, "price" means the aggregate value in money of 385 anything paid or delivered, or promised to be paid or delivered, 386 in the complete performance of the rental or lease, without any 387 deduction for tax, interest, labor or service charge, damage 388 liability waiver, termination or damage charge, discount paid or 389 allowed after the lease is consummated, or any other expense. The 391 sales tax shall be calculated and collected by the lessor on each 392 payment made by the lessee. Price does not include the consideration received as a deposit refundable to the consumer 393 upon return of a beverage container, the consideration received 394 as a deposit on a carton or case that is used for such returnable 395 containers, or the consideration received as a refundable 396 security deposit for the use of tangible personal property to the 397 extent that it actually is refunded, if the consideration for 398 such refundable deposit is separately stated from the 399 consideration received or to be received for the tangible 400 personal property transferred in the retail sale. Such 401 separation must appear in the sales agreement or on the initial 402 invoice or initial billing rendered by the vendor to the 403 consumer. Price is the amount received inclusive of the tax, 404 provided the vendor establishes to the satisfaction of the tax 405 commissioner that the tax was added to the price. When the price 406 11 includes both a charge for tangible personal property and a 407 charge for providing a service and the sale of the property and 408 the charge for the service are separately taxable, or have a 409 separately determinable tax status, the price shall be separately 410 stated for each such charge so the tax can be correctly computed 411 and charged. 412 The tax collected by the vendor from the consumer under 414 this chapter is not part of the price, but is a tax collection 415 for the benefit of the state and of counties levying an 416 additional sales tax pursuant to section 5739.021 or 5739.026 of 417 the Revised Code and of transit authorities levying an additional 418 sales tax pursuant to section 5739.023 of the Revised Code. 419 Except for the discount authorized in section 5739.12 of the 420 Revised Code, no person other than the state or such a county or 421 transit authority shall derive any benefit from the collection or 422 payment of such tax. 423 (2) In the case of a sale of any new motor vehicle by a 425 new motor vehicle dealer, as defined in section 4517.01 of the 426 Revised Code, in which another motor vehicle is accepted by the 427 dealer as part of the consideration received, "price" has the 428 same meaning as in division (H)(1) of this section, reduced by 429 the credit afforded the consumer by the dealer for the motor 430 vehicle received in trade. 431 (3) In the case of a sale of any watercraft or outboard 433 motor by a watercraft dealer licensed in accordance with section 434 1547.543 of the Revised Code, in which another watercraft, 435 watercraft and trailer, or outboard motor is accepted by the 436 dealer as part of the consideration received, "price" has the 437 same meaning as in division (H)(1) of this section, reduced by 438 the credit afforded the consumer by the dealer for the 439 watercraft, watercraft and trailer, or outboard motor received in 440 trade. As used in division (H)(3) of this section, "watercraft" 441 includes an outdrive unit attached to the watercraft. 442 (I) "Receipts" means the total amount of the prices of the 444 12 sales of vendors, provided that cash discounts allowed and taken 445 on sales at the time they are consummated are not included, minus 446 any amount deducted as a bad debt pursuant to section 5739.121 of 447 the Revised Code. "Receipts" does not include the sale price of 448 property returned or services rejected by consumers when the full 449 sale price and tax are refunded either in cash or by credit. 450 (J) "Place of business" means any location at which a 452 person engages in business. 453 (K) "Premises" includes any real property or portion 455 thereof upon which any person engages in selling tangible 456 personal property at retail or making retail sales and also 457 includes any real property or portion thereof designated for, or 458 devoted to, use in conjunction with the business engaged in by 459 such person. 460 (L) "Casual sale" means a sale of an item of tangible 462 personal property which was obtained by the person making the 463 sale, through purchase or otherwise, for the person's own use in 464 this state and which was previously subject to the state's taxing 465 jurisdiction on its sale or use, and includes such items acquired 466 for the seller's use which are sold by an auctioneer employed 467 directly by the person for such purpose, provided the location of 468 such sales is not the auctioneer's permanent place of business. 469 As used in this division, "permanent place of business" includes 470 any location where such auctioneer has conducted more than two 471 auctions during the year. 472 (M) "Hotel" means every establishment kept, used, 474 maintained, advertised or held out to the public to be a place 475 where sleeping accommodations are offered to guests, in which 476 five or more rooms are used for the accommodation of such guests, 477 whether such rooms are in one or several structures. 478 (N) "Transient guests" means persons occupying a room or 480 rooms for sleeping accommodations for less than thirty 481 consecutive days. 482 (O) "Making retail sales" means the effecting of 484 13 transactions wherein one party is obligated to pay the price and 485 the other party is obligated to provide a service or to transfer 486 title to or possession of the item sold. "Making retail sales" 487 does not include the preliminary acts of promoting or soliciting 488 the retail sales, other than the distribution of printed matter 489 which displays or describes and prices the item offered for sale, 490 nor does it include delivery of a predetermined quantity of 491 tangible personal property or transportation of property or 492 personnel to or from a place where a service is performed, 493 regardless of whether the vendor is a delivery vendor. 494 (P) "Used directly in the rendition of a public utility 496 service" means that property which is to be incorporated into and 497 will become a part of the consumer's production, transmission, 498 transportation, or distribution system and which retains its 499 classification as tangible personal property after such 500 incorporation; fuel or power used in the production, 501 transmission, transportation, or distribution system; and 502 tangible personal property used in the repair and maintenance of 503 the production, transmission, transportation, or distribution 504 system, including only such motor vehicles as are specially 505 designed and equipped for such use. Tangible personal property 506 and services used primarily in providing highway transportation 507 for hire are not used in providing a public utility service as 508 defined in this division. 509 (Q) "Refining" means removing or separating a desirable 511 product from raw or contaminated materials by distillation or 512 physical, mechanical, or chemical processes. 513 (R) "Assembly" and "assembling" mean attaching or fitting 515 together parts to form a product, but do not include packaging a 516 product. 517 (S) "Manufacturing operation" means a process in which 519 materials are changed, converted, or transformed into a different 520 state or form from which they previously existed and includes 521 refining materials, assembling parts, and preparing raw materials 522 14 and parts by mixing, measuring, blending, or otherwise committing 523 such materials or parts to the manufacturing process. 524 "Manufacturing operation" does not include packaging. 525 (T) "Fiscal officer" means, with respect to a regional 527 transit authority, the secretary-treasurer thereof, and with 528 respect to a county which is a transit authority, the fiscal 529 officer of the county transit board if one is appointed pursuant 530 to section 306.03 of the Revised Code or the county auditor if 531 the board of county commissioners operates the county transit 532 system. (U) "Transit authority" means a regional transit authority 534 created pursuant to section 306.31 of the Revised Code or a 535 county in which a county transit system is created pursuant to 536 section 306.01 of the Revised Code. For the purposes of this 537 chapter, a transit authority must extend to at least the entire 538 area of a single county. A transit authority which includes 539 territory in more than one county must include all the area of 540 the most populous county which is a part of such transit 541 authority. County population shall be measured by the most 542 recent census taken by the United States census bureau. 543 (V) "Legislative authority" means, with respect to a 545 regional transit authority, the board of trustees thereof, and 546 with respect to a county which is a transit authority, the board 547 of county commissioners. 548 (W) "Territory of the transit authority" means all of the 550 area included within the territorial boundaries of a transit 551 authority as they from time to time exist. Such territorial 552 boundaries must at all times include all the area of a single 553 county or all the area of the most populous county which is a 554 part of such transit authority. County population shall be 555 measured by the most recent census taken by the United States 556 census bureau. 557 (X) "Providing a service" means providing or furnishing 559 anything described in division (B)(3) of this section for 560 15 consideration. 561 (Y)(1)(a) "Automatic data processing" means processing of 563 others' data, including keypunching or similar data entry 564 services together with verification thereof, or providing access 565 to computer equipment for the purpose of processing data. 566 (b) "Computer services" means providing services 568 consisting of specifying computer hardware configurations and 569 evaluating technical processing characteristics, computer 570 programming, and training of computer programmers and operators, 571 provided in conjunction with and to support the sale, lease, or 572 operation of taxable computer equipment or systems. 573 (c) "Electronic information services" means providing 575 access to computer equipment by means of telecommunications 576 equipment for the purpose of either of the following: 577 (i) Examining or acquiring data stored in or accessible to 579 the computer equipment; 580 (ii) Placing data into the computer equipment to be 582 retrieved by designated recipients with access to the computer 583 equipment. 584 (d) "Automatic data processing, computer services, or 586 electronic information services" shall not include personal or 587 professional services. 588 (2) As used in divisions (B)(3)(e) and (Y)(1) of this 590 section, "personal and professional services" means all services 591 other than automatic data processing, computer services, or 592 electronic information services, including but not limited to: 593 (a) Accounting and legal services such as advice on tax 595 matters, asset management, budgetary matters, quality control, 596 information security, and auditing and any other situation where 597 the service provider receives data or information and studies, 598 alters, analyzes, interprets, or adjusts such material; 599 (b) Analyzing business policies and procedures; 601 (c) Identifying management information needs; 603 (d) Feasibility studies including economic and technical 605 16 analysis of existing or potential computer hardware or software 606 needs and alternatives; 607 (e) Designing policies, procedures, and custom software 609 for collecting business information, and determining how data 610 should be summarized, sequenced, formatted, processed, controlled 611 and reported so that it will be meaningful to management; 612 (f) Developing policies and procedures that document how 614 business events and transactions are to be authorized, executed, 615 and controlled; 616 (g) Testing of business procedures; 618 (h) Training personnel in business procedure applications; 620 (i) Providing credit information to users of such 622 information by a consumer reporting agency, as defined in the 623 "Fair Credit Reporting Act," 84 Stat. 1114, 1129 (1970), 15 624 U.S.C. 1681a(f), or as hereafter amended, including but not 625 limited to gathering, organizing, analyzing, recording, and 626 furnishing such information by any oral, written, graphic, or 627 electronic medium; 628 (j) Providing debt collection services by any oral, 630 written, graphic, or electronic means. 631 The services listed in divisions (Y)(2)(a) to (j) of this 633 section are not automatic data processing or computer services. 634 (Z) "Highway transportation for hire" means the 636 transportation of personal property belonging to others for 637 consideration by any of the following: 638 (1) The holder of a permit or certificate issued by this 640 state or the United States authorizing the holder to engage in 641 transportation of personal property belonging to others for 642 consideration over or on highways, roadways, streets, or any 643 similar public thoroughfare; 644 (2) A person who engages in the transportation of personal 646 property belonging to others for consideration over or on 647 highways, roadways, streets, or any similar public thoroughfare 648 but who could not have engaged in such transportation on December 649 17 11, 1985, unless the person was the holder of a permit or 650 certificate of the types described in division (Z)(1) of this 651 section; (3) A person who leases a motor vehicle to and operates it 653 for a person described by division (Z)(1) or (2) of this section. 654 (AA) "Telecommunications service" means the transmission 656 of any interactive, two-way electromagnetic communications, 657 including voice, image, data, and information, through the use of 658 any medium such as wires, cables, microwaves, cellular radio, 659 radio waves, light waves, or any combination of those or similar 660 media. "Telecommunications service" includes message toll 661 service even though the vendor provides the message toll service 662 by means of wide area transmission type service or private 663 communications service purchased from another telecommunications 664 service provider, but does not include any of the following: 665 (1) Sales of incoming or outgoing wide area transmission 667 service or wide area transmission type service, including eight 668 hundred or eight-hundred-type service, to the person contracting 669 for the receipt of that service; 670 (2) Sales of private communications service to the person 672 contracting for the receipt of that service that entitles the 673 purchaser to exclusive or priority use of a communications 674 channel or group of channels between exchanges; 675 (3) Sales of telecommunications service by companies 677 subject to the excise tax imposed by Chapter 5727. of the Revised 678 Code; 679 (4) Sales of telecommunications service to a provider of 681 telecommunications service, including access services, for use in 682 providing telecommunications service; 683 (5) Value-added nonvoice services in which computer 685 processing applications are used to act on the form, content, 686 code, or protocol of the information to be transmitted; 687 (6) Transmission of interactive video programming by a 689 cable television system as defined in section 505.90 of the 690 18 Revised Code. 691 (BB) "Industrial laundry cleaning services" means removing 693 soil or dirt from or supplying towels, linens, or articles of 694 clothing that belong to others and are used in a trade or 695 business. 696 (CC) "Magazines distributed as controlled circulation 698 publications" means magazines containing at least twenty-four 699 pages, at least twenty-five per cent editorial content, issued at 700 regular intervals four or more times a year, and circulated 701 without charge to the recipient, provided that such magazines are 702 not owned or controlled by individuals or business concerns which 703 conduct such publications as an auxiliary to, and essentially for 704 the advancement of the main business or calling of, those who own 705 or control them. 706 (DD) "Landscaping and lawn care service" means the 708 services of planting, seeding, sodding, removing, cutting, 709 trimming, pruning, mulching, aerating, applying chemicals, 710 watering, fertilizing, and providing similar services to 711 establish, promote, or control the growth of trees, shrubs, 712 flowers, grass, ground cover, and other flora, or otherwise 713 maintaining a lawn or landscape grown or maintained by the owner 714 for ornamentation or other nonagricultural purpose. However, 715 "landscaping and lawn care service" does not include the 716 providing of such services by a person who has less than five 717 thousand dollars in sales of such services during the calendar 718 year. 719 (EE) "Private investigation and security service" means 721 the performance of any activity for which the provider of such 722 service is required to be licensed pursuant to Chapter 4749. of 723 the Revised Code, or would be required to be so licensed in 724 performing such services in this state, and also includes the 725 services of conducting polygraph examinations and of monitoring 726 or overseeing the activities on or in, or the condition of, the 727 consumer's home, business, or other facility by means of 728 19 electronic or similar monitoring devices. "Private investigation 729 and security service" does not include special duty services 730 provided by off-duty police officers, deputy sheriffs, and other 731 peace officers regularly employed by the state or a political 732 subdivision. 733 (FF) "Information services" means providing conversation, 735 giving consultation or advice, playing or making a voice or other 736 recording, making or keeping a record of the number of callers, 737 and any other service provided to a consumer by means of a nine 738 hundred telephone call, except when the nine hundred telephone 739 call is the means by which the consumer makes a contribution to a 740 recognized charity. 741 (GG) "Research and development" means designing, creating, 743 or formulating new or enhanced products, equipment, or 744 manufacturing processes, and conducting scientific or 745 technological inquiry and experimentation in the physical 746 sciences with the goal of increasing scientific knowledge which 747 may reveal the bases for new or enhanced products, equipment, or 748 manufacturing processes. 749 (HH) "Qualified research and development equipment" means 751 capitalized tangible personal property, and leased personal 752 property that would be capitalized if purchased, used by a person 753 primarily to perform research and development. Tangible personal 754 property primarily used in testing, as defined in division (A)(4) 755 of section 5739.011 of the Revised Code, or used for recording or 756 storing test results, is not qualified research and development 757 equipment unless such property is primarily used by the consumer 758 in testing the product, equipment, or manufacturing process being 759 created, designed, or formulated by the consumer in the research 760 and development activity or in recording or storing such test 761 results. 762 (II) "Building maintenance and janitorial service" means 764 cleaning the interior or exterior of a building and any tangible 765 personal property located therein or thereon, including any 766 20 services incidental to such cleaning for which no separate charge 767 is made. However, "building maintenance and janitorial service" 768 does not include the providing of such service by a person who 769 has less than five thousand dollars in sales of such service 770 during the calendar year. 771 (JJ) "Employment service" means providing or supplying 773 personnel, on a temporary or long-term basis, to perform work or 774 labor under the supervision or control of another, when the 775 personnel so supplied receive their wages, salary, or other 776 compensation from the provider of the service. "Employment 777 service" does not include: 778 (1) Acting as a contractor or subcontractor, where the 780 personnel performing the work are not under the direct control of 781 the purchaser. 782 (2) Medical and health care services. 784 (3) Supplying personnel to a purchaser pursuant to a 786 contract of at least one year between the service provider and 787 the purchaser that specifies that each employee covered under the 788 contract is assigned to the purchaser on a permanent basis. 789 (4) Transactions between members of an affiliated group, 791 as defined in division (B)(3)(e) of this section. 792 (KK) "Employment placement service" means locating or 794 finding employment for a person or finding or locating an 795 employee to fill an available position. 796 (LL) "Exterminating service" means eradicating or 798 attempting to eradicate vermin infestations from a building or 799 structure, or the area surrounding a building or structure, and 800 includes activities to inspect, detect, or prevent vermin 801 infestation of a building or structure. 802 (MM) "Physical fitness facility service" means all 804 transactions by which a membership is granted, maintained, or 805 renewed, including initiation fees, membership dues, renewal 806 fees, monthly minimum fees, and other similar fees and dues, by a 807 physical fitness facility such as an athletic club, health spa, 808 21 or gymnasium, which entitles the member to use the facility for 809 physical exercise. 810 (NN) "Recreation and sports club service" means all 812 transactions by which a membership is granted, maintained, or 813 renewed, including initiation fees, membership dues, renewal 814 fees, monthly minimum fees, and other similar fees and dues, by a 815 recreation and sports club, which entitles the member to use the 816 facilities of the organization. "Recreation and sports club" 817 means an organization that has ownership of, or controls or 818 leases on a continuing, long-term basis, the facilities used by 819 its members and includes an aviation club, gun or shooting club, 820 yacht club, card club, swimming club, tennis club, golf club, 821 country club, riding club, amateur sports club, or similar 822 organization. 823 (OO) "Livestock" means farm animals commonly raised for 825 food or food production, and includes but is not limited to 826 cattle, sheep, goats, swine, and poultry. "Livestock" does not 827 include invertebrates, fish, amphibians, reptiles, horses, 828 domestic pets, animals for use in laboratories or for exhibition, 829 or other animals not commonly raised for food or food production. 830 (PP) "Livestock structure" means a building or structure 832 used exclusively for the housing, raising, feeding, or sheltering 833 of livestock, and includes feed storage or handling structures 834 and structures for livestock waste handling. 835 (QQ) "Horticulture" means the growing, cultivation, and 837 production of flowers, fruits, herbs, vegetables, sod, mushrooms, 838 and nursery stock. As used in this division, "nursery stock" has 839 the same meaning as in section 927.51 of the Revised Code. 840 (RR) "Horticulture structure" means a building or 842 structure used exclusively for the commercial growing, raising, 843 or overwintering of horticultural products, and includes the area 844 used for stocking, storing, and packing horticultural products 845 when done in conjunction with the production of those products. 846 (SS) "Newspaper" means an unbound publication bearing a 848 22 title or name that is regularly published, at least as frequently 849 as biweekly, and distributed from a fixed place of business to 850 the public in a specific geographic area, and that contains a 851 substantial amount of news matter of international, national, or 852 local events of interest to the general public. (TT) "Professional racing team" means a person that 855 employs at least twenty full-time employees for the purpose of 856 conducting a motor vehicle racing business for profit. The 857 person must conduct the business with the purpose of racing one 858 or more motor racing vehicles in at least ten competitive 859 professional racing events each year that comprise all or part of 860 a motor racing series sanctioned by one or more motor racing 861 sanctioning organizations. A "motor racing vehicle" means a 862 vehicle for which the chassis, engine, and parts are designed 863 exclusively for motor racing, and does not include a stock or 865 production model vehicle that may be modified for use in racing. 866 For the purposes of this division: (1) A "competitive professional racing event" is a motor 868 vehicle racing event sanctioned by one or more motor racing 869 sanctioning organizations, at which aggregate cash prizes in 870 excess of eight hundred thousand dollars are awarded to the 872 competitors. (2) "Full-time employee" means an individual who is 874 employed for consideration for thirty-five or more hours a week, 875 or who renders any other standard of service generally accepted 876 by custom or specified by contract as full-time employment. 878 Sec. 5739.033. The amount of tax due pursuant to sections 887 5739.02, 5739.021, 5739.023, and 5739.026 of the Revised Code is 888 the sum of the taxes imposed pursuant to those sections at the 889 situs of the consummation of the sale as determined under this 890 section. 891 (A) Except as otherwise provided in this section and 893 division (C) of section 5739.031 of the Revised Code, all sales 894 are conclusively determined to be consummated at the vendor's 895 23 place of business. 896 (1) If the consumer or the consumer's agent takes 898 possession of the tangible personal property at a place of 899 business of the vendor where the purchase contract or agreement 900 was made, the sale is consummated at that place of business. 901 (2) If the consumer or the consumer's agent takes 903 possession of the tangible personal property other than at a 904 place of business of the vendor, or takes possession at a 905 warehouse or similar facility of the vendor, the sale is 906 consummated at the vendor's place of business where the purchase 907 contract or agreement was made or the purchase order was 908 received. (3) If the vendor provides a service specified in division 910 (B)(3)(a), (b), (c), (d), (n), or (o) of section 5739.01 of the 912 Revised Code, the sale is consummated at the vendor's place of 913 business where the service is performed or the contract or 914 agreement for the service was made or the purchase order was 915 received. (B) If the vendor is a transient vendor as specified in 917 division (B) of section 5739.17 of the Revised Code, the sale is 918 conclusively determined to be consummated at the vendor's 919 temporary place of business or, if the transient vendor is the 920 lessor of titled motor vehicles, titled watercraft, or titled 921 outboard motors, at the location where the lessee keeps the 922 leased property. 923 (C) If the vendor is a limited vendor as specified in 925 division (B) of section 5739.17 of the Revised Code, the sale is 926 conclusively determined to be consummated at the temporary event 927 at which the vendor is making sales. 928 (D) If the vendor makes sales of tangible personal 930 property from a stock of goods carried in a motor vehicle, from 931 which the purchaser makes selection and takes possession, or from 932 which the vendor sells tangible personal property the quantity of 933 which has not been determined prior to the time the purchaser 934 24 takes possession, the sale is conclusively determined to be 935 consummated at the location of the motor vehicle when the sale is 936 made. 937 (E) If the vendor is a delivery vendor as specified in 939 division (D) of section 5739.17 of the Revised Code, the sale is 940 conclusively determined to be consummated at the place where the 941 tangible personal property is delivered, where the leased 942 property is used, or where the service is performed or received. 943 (F) If the vendor provides a service specified in division 945 (B)(3)(e), (g), (h), (j), (k), (l), or (m) of section 5739.01 of 947 the Revised Code, the sale is conclusively determined to be 948 consummated at the location of the consumer where the service is 949 performed or received. 950 (G)IfEXCEPT AS PROVIDED IN DIVISION (J) OF THIS SECTION, 952 IF the vendor provides a service specified in division (B)(3)(f) 954 or (i) of section 5739.01 of the Revised Code, the sale is 955 conclusively determined to be consummated at the location of the 956 telephone number or account as reflected in the records of the 957 vendor. If, in the case of a telecommunications service, the telephone number or account is located outside this state, the 958 sale is conclusively determined to be consummated at the location 959 in this state from which the service originated. 960 (H) If the vendor provides lodging to transient guests as 962 specified in division (B)(2) of section 5739.01 of the Revised 963 Code, the sale is conclusively determined to be consummated at 964 the location where the lodging is located. 965 (I) If the vendor sells a warranty, maintenance or service 967 contract, or similar agreement as specified in division (B)(7) of 968 section 5739.01 of the Revised Code and the vendor is a delivery 969 vendor, the sale is conclusively determined to be consummated at 970 the location of the consumer. If the vendor is not a delivery 971 vendor, the sale is conclusively determined to be consummated at 972 the vendor's place of business where the contract or agreement 973 was made, unless the warranty or contract is a component of the 974 25 sale of a titled motor vehicle, titled watercraft, or titled 975 outboard motor, in which case the sale is conclusively determined 976 to be consummated in the county of titling. 977 (J) IF THE VENDOR SELLS A PREPAID AUTHORIZATION NUMBER 979 USED TO MAKE A TELEPHONE CALL OR A PREPAID TELEPHONE CALLING 980 CARD, THE SALE IS CONCLUSIVELY DETERMINED TO BE CONSUMMATED AT 981 THE VENDOR'S PLACE OF BUSINESS AND SHALL BE TAXED AT THE TIME OF 982 SALE. Section 2. That existing sections 5739.01 and 5739.033 of 984 the Revised Code are hereby repealed. 985