As Passed by the Senate 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
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(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) Telecommunications EXCEPT 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
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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
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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
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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
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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
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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
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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
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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
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(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
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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
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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
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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
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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
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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
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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
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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) If EXCEPT 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.