As Reported by the Senate Ways and Means Committee 1 122nd General Assembly 4 Regular Session Am. S. B. No. 173 5 1997-1998 6 SENATORS B. JOHNSON-NEIN 8 10 A B I L L To amend sections 5739.01 and 5739.033 of the 12 Revised Code to provide that, on and after 13 January 1, 2000, prepaid authorization numbers 14 used to make telephone calls or prepaid telephone 15 calling cards are subject to the state sales tax at the time of sale. 16 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 17 Section 1. That sections 5739.01 and 5739.033 of the 19 Revised Code be amended to read as follows: 20 Sec. 5739.01. As used in this chapter: 29 (A) "Person" includes individuals, receivers, assignees, 31 trustees in bankruptcy, estates, firms, partnerships, 32 associations, joint-stock companies, joint ventures, clubs, 33 societies, corporations, the state and its political 34 subdivisions, and combinations of individuals of any form. 35 (B) "Sale" and "selling" include all of the following 37 transactions for a consideration in any manner, whether 38 absolutely or conditionally, whether for a price or rental, in 39 money or by exchange, and by any means whatsoever: 40 (1) All transactions by which title or possession, or 42 both, of tangible personal property, is or is to be transferred, 43 or a license to use or consume tangible personal property is or 44 is to be granted; 45 (2) All transactions by which lodging by a hotel is or is 47 to be furnished to transient guests; 48 (3) All transactions by which: 50 2 (a) An item of tangible personal property is or is to be 52 repaired, except property, the purchase of which would be exempt 53 from the tax imposed by section 5739.02 of the Revised Code; 54 (b) An item of tangible personal property is or is to be 56 installed, except property, the purchase of which would be exempt 57 from the tax imposed by section 5739.02 of the Revised Code or 58 property that is or is to be incorporated into and will become a 59 part of a production, transmission, transportation, or 60 distribution system for the delivery of a public utility service; 61 (c) The service of washing, cleaning, waxing, polishing, 63 or painting a motor vehicle is or is to be furnished; 64 (d) Industrial laundry cleaning services are or are to be 66 provided; 67 (e) Automatic data processing, computer services, or 69 electronic information services are or are to be provided for use 70 in business when the true object of the transaction is the 71 receipt by the consumer of automatic data processing, computer 72 services, or electronic information services rather than the 73 receipt of personal or professional services to which automatic 74 data processing, computer services, or electronic information 75 services are incidental or supplemental. Notwithstanding any 76 other provision of this chapter, such transactions that occur 77 between members of an affiliated group are not sales. An 78 affiliated group means two or more persons related in such a way 79 that one person owns or controls the business operation of 80 another member of the group. In the case of corporations with 81 stock, one corporation owns or controls another if it owns more 82 than fifty per cent of the other corporation's common stock with 83 voting rights. 84 (f)TelecommunicationsEXCEPT AS PROVIDED IN DIVISION 87 (B)(8) OF THIS SECTION, TELECOMMUNICATIONS service is provided that originates or terminates in this state and is charged in the 89 records of the telecommunications service vendor to the 90 consumer's telephone number or account in this state, or that 91 3 both originates and terminates in this state; 92 (g) Landscaping and lawn care service is or is to be 94 provided; 95 (h) Private investigation and security service is or is to 97 be provided; 98 (i) Information services or tangible personal property is 100 provided or ordered by means of a nine hundred telephone call; 101 (j) Building maintenance and janitorial service is or is 103 to be provided; 104 (k) Employment service is or is to be provided; 106 (l) Employment placement service is or is to be provided; 108 (m) Exterminating service is or is to be provided; 110 (n) Physical fitness facility service is or is to be 112 provided; 113 (o) Recreation and sports club service is or is to be 115 provided. 116 (4) All transactions by which printed, imprinted, 118 overprinted, lithographic, multilithic, blueprinted, photostatic, 119 or other productions or reproductions of written or graphic 120 matter are or are to be furnished or transferred; 121 (5) The production or fabrication of tangible personal 123 property for a consideration for consumers who furnish either 124 directly or indirectly the materials used in the production of 125 fabrication work; and include the furnishing, preparing, or 126 serving for a consideration of any tangible personal property 127 consumed on the premises of the person furnishing, preparing, or 128 serving such tangible personal property. Except as provided in 129 section 5739.03 of the Revised Code, a construction contract 130 pursuant to which tangible personal property is or is to be 131 incorporated into a structure or improvement on and becoming a 132 part of real property is not a sale of such tangible personal 133 property. The construction contractor is the consumer of such 134 tangible personal property, provided that the sale and 135 installation of carpeting, the sale and installation of 136 4 agricultural land tile, the sale and erection or installation of 137 portable grain bins, or the provision of landscaping and lawn 138 care service and the transfer of property as part of such service 139 is never a construction contract. The transfer of copyrighted 140 motion picture films for exhibition purposes is not a sale, 141 except such films as are used solely for advertising purposes. 142 Other than as provided in this section, "sale" and "selling" do 143 not include professional, insurance, or personal service 144 transactions which involve the transfer of tangible personal 145 property as an inconsequential element, for which no separate 146 charges are made. 147 As used in division (B)(5) of this section: 149 (a) "Agricultural land tile" means fired clay or concrete 151 tile, or flexible or rigid perforated plastic pipe or tubing, 152 incorporated or to be incorporated into a subsurface drainage 153 system appurtenant to land used or to be used directly in 154 production by farming, agriculture, horticulture, or 155 floriculture. The term does not include such materials when they 156 are or are to be incorporated into a drainage system appurtenant 157 to a building or structure even if the building or structure is 158 used or to be used in such production. 159 (b) "Portable grain bin" means a structure that is used or 161 to be used by a person engaged in farming or agriculture to 162 shelter the person's grain and that is designed to be 163 disassembled without significant damage to its component parts. 164 (6) All transactions in which all of the shares of stock 166 of a closely held corporation are transferred, if the corporation 167 is not engaging in business and its entire assets consist of 168 boats, planes, motor vehicles, or other tangible personal 169 property operated primarily for the use and enjoyment of the 170 shareholders; 171 (7) All transactions in which a warranty, maintenance or 173 service contract, or similar agreement by which the vendor of the 174 warranty, contract, or agreement agrees to repair or maintain the 175 5 tangible personal property of the consumer is or is to be 176 provided; 177 (8) ALL TRANSACTIONS BY WHICH A PREPAID AUTHORIZATION 179 NUMBER USED TO MAKE A TELEPHONE CALL OR A PREPAID TELEPHONE 180 CALLING CARD IS OR IS TO BE TRANSFERRED. 181 (C) "Vendor" means the person providing the service or by 183 whom the transfer effected or license given by a sale is or is to 184 be made or given and, for sales described in division (B)(3)(i) 185 of this section, the telecommunications service vendor that 186 provides the nine hundred telephone service; if two or more 187 persons are engaged in business at the same place of business 188 under a single trade name in which all collections on account of 189 sales by each are made, such persons shall constitute a single 190 vendor. 191 Physicians, dentists, hospitals, and veterinarians who are 193 engaged in selling tangible personal property as received from 194 others, such as eyeglasses, mouthwashes, dentifrices, or similar 195 articles, are vendors. Veterinarians who are engaged in 196 transferring to others for a consideration drugs, the dispensing 197 of which does not require an order of a licensed veterinarian or 198 physician under federal law, are vendors. 199 (D)(1) "Consumer" means the person for whom the service is 201 provided, to whom the transfer effected or license given by a 202 sale is or is to be made or given, to whom the service described 203 in division (B)(3)(f) or (i) of this section is charged, or to 204 whom the admission is granted. 205 (2) Physicians, dentists, hospitals, and blood banks 207 operated by nonprofit institutions and persons licensed to 208 practice veterinary medicine, surgery, and dentistry are 209 consumers of all tangible personal property and services 210 purchased by them in connection with the practice of medicine, 211 dentistry, the rendition of hospital or blood bank service, or 212 the practice of veterinary medicine, surgery, and dentistry. In 213 addition to being consumers of drugs administered by them or by 214 6 their assistants according to their direction, veterinarians also 215 are consumers of drugs that under federal law may be dispensed 216 only by or upon the order of a licensed veterinarian or 217 physician, when transferred by them to others for a consideration 218 to provide treatment to animals as directed by the veterinarian. 219 (3) A person who performs a facility management, or 221 similar service contract for a contractee is a consumer of all 222 tangible personal property and services purchased for use in 223 connection with the performance of such contract, regardless of 224 whether title to any such property vests in the contractee. The 225 purchase of such property and services is not subject to the 226 exception for resale under division (E)(1) of this section. 227 (4)(a) In the case of a person who purchases printed 229 matter for the purpose of distributing it or having it 230 distributed to the public or to a designated segment of the 231 public, free of charge, that person is the consumer of that 232 printed matter, and the purchase of that printed matter for that 233 purpose is a sale. (b) In the case of a person who produces, rather than 235 purchases, printed matter for the purpose of distributing it or 236 having it distributed to the public or to a designated segment of 237 the public, free of charge, that person is the consumer of all 238 tangible personal property and services purchased for use or 239 consumption in the production of that printed matter. That 240 person is not entitled to claim exception under division (E)(8) 241 of this section for any material incorporated into the printed matter or any equipment, supplies, or services primarily used to 242 produce the printed matter. 243 (c) The distribution of printed matter to the public or to 246 a designated segment of the public, free of charge, is not a sale 247 to the members of the public to whom the printed matter is 248 distributed or to any persons who purchase space in the printed matter for advertising or other purposes. 249 (5) A person who makes sales of any of the services listed 251 7 in division (B)(3) of this section is the consumer of any 252 tangible personal property used in performing the service. The 253 purchase of that property is not subject to the resale exception 254 under division (E)(1) of this section. 255 (E) "Retail sale" and "sales at retail" include all sales 257 except those in which the purpose of the consumer is: 258 (1) To resell the thing transferred or benefit of the 260 service provided, by a person engaging in business, in the form 261 in which the same is, or is to be, received by the person; 262 (2) To incorporate the thing transferred as a material or 264 a part, into tangible personal property to be produced for sale 265 by manufacturing, assembling, processing, or refining, or to use 266 or consume the thing transferred directly in producing a product 267 for sale by mining, including without limitation the extraction 269 from the earth of all substances which are classed geologically 270 as minerals, production of crude oil and natural gas, farming, 271 agriculture, horticulture, or floriculture, and persons engaged 272 in rendering farming, agricultural, horticultural, or 273 floricultural services, and services in the exploration for, and 274 production of, crude oil and natural gas, for others are deemed 275 engaged directly in farming, agriculture, horticulture, and 276 floriculture, or exploration for, and production of, crude oil 277 and natural gas; directly in the rendition of a public utility 278 service, except that the sales tax levied by section 5739.02 of 279 the Revised Code shall be collected upon all meals, drinks, and 280 food for human consumption sold upon Pullman and railroad 281 coaches. This paragraph does not exempt or except from "retail 282 sale" or "sales at retail" the sale of tangible personal property 283 that is to be incorporated into a structure or improvement to 284 real property. (3) To hold the thing transferred as security for the 286 performance of an obligation of the vendor; 287 (4) To use or consume the thing transferred in the process 289 of reclamation as required by Chapters 1513. and 1514. of the 290 8 Revised Code; 291 (5) To resell, hold, use, or consume the thing transferred 293 as evidence of a contract of insurance; 294 (6) To use or consume the thing directly in commercial 296 fishing; 297 (7) To incorporate the thing transferred as a material or 299 a part into, or to use or consume the thing transferred directly 300 in the production of, magazines distributed as controlled 301 circulation publications; 302 (8) To use or consume the thing transferred in the 304 production and preparation in suitable condition for market and 305 sale of printed, imprinted, overprinted, lithographic, 306 multilithic, blueprinted, photostatic, or other productions or 307 reproductions of written or graphic matter; 308 (9) To use the thing transferred, as described in section 310 5739.011 of the Revised Code, primarily in a manufacturing 311 operation to produce tangible personal property for sale; 312 (10) To use the benefit of a warranty, maintenance or 314 service contract, or similar agreement, as defined in division 315 (B)(7) of this section, to repair or maintain tangible personal 316 property, if all of the property that is the subject of the 317 warranty, contract, or agreement would be exempt on its purchase 318 from the tax imposed by section 5739.02 of the Revised Code; 319 (11) To use the thing transferred as qualified research 321 and development equipment; 322 (12) To use or consume the thing transferred primarily in 324 storing, transporting, mailing, or otherwise handling purchased 325 sales inventory in a warehouse, distribution center, or similar 326 facility when the inventory is primarily distributed outside this 327 state to retail stores of the person who owns or controls the 328 warehouse, distribution center, or similar facility, to retail 329 stores of an affiliated group of which that person is a member, 330 or by means of direct marketing. Division (E)(12) of this 331 section does not apply to motor vehicles registered for operation 332 9 on the public highways. As used in division (E)(12) of this 333 section, "affiliated group" has the same meaning as in division 334 (B)(3)(e) of this section and "direct marketing" has the same 335 meaning as in division (B)(37) of section 5739.02 of the Revised 336 Code. 337 (13) To use or consume the thing transferred to fulfill a 339 contractual obligation incurred by a warrantor pursuant to a 340 warranty provided as a part of the price of the tangible personal 341 property sold or by a vendor of a warranty, maintenance or 342 service contract, or similar agreement the provision of which is 343 defined as a sale under division (B)(7) of this section; 344 (14) To use or consume the thing transferred in the 346 production of a newspaper for distribution to the public; 347 (15) To use tangible personal property to perform a 349 service listed in division (B)(3) of this section, if the 350 property is or is to be permanently transferred to the consumer 351 of the service as an integral part of the performance of the 352 service. DIVISION (E)(15) OF THIS SECTION DOES NOT APPLY TO A 353 PREPAID AUTHORIZATION NUMBER USED TO MAKE A TELEPHONE CALL OR A 354 PREPAID TELEPHONE CALLING CARD. As used in division (E) of this section, "thing" includes 356 all transactions included in divisions (B)(3)(a), (b), and (e) of 358 this section. Sales conducted through a coin-operated device that 360 activates vacuum equipment or equipment that dispenses water, 361 whether or not in combination with soap or other cleaning agents 362 or wax, to the consumer for the consumer's use on the premises in 364 washing, cleaning, or waxing a motor vehicle, provided no other personal property or personal service is provided as part of the 365 transaction, are not retail sales or sales at retail. 366 (F) "Business" includes any activity engaged in by any 368 person with the object of gain, benefit, or advantage, either 369 direct or indirect. "Business" does not include the activity of 370 a person in managing and investing the person's own funds. 371 10 (G) "Engaging in business" means commencing, conducting, 373 or continuing in business, and liquidating a business when the 374 liquidator thereof holds self out to the public as conducting 376 such business. Making a casual sale is not engaging in business. (H)(1) "Price," except as provided in divisions (H)(2) and 378 (3) of this section, means the aggregate value in money of 379 anything paid or delivered, or promised to be paid or delivered, 380 in the complete performance of a retail sale, without any 381 deduction on account of the cost of the property sold, cost of 382 materials used, labor or service cost, interest, discount paid or 383 allowed after the sale is consummated, or any other expense. If 384 the retail sale consists of the rental or lease of tangible 385 personal property, "price" means the aggregate value in money of 386 anything paid or delivered, or promised to be paid or delivered, 387 in the complete performance of the rental or lease, without any 388 deduction for tax, interest, labor or service charge, damage 389 liability waiver, termination or damage charge, discount paid or 390 allowed after the lease is consummated, or any other expense. The 392 sales tax shall be calculated and collected by the lessor on each 393 payment made by the lessee. Price does not include the consideration received as a deposit refundable to the consumer 394 upon return of a beverage container, the consideration received 395 as a deposit on a carton or case that is used for such returnable 396 containers, or the consideration received as a refundable 397 security deposit for the use of tangible personal property to the 398 extent that it actually is refunded, if the consideration for 399 such refundable deposit is separately stated from the 400 consideration received or to be received for the tangible 401 personal property transferred in the retail sale. Such 402 separation must appear in the sales agreement or on the initial 403 invoice or initial billing rendered by the vendor to the 404 consumer. Price is the amount received inclusive of the tax, 405 provided the vendor establishes to the satisfaction of the tax 406 commissioner that the tax was added to the price. When the price 407 11 includes both a charge for tangible personal property and a 408 charge for providing a service and the sale of the property and 409 the charge for the service are separately taxable, or have a 410 separately determinable tax status, the price shall be separately 411 stated for each such charge so the tax can be correctly computed 412 and charged. 413 The tax collected by the vendor from the consumer under 415 this chapter is not part of the price, but is a tax collection 416 for the benefit of the state and of counties levying an 417 additional sales tax pursuant to section 5739.021 or 5739.026 of 418 the Revised Code and of transit authorities levying an additional 419 sales tax pursuant to section 5739.023 of the Revised Code. 420 Except for the discount authorized in section 5739.12 of the 421 Revised Code, no person other than the state or such a county or 422 transit authority shall derive any benefit from the collection or 423 payment of such tax. 424 (2) In the case of a sale of any new motor vehicle by a 426 new motor vehicle dealer, as defined in section 4517.01 of the 427 Revised Code, in which another motor vehicle is accepted by the 428 dealer as part of the consideration received, "price" has the 429 same meaning as in division (H)(1) of this section, reduced by 430 the credit afforded the consumer by the dealer for the motor 431 vehicle received in trade. 432 (3) In the case of a sale of any watercraft or outboard 434 motor by a watercraft dealer licensed in accordance with section 435 1547.543 of the Revised Code, in which another watercraft, 436 watercraft and trailer, or outboard motor is accepted by the 437 dealer as part of the consideration received, "price" has the 438 same meaning as in division (H)(1) of this section, reduced by 439 the credit afforded the consumer by the dealer for the 440 watercraft, watercraft and trailer, or outboard motor received in 441 trade. As used in division (H)(3) of this section, "watercraft" 442 includes an outdrive unit attached to the watercraft. 443 (I) "Receipts" means the total amount of the prices of the 445 12 sales of vendors, provided that cash discounts allowed and taken 446 on sales at the time they are consummated are not included, minus 447 any amount deducted as a bad debt pursuant to section 5739.121 of 448 the Revised Code. "Receipts" does not include the sale price of 449 property returned or services rejected by consumers when the full 450 sale price and tax are refunded either in cash or by credit. 451 (J) "Place of business" means any location at which a 453 person engages in business. 454 (K) "Premises" includes any real property or portion 456 thereof upon which any person engages in selling tangible 457 personal property at retail or making retail sales and also 458 includes any real property or portion thereof designated for, or 459 devoted to, use in conjunction with the business engaged in by 460 such person. 461 (L) "Casual sale" means a sale of an item of tangible 463 personal property which was obtained by the person making the 464 sale, through purchase or otherwise, for the person's own use in 465 this state and which was previously subject to the state's taxing 466 jurisdiction on its sale or use, and includes such items acquired 467 for the seller's use which are sold by an auctioneer employed 468 directly by the person for such purpose, provided the location of 469 such sales is not the auctioneer's permanent place of business. 470 As used in this division, "permanent place of business" includes 471 any location where such auctioneer has conducted more than two 472 auctions during the year. 473 (M) "Hotel" means every establishment kept, used, 475 maintained, advertised or held out to the public to be a place 476 where sleeping accommodations are offered to guests, in which 477 five or more rooms are used for the accommodation of such guests, 478 whether such rooms are in one or several structures. 479 (N) "Transient guests" means persons occupying a room or 481 rooms for sleeping accommodations for less than thirty 482 consecutive days. 483 (O) "Making retail sales" means the effecting of 485 13 transactions wherein one party is obligated to pay the price and 486 the other party is obligated to provide a service or to transfer 487 title to or possession of the item sold. "Making retail sales" 488 does not include the preliminary acts of promoting or soliciting 489 the retail sales, other than the distribution of printed matter 490 which displays or describes and prices the item offered for sale, 491 nor does it include delivery of a predetermined quantity of 492 tangible personal property or transportation of property or 493 personnel to or from a place where a service is performed, 494 regardless of whether the vendor is a delivery vendor. 495 (P) "Used directly in the rendition of a public utility 497 service" means that property which is to be incorporated into and 498 will become a part of the consumer's production, transmission, 499 transportation, or distribution system and which retains its 500 classification as tangible personal property after such 501 incorporation; fuel or power used in the production, 502 transmission, transportation, or distribution system; and 503 tangible personal property used in the repair and maintenance of 504 the production, transmission, transportation, or distribution 505 system, including only such motor vehicles as are specially 506 designed and equipped for such use. Tangible personal property 507 and services used primarily in providing highway transportation 508 for hire are not used in providing a public utility service as 509 defined in this division. 510 (Q) "Refining" means removing or separating a desirable 512 product from raw or contaminated materials by distillation or 513 physical, mechanical, or chemical processes. 514 (R) "Assembly" and "assembling" mean attaching or fitting 516 together parts to form a product, but do not include packaging a 517 product. 518 (S) "Manufacturing operation" means a process in which 520 materials are changed, converted, or transformed into a different 521 state or form from which they previously existed and includes 522 refining materials, assembling parts, and preparing raw materials 523 14 and parts by mixing, measuring, blending, or otherwise committing 524 such materials or parts to the manufacturing process. 525 "Manufacturing operation" does not include packaging. 526 (T) "Fiscal officer" means, with respect to a regional 528 transit authority, the secretary-treasurer thereof, and with 529 respect to a county which is a transit authority, the fiscal 530 officer of the county transit board if one is appointed pursuant 531 to section 306.03 of the Revised Code or the county auditor if 532 the board of county commissioners operates the county transit 533 system. (U) "Transit authority" means a regional transit authority 535 created pursuant to section 306.31 of the Revised Code or a 536 county in which a county transit system is created pursuant to 537 section 306.01 of the Revised Code. For the purposes of this 538 chapter, a transit authority must extend to at least the entire 539 area of a single county. A transit authority which includes 540 territory in more than one county must include all the area of 541 the most populous county which is a part of such transit 542 authority. County population shall be measured by the most 543 recent census taken by the United States census bureau. 544 (V) "Legislative authority" means, with respect to a 546 regional transit authority, the board of trustees thereof, and 547 with respect to a county which is a transit authority, the board 548 of county commissioners. 549 (W) "Territory of the transit authority" means all of the 551 area included within the territorial boundaries of a transit 552 authority as they from time to time exist. Such territorial 553 boundaries must at all times include all the area of a single 554 county or all the area of the most populous county which is a 555 part of such transit authority. County population shall be 556 measured by the most recent census taken by the United States 557 census bureau. 558 (X) "Providing a service" means providing or furnishing 560 anything described in division (B)(3) of this section for 561 15 consideration. 562 (Y)(1)(a) "Automatic data processing" means processing of 564 others' data, including keypunching or similar data entry 565 services together with verification thereof, or providing access 566 to computer equipment for the purpose of processing data. 567 (b) "Computer services" means providing services 569 consisting of specifying computer hardware configurations and 570 evaluating technical processing characteristics, computer 571 programming, and training of computer programmers and operators, 572 provided in conjunction with and to support the sale, lease, or 573 operation of taxable computer equipment or systems. 574 (c) "Electronic information services" means providing 576 access to computer equipment by means of telecommunications 577 equipment for the purpose of either of the following: 578 (i) Examining or acquiring data stored in or accessible to 580 the computer equipment; 581 (ii) Placing data into the computer equipment to be 583 retrieved by designated recipients with access to the computer 584 equipment. 585 (d) "Automatic data processing, computer services, or 587 electronic information services" shall not include personal or 588 professional services. 589 (2) As used in divisions (B)(3)(e) and (Y)(1) of this 591 section, "personal and professional services" means all services 592 other than automatic data processing, computer services, or 593 electronic information services, including but not limited to: 594 (a) Accounting and legal services such as advice on tax 596 matters, asset management, budgetary matters, quality control, 597 information security, and auditing and any other situation where 598 the service provider receives data or information and studies, 599 alters, analyzes, interprets, or adjusts such material; 600 (b) Analyzing business policies and procedures; 602 (c) Identifying management information needs; 604 (d) Feasibility studies including economic and technical 606 16 analysis of existing or potential computer hardware or software 607 needs and alternatives; 608 (e) Designing policies, procedures, and custom software 610 for collecting business information, and determining how data 611 should be summarized, sequenced, formatted, processed, controlled 612 and reported so that it will be meaningful to management; 613 (f) Developing policies and procedures that document how 615 business events and transactions are to be authorized, executed, 616 and controlled; 617 (g) Testing of business procedures; 619 (h) Training personnel in business procedure applications; 621 (i) Providing credit information to users of such 623 information by a consumer reporting agency, as defined in the 624 "Fair Credit Reporting Act," 84 Stat. 1114, 1129 (1970), 15 625 U.S.C. 1681a(f), or as hereafter amended, including but not 626 limited to gathering, organizing, analyzing, recording, and 627 furnishing such information by any oral, written, graphic, or 628 electronic medium; 629 (j) Providing debt collection services by any oral, 631 written, graphic, or electronic means. 632 The services listed in divisions (Y)(2)(a) to (j) of this 634 section are not automatic data processing or computer services. 635 (Z) "Highway transportation for hire" means the 637 transportation of personal property belonging to others for 638 consideration by any of the following: 639 (1) The holder of a permit or certificate issued by this 641 state or the United States authorizing the holder to engage in 642 transportation of personal property belonging to others for 643 consideration over or on highways, roadways, streets, or any 644 similar public thoroughfare; 645 (2) A person who engages in the transportation of personal 647 property belonging to others for consideration over or on 648 highways, roadways, streets, or any similar public thoroughfare 649 but who could not have engaged in such transportation on December 650 17 11, 1985, unless the person was the holder of a permit or 651 certificate of the types described in division (Z)(1) of this 652 section; (3) A person who leases a motor vehicle to and operates it 654 for a person described by division (Z)(1) or (2) of this section. 655 (AA) "Telecommunications service" means the transmission 657 of any interactive, two-way electromagnetic communications, 658 including voice, image, data, and information, through the use of 659 any medium such as wires, cables, microwaves, cellular radio, 660 radio waves, light waves, or any combination of those or similar 661 media. "Telecommunications service" includes message toll 662 service even though the vendor provides the message toll service 663 by means of wide area transmission type service or private 664 communications service purchased from another telecommunications 665 service provider, but does not include any of the following: 666 (1) Sales of incoming or outgoing wide area transmission 668 service or wide area transmission type service, including eight 669 hundred or eight-hundred-type service, to the person contracting 670 for the receipt of that service; 671 (2) Sales of private communications service to the person 673 contracting for the receipt of that service that entitles the 674 purchaser to exclusive or priority use of a communications 675 channel or group of channels between exchanges; 676 (3) Sales of telecommunications service by companies 678 subject to the excise tax imposed by Chapter 5727. of the Revised 679 Code; 680 (4) Sales of telecommunications service to a provider of 682 telecommunications service, including access services, for use in 683 providing telecommunications service; 684 (5) Value-added nonvoice services in which computer 686 processing applications are used to act on the form, content, 687 code, or protocol of the information to be transmitted; 688 (6) Transmission of interactive video programming by a 690 cable television system as defined in section 505.90 of the 691 18 Revised Code. 692 (BB) "Industrial laundry cleaning services" means removing 694 soil or dirt from or supplying towels, linens, or articles of 695 clothing that belong to others and are used in a trade or 696 business. 697 (CC) "Magazines distributed as controlled circulation 699 publications" means magazines containing at least twenty-four 700 pages, at least twenty-five per cent editorial content, issued at 701 regular intervals four or more times a year, and circulated 702 without charge to the recipient, provided that such magazines are 703 not owned or controlled by individuals or business concerns which 704 conduct such publications as an auxiliary to, and essentially for 705 the advancement of the main business or calling of, those who own 706 or control them. 707 (DD) "Landscaping and lawn care service" means the 709 services of planting, seeding, sodding, removing, cutting, 710 trimming, pruning, mulching, aerating, applying chemicals, 711 watering, fertilizing, and providing similar services to 712 establish, promote, or control the growth of trees, shrubs, 713 flowers, grass, ground cover, and other flora, or otherwise 714 maintaining a lawn or landscape grown or maintained by the owner 715 for ornamentation or other nonagricultural purpose. However, 716 "landscaping and lawn care service" does not include the 717 providing of such services by a person who has less than five 718 thousand dollars in sales of such services during the calendar 719 year. 720 (EE) "Private investigation and security service" means 722 the performance of any activity for which the provider of such 723 service is required to be licensed pursuant to Chapter 4749. of 724 the Revised Code, or would be required to be so licensed in 725 performing such services in this state, and also includes the 726 services of conducting polygraph examinations and of monitoring 727 or overseeing the activities on or in, or the condition of, the 728 consumer's home, business, or other facility by means of 729 19 electronic or similar monitoring devices. "Private investigation 730 and security service" does not include special duty services 731 provided by off-duty police officers, deputy sheriffs, and other 732 peace officers regularly employed by the state or a political 733 subdivision. 734 (FF) "Information services" means providing conversation, 736 giving consultation or advice, playing or making a voice or other 737 recording, making or keeping a record of the number of callers, 738 and any other service provided to a consumer by means of a nine 739 hundred telephone call, except when the nine hundred telephone 740 call is the means by which the consumer makes a contribution to a 741 recognized charity. 742 (GG) "Research and development" means designing, creating, 744 or formulating new or enhanced products, equipment, or 745 manufacturing processes, and conducting scientific or 746 technological inquiry and experimentation in the physical 747 sciences with the goal of increasing scientific knowledge which 748 may reveal the bases for new or enhanced products, equipment, or 749 manufacturing processes. 750 (HH) "Qualified research and development equipment" means 752 capitalized tangible personal property, and leased personal 753 property that would be capitalized if purchased, used by a person 754 primarily to perform research and development. Tangible personal 755 property primarily used in testing, as defined in division (A)(4) 756 of section 5739.011 of the Revised Code, or used for recording or 757 storing test results, is not qualified research and development 758 equipment unless such property is primarily used by the consumer 759 in testing the product, equipment, or manufacturing process being 760 created, designed, or formulated by the consumer in the research 761 and development activity or in recording or storing such test 762 results. 763 (II) "Building maintenance and janitorial service" means 765 cleaning the interior or exterior of a building and any tangible 766 personal property located therein or thereon, including any 767 20 services incidental to such cleaning for which no separate charge 768 is made. However, "building maintenance and janitorial service" 769 does not include the providing of such service by a person who 770 has less than five thousand dollars in sales of such service 771 during the calendar year. 772 (JJ) "Employment service" means providing or supplying 774 personnel, on a temporary or long-term basis, to perform work or 775 labor under the supervision or control of another, when the 776 personnel so supplied receive their wages, salary, or other 777 compensation from the provider of the service. "Employment 778 service" does not include: 779 (1) Acting as a contractor or subcontractor, where the 781 personnel performing the work are not under the direct control of 782 the purchaser. 783 (2) Medical and health care services. 785 (3) Supplying personnel to a purchaser pursuant to a 787 contract of at least one year between the service provider and 788 the purchaser that specifies that each employee covered under the 789 contract is assigned to the purchaser on a permanent basis. 790 (4) Transactions between members of an affiliated group, 792 as defined in division (B)(3)(e) of this section. 793 (KK) "Employment placement service" means locating or 795 finding employment for a person or finding or locating an 796 employee to fill an available position. 797 (LL) "Exterminating service" means eradicating or 799 attempting to eradicate vermin infestations from a building or 800 structure, or the area surrounding a building or structure, and 801 includes activities to inspect, detect, or prevent vermin 802 infestation of a building or structure. 803 (MM) "Physical fitness facility service" means all 805 transactions by which a membership is granted, maintained, or 806 renewed, including initiation fees, membership dues, renewal 807 fees, monthly minimum fees, and other similar fees and dues, by a 808 physical fitness facility such as an athletic club, health spa, 809 21 or gymnasium, which entitles the member to use the facility for 810 physical exercise. 811 (NN) "Recreation and sports club service" means all 813 transactions by which a membership is granted, maintained, or 814 renewed, including initiation fees, membership dues, renewal 815 fees, monthly minimum fees, and other similar fees and dues, by a 816 recreation and sports club, which entitles the member to use the 817 facilities of the organization. "Recreation and sports club" 818 means an organization that has ownership of, or controls or 819 leases on a continuing, long-term basis, the facilities used by 820 its members and includes an aviation club, gun or shooting club, 821 yacht club, card club, swimming club, tennis club, golf club, 822 country club, riding club, amateur sports club, or similar 823 organization. 824 (OO) "Livestock" means farm animals commonly raised for 826 food or food production, and includes but is not limited to 827 cattle, sheep, goats, swine, and poultry. "Livestock" does not 828 include invertebrates, fish, amphibians, reptiles, horses, 829 domestic pets, animals for use in laboratories or for exhibition, 830 or other animals not commonly raised for food or food production. 831 (PP) "Livestock structure" means a building or structure 833 used exclusively for the housing, raising, feeding, or sheltering 834 of livestock, and includes feed storage or handling structures 835 and structures for livestock waste handling. 836 (QQ) "Horticulture" means the growing, cultivation, and 838 production of flowers, fruits, herbs, vegetables, sod, mushrooms, 839 and nursery stock. As used in this division, "nursery stock" has 840 the same meaning as in section 927.51 of the Revised Code. 841 (RR) "Horticulture structure" means a building or 843 structure used exclusively for the commercial growing, raising, 844 or overwintering of horticultural products, and includes the area 845 used for stocking, storing, and packing horticultural products 846 when done in conjunction with the production of those products. 847 (SS) "Newspaper" means an unbound publication bearing a 849 22 title or name that is regularly published, at least as frequently 850 as biweekly, and distributed from a fixed place of business to 851 the public in a specific geographic area, and that contains a 852 substantial amount of news matter of international, national, or 853 local events of interest to the general public. (TT) "Professional racing team" means a person that 856 employs at least twenty full-time employees for the purpose of 857 conducting a motor vehicle racing business for profit. The 858 person must conduct the business with the purpose of racing one 859 or more motor racing vehicles in at least ten competitive 860 professional racing events each year that comprise all or part of 861 a motor racing series sanctioned by one or more motor racing 862 sanctioning organizations. A "motor racing vehicle" means a 863 vehicle for which the chassis, engine, and parts are designed 864 exclusively for motor racing, and does not include a stock or 866 production model vehicle that may be modified for use in racing. 867 For the purposes of this division: (1) A "competitive professional racing event" is a motor 869 vehicle racing event sanctioned by one or more motor racing 870 sanctioning organizations, at which aggregate cash prizes in 871 excess of eight hundred thousand dollars are awarded to the 873 competitors. (2) "Full-time employee" means an individual who is 875 employed for consideration for thirty-five or more hours a week, 876 or who renders any other standard of service generally accepted 877 by custom or specified by contract as full-time employment. 879 Sec. 5739.033. The amount of tax due pursuant to sections 888 5739.02, 5739.021, 5739.023, and 5739.026 of the Revised Code is 889 the sum of the taxes imposed pursuant to those sections at the 890 situs of the consummation of the sale as determined under this 891 section. 892 (A) Except as otherwise provided in this section and 894 division (C) of section 5739.031 of the Revised Code, all sales 895 are conclusively determined to be consummated at the vendor's 896 23 place of business. 897 (1) If the consumer or the consumer's agent takes 899 possession of the tangible personal property at a place of 900 business of the vendor where the purchase contract or agreement 901 was made, the sale is consummated at that place of business. 902 (2) If the consumer or the consumer's agent takes 904 possession of the tangible personal property other than at a 905 place of business of the vendor, or takes possession at a 906 warehouse or similar facility of the vendor, the sale is 907 consummated at the vendor's place of business where the purchase 908 contract or agreement was made or the purchase order was 909 received. (3) If the vendor provides a service specified in division 911 (B)(3)(a), (b), (c), (d), (n), or (o) of section 5739.01 of the 913 Revised Code, the sale is consummated at the vendor's place of 914 business where the service is performed or the contract or 915 agreement for the service was made or the purchase order was 916 received. (B) If the vendor is a transient vendor as specified in 918 division (B) of section 5739.17 of the Revised Code, the sale is 919 conclusively determined to be consummated at the vendor's 920 temporary place of business or, if the transient vendor is the 921 lessor of titled motor vehicles, titled watercraft, or titled 922 outboard motors, at the location where the lessee keeps the 923 leased property. 924 (C) If the vendor is a limited vendor as specified in 926 division (B) of section 5739.17 of the Revised Code, the sale is 927 conclusively determined to be consummated at the temporary event 928 at which the vendor is making sales. 929 (D) If the vendor makes sales of tangible personal 931 property from a stock of goods carried in a motor vehicle, from 932 which the purchaser makes selection and takes possession, or from 933 which the vendor sells tangible personal property the quantity of 934 which has not been determined prior to the time the purchaser 935 24 takes possession, the sale is conclusively determined to be 936 consummated at the location of the motor vehicle when the sale is 937 made. 938 (E) If the vendor is a delivery vendor as specified in 940 division (D) of section 5739.17 of the Revised Code, the sale is 941 conclusively determined to be consummated at the place where the 942 tangible personal property is delivered, where the leased 943 property is used, or where the service is performed or received. 944 (F) If the vendor provides a service specified in division 946 (B)(3)(e), (g), (h), (j), (k), (l), or (m) of section 5739.01 of 948 the Revised Code, the sale is conclusively determined to be 949 consummated at the location of the consumer where the service is 950 performed or received. 951 (G)IfEXCEPT AS PROVIDED IN DIVISION (J) OF THIS SECTION, 953 IF the vendor provides a service specified in division (B)(3)(f) 955 or (i) of section 5739.01 of the Revised Code, the sale is 956 conclusively determined to be consummated at the location of the 957 telephone number or account as reflected in the records of the 958 vendor. If, in the case of a telecommunications service, the telephone number or account is located outside this state, the 959 sale is conclusively determined to be consummated at the location 960 in this state from which the service originated. 961 (H) If the vendor provides lodging to transient guests as 963 specified in division (B)(2) of section 5739.01 of the Revised 964 Code, the sale is conclusively determined to be consummated at 965 the location where the lodging is located. 966 (I) If the vendor sells a warranty, maintenance or service 968 contract, or similar agreement as specified in division (B)(7) of 969 section 5739.01 of the Revised Code and the vendor is a delivery 970 vendor, the sale is conclusively determined to be consummated at 971 the location of the consumer. If the vendor is not a delivery 972 vendor, the sale is conclusively determined to be consummated at 973 the vendor's place of business where the contract or agreement 974 was made, unless the warranty or contract is a component of the 975 25 sale of a titled motor vehicle, titled watercraft, or titled 976 outboard motor, in which case the sale is conclusively determined 977 to be consummated in the county of titling. 978 (J) IF THE VENDOR SELLS A PREPAID AUTHORIZATION NUMBER 980 USED TO MAKE A TELEPHONE CALL OR A PREPAID TELEPHONE CALLING 981 CARD, THE SALE IS CONCLUSIVELY DETERMINED TO BE CONSUMMATED AT 982 THE VENDOR'S PLACE OF BUSINESS AND SHALL BE TAXED AT THE TIME OF 983 SALE. Section 2. That existing sections 5739.01 and 5739.033 of 985 the Revised Code are hereby repealed. 986 Section 3. Sections 1 and 2 of this act shall take effect 988 January 1, 2000.