As Reported by House Ways and Means Committee 1
122nd General Assembly 4
Regular Session Sub. S. B. No. 173 5
1997-1998 6
SENATORS B. JOHNSON-NEIN REPRESENTATIVES 9
THOMAS-CORBIN-MOTTLEY-JOLIVETTE
_________________________________________________________________ 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
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(3) All transactions by which: 50
(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 service is provided that originates 87
or terminates in this state and is charged in the records of the 88
telecommunications service vendor to the consumer's telephone 89
number or account in this state, or that both originates and 90
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terminates in this state; BUT DOES NOT INCLUDE TRANSACTIONS BY 91
WHICH TELECOMMUNICATIONS SERVICE IS PAID FOR BY USING A PREPAID 92
AUTHORIZATION NUMBER OR PREPAID TELEPHONE CALLING CARD; 93
(g) Landscaping and lawn care service is or is to be 95
provided; 96
(h) Private investigation and security service is or is to 98
be provided; 99
(i) Information services or tangible personal property is 101
provided or ordered by means of a nine hundred telephone call; 102
(j) Building maintenance and janitorial service is or is 104
to be provided; 105
(k) Employment service is or is to be provided; 107
(l) Employment placement service is or is to be provided; 109
(m) Exterminating service is or is to be provided; 111
(n) Physical fitness facility service is or is to be 113
provided; 114
(o) Recreation and sports club service is or is to be 116
provided. 117
(4) All transactions by which printed, imprinted, 119
overprinted, lithographic, multilithic, blueprinted, photostatic, 120
or other productions or reproductions of written or graphic 121
matter are or are to be furnished or transferred; 122
(5) The production or fabrication of tangible personal 124
property for a consideration for consumers who furnish either 125
directly or indirectly the materials used in the production of 126
fabrication work; and include the furnishing, preparing, or 127
serving for a consideration of any tangible personal property 128
consumed on the premises of the person furnishing, preparing, or 129
serving such tangible personal property. Except as provided in 130
section 5739.03 of the Revised Code, a construction contract 131
pursuant to which tangible personal property is or is to be 132
incorporated into a structure or improvement on and becoming a 133
part of real property is not a sale of such tangible personal 134
property. The construction contractor is the consumer of such 135
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tangible personal property, provided that the sale and 136
installation of carpeting, the sale and installation of 137
agricultural land tile, the sale and erection or installation of 138
portable grain bins, or the provision of landscaping and lawn 139
care service and the transfer of property as part of such service 140
is never a construction contract. The transfer of copyrighted 141
motion picture films for exhibition purposes is not a sale, 142
except such films as are used solely for advertising purposes. 143
Other than as provided in this section, "sale" and "selling" do 144
not include professional, insurance, or personal service 145
transactions which involve the transfer of tangible personal 146
property as an inconsequential element, for which no separate 147
charges are made. 148
As used in division (B)(5) of this section: 150
(a) "Agricultural land tile" means fired clay or concrete 152
tile, or flexible or rigid perforated plastic pipe or tubing, 153
incorporated or to be incorporated into a subsurface drainage 154
system appurtenant to land used or to be used directly in 155
production by farming, agriculture, horticulture, or 156
floriculture. The term does not include such materials when they 157
are or are to be incorporated into a drainage system appurtenant 158
to a building or structure even if the building or structure is 159
used or to be used in such production. 160
(b) "Portable grain bin" means a structure that is used or 162
to be used by a person engaged in farming or agriculture to 163
shelter the person's grain and that is designed to be 164
disassembled without significant damage to its component parts. 165
(6) All transactions in which all of the shares of stock 167
of a closely held corporation are transferred, if the corporation 168
is not engaging in business and its entire assets consist of 169
boats, planes, motor vehicles, or other tangible personal 170
property operated primarily for the use and enjoyment of the 171
shareholders; 172
(7) All transactions in which a warranty, maintenance or 174
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service contract, or similar agreement by which the vendor of the 175
warranty, contract, or agreement agrees to repair or maintain the 176
tangible personal property of the consumer is or is to be 177
provided; 178
(8) ALL TRANSACTIONS BY WHICH A PREPAID AUTHORIZATION 180
NUMBER OR A PREPAID TELEPHONE CALLING CARD IS OR IS TO BE 181
TRANSFERRED. 182
(C) "Vendor" means the person providing the service or by 184
whom the transfer effected or license given by a sale is or is to 185
be made or given and, for sales described in division (B)(3)(i) 186
of this section, the telecommunications service vendor that 187
provides the nine hundred telephone service; if two or more 188
persons are engaged in business at the same place of business 189
under a single trade name in which all collections on account of 190
sales by each are made, such persons shall constitute a single 191
vendor. 192
Physicians, dentists, hospitals, and veterinarians who are 194
engaged in selling tangible personal property as received from 195
others, such as eyeglasses, mouthwashes, dentifrices, or similar 196
articles, are vendors. Veterinarians who are engaged in 197
transferring to others for a consideration drugs, the dispensing 198
of which does not require an order of a licensed veterinarian or 199
physician under federal law, are vendors. 200
(D)(1) "Consumer" means the person for whom the service is 202
provided, to whom the transfer effected or license given by a 203
sale is or is to be made or given, to whom the service described 204
in division (B)(3)(f) or (i) of this section is charged, or to 205
whom the admission is granted. 206
(2) Physicians, dentists, hospitals, and blood banks 208
operated by nonprofit institutions and persons licensed to 209
practice veterinary medicine, surgery, and dentistry are 210
consumers of all tangible personal property and services 211
purchased by them in connection with the practice of medicine, 212
dentistry, the rendition of hospital or blood bank service, or 213
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the practice of veterinary medicine, surgery, and dentistry. In 214
addition to being consumers of drugs administered by them or by 215
their assistants according to their direction, veterinarians also 216
are consumers of drugs that under federal law may be dispensed 217
only by or upon the order of a licensed veterinarian or 218
physician, when transferred by them to others for a consideration 219
to provide treatment to animals as directed by the veterinarian. 220
(3) A person who performs a facility management, or 222
similar service contract for a contractee is a consumer of all 223
tangible personal property and services purchased for use in 224
connection with the performance of such contract, regardless of 225
whether title to any such property vests in the contractee. The 226
purchase of such property and services is not subject to the 227
exception for resale under division (E)(1) of this section. 228
(4)(a) In the case of a person who purchases printed 230
matter for the purpose of distributing it or having it 231
distributed to the public or to a designated segment of the 232
public, free of charge, that person is the consumer of that 233
printed matter, and the purchase of that printed matter for that 234
purpose is a sale.
(b) In the case of a person who produces, rather than 236
purchases, printed matter for the purpose of distributing it or 237
having it distributed to the public or to a designated segment of 238
the public, free of charge, that person is the consumer of all 239
tangible personal property and services purchased for use or 240
consumption in the production of that printed matter. That 241
person is not entitled to claim exception under division (E)(8) 242
of this section for any material incorporated into the printed
matter or any equipment, supplies, or services primarily used to 243
produce the printed matter. 244
(c) The distribution of printed matter to the public or to 247
a designated segment of the public, free of charge, is not a sale 248
to the members of the public to whom the printed matter is 249
distributed or to any persons who purchase space in the printed
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matter for advertising or other purposes. 250
(5) A person who makes sales of any of the services listed 252
in division (B)(3) of this section is the consumer of any 253
tangible personal property used in performing the service. The 254
purchase of that property is not subject to the resale exception 255
under division (E)(1) of this section. 256
(E) "Retail sale" and "sales at retail" include all sales 258
except those in which the purpose of the consumer is: 259
(1) To resell the thing transferred or benefit of the 261
service provided, by a person engaging in business, in the form 262
in which the same is, or is to be, received by the person; 263
(2) To incorporate the thing transferred as a material or 265
a part, into tangible personal property to be produced for sale 266
by manufacturing, assembling, processing, or refining, or to use 267
or consume the thing transferred directly in producing a product 268
for sale by mining, including without limitation the extraction 270
from the earth of all substances which are classed geologically 271
as minerals, production of crude oil and natural gas, farming, 272
agriculture, horticulture, or floriculture, and persons engaged 273
in rendering farming, agricultural, horticultural, or 274
floricultural services, and services in the exploration for, and 275
production of, crude oil and natural gas, for others are deemed 276
engaged directly in farming, agriculture, horticulture, and 277
floriculture, or exploration for, and production of, crude oil 278
and natural gas; directly in the rendition of a public utility 279
service, except that the sales tax levied by section 5739.02 of 280
the Revised Code shall be collected upon all meals, drinks, and 281
food for human consumption sold upon Pullman and railroad 282
coaches. This paragraph does not exempt or except from "retail 283
sale" or "sales at retail" the sale of tangible personal property 284
that is to be incorporated into a structure or improvement to 285
real property.
(3) To hold the thing transferred as security for the 287
performance of an obligation of the vendor; 288
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(4) To use or consume the thing transferred in the process 290
of reclamation as required by Chapters 1513. and 1514. of the 291
Revised Code; 292
(5) To resell, hold, use, or consume the thing transferred 294
as evidence of a contract of insurance; 295
(6) To use or consume the thing directly in commercial 297
fishing; 298
(7) To incorporate the thing transferred as a material or 300
a part into, or to use or consume the thing transferred directly 301
in the production of, magazines distributed as controlled 302
circulation publications; 303
(8) To use or consume the thing transferred in the 305
production and preparation in suitable condition for market and 306
sale of printed, imprinted, overprinted, lithographic, 307
multilithic, blueprinted, photostatic, or other productions or 308
reproductions of written or graphic matter; 309
(9) To use the thing transferred, as described in section 311
5739.011 of the Revised Code, primarily in a manufacturing 312
operation to produce tangible personal property for sale; 313
(10) To use the benefit of a warranty, maintenance or 315
service contract, or similar agreement, as defined in division 316
(B)(7) of this section, to repair or maintain tangible personal 317
property, if all of the property that is the subject of the 318
warranty, contract, or agreement would be exempt on its purchase 319
from the tax imposed by section 5739.02 of the Revised Code; 320
(11) To use the thing transferred as qualified research 322
and development equipment; 323
(12) To use or consume the thing transferred primarily in 325
storing, transporting, mailing, or otherwise handling purchased 326
sales inventory in a warehouse, distribution center, or similar 327
facility when the inventory is primarily distributed outside this 328
state to retail stores of the person who owns or controls the 329
warehouse, distribution center, or similar facility, to retail 330
stores of an affiliated group of which that person is a member, 331
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or by means of direct marketing. Division (E)(12) of this 332
section does not apply to motor vehicles registered for operation 333
on the public highways. As used in division (E)(12) of this 334
section, "affiliated group" has the same meaning as in division 335
(B)(3)(e) of this section and "direct marketing" has the same 336
meaning as in division (B)(37) of section 5739.02 of the Revised 337
Code. 338
(13) To use or consume the thing transferred to fulfill a 340
contractual obligation incurred by a warrantor pursuant to a 341
warranty provided as a part of the price of the tangible personal 342
property sold or by a vendor of a warranty, maintenance or 343
service contract, or similar agreement the provision of which is 344
defined as a sale under division (B)(7) of this section; 345
(14) To use or consume the thing transferred in the 347
production of a newspaper for distribution to the public; 348
(15) To use tangible personal property to perform a 350
service listed in division (B)(3) of this section, if the 351
property is or is to be permanently transferred to the consumer 352
of the service as an integral part of the performance of the 353
service.
As used in division (E) of this section, "thing" includes 355
all transactions included in divisions (B)(3)(a), (b), and (e) of 357
this section.
Sales conducted through a coin-operated device that 359
activates vacuum equipment or equipment that dispenses water, 360
whether or not in combination with soap or other cleaning agents 361
or wax, to the consumer for the consumer's use on the premises in 363
washing, cleaning, or waxing a motor vehicle, provided no other
personal property or personal service is provided as part of the 364
transaction, are not retail sales or sales at retail. 365
(F) "Business" includes any activity engaged in by any 367
person with the object of gain, benefit, or advantage, either 368
direct or indirect. "Business" does not include the activity of 369
a person in managing and investing the person's own funds. 370
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(G) "Engaging in business" means commencing, conducting, 372
or continuing in business, and liquidating a business when the 373
liquidator thereof holds self out to the public as conducting 375
such business. Making a casual sale is not engaging in business.
(H)(1) "Price," except as provided in divisions (H)(2) and 377
(3) of this section, means the aggregate value in money of 378
anything paid or delivered, or promised to be paid or delivered, 379
in the complete performance of a retail sale, without any 380
deduction on account of the cost of the property sold, cost of 381
materials used, labor or service cost, interest, discount paid or 382
allowed after the sale is consummated, or any other expense. If 383
the retail sale consists of the rental or lease of tangible 384
personal property, "price" means the aggregate value in money of 385
anything paid or delivered, or promised to be paid or delivered, 386
in the complete performance of the rental or lease, without any 387
deduction for tax, interest, labor or service charge, damage 388
liability waiver, termination or damage charge, discount paid or 389
allowed after the lease is consummated, or any other expense. The 391
sales tax shall be calculated and collected by the lessor on each 392
payment made by the lessee. Price does not include the
consideration received as a deposit refundable to the consumer 393
upon return of a beverage container, the consideration received 394
as a deposit on a carton or case that is used for such returnable 395
containers, or the consideration received as a refundable 396
security deposit for the use of tangible personal property to the 397
extent that it actually is refunded, if the consideration for 398
such refundable deposit is separately stated from the 399
consideration received or to be received for the tangible 400
personal property transferred in the retail sale. Such 401
separation must appear in the sales agreement or on the initial 402
invoice or initial billing rendered by the vendor to the 403
consumer. Price is the amount received inclusive of the tax, 404
provided the vendor establishes to the satisfaction of the tax 405
commissioner that the tax was added to the price. When the price 406
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includes both a charge for tangible personal property and a 407
charge for providing a service and the sale of the property and 408
the charge for the service are separately taxable, or have a 409
separately determinable tax status, the price shall be separately 410
stated for each such charge so the tax can be correctly computed 411
and charged. 412
The tax collected by the vendor from the consumer under 414
this chapter is not part of the price, but is a tax collection 415
for the benefit of the state and of counties levying an 416
additional sales tax pursuant to section 5739.021 or 5739.026 of 417
the Revised Code and of transit authorities levying an additional 418
sales tax pursuant to section 5739.023 of the Revised Code. 419
Except for the discount authorized in section 5739.12 of the 420
Revised Code, no person other than the state or such a county or 421
transit authority shall derive any benefit from the collection or 422
payment of such tax. 423
(2) In the case of a sale of any new motor vehicle by a 425
new motor vehicle dealer, as defined in section 4517.01 of the 426
Revised Code, in which another motor vehicle is accepted by the 427
dealer as part of the consideration received, "price" has the 428
same meaning as in division (H)(1) of this section, reduced by 429
the credit afforded the consumer by the dealer for the motor 430
vehicle received in trade. 431
(3) In the case of a sale of any watercraft or outboard 433
motor by a watercraft dealer licensed in accordance with section 434
1547.543 of the Revised Code, in which another watercraft, 435
watercraft and trailer, or outboard motor is accepted by the 436
dealer as part of the consideration received, "price" has the 437
same meaning as in division (H)(1) of this section, reduced by 438
the credit afforded the consumer by the dealer for the 439
watercraft, watercraft and trailer, or outboard motor received in 440
trade. As used in division (H)(3) of this section, "watercraft" 441
includes an outdrive unit attached to the watercraft. 442
(I) "Receipts" means the total amount of the prices of the 444
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sales of vendors, provided that cash discounts allowed and taken 445
on sales at the time they are consummated are not included, minus 446
any amount deducted as a bad debt pursuant to section 5739.121 of 447
the Revised Code. "Receipts" does not include the sale price of 448
property returned or services rejected by consumers when the full 449
sale price and tax are refunded either in cash or by credit. 450
(J) "Place of business" means any location at which a 452
person engages in business. 453
(K) "Premises" includes any real property or portion 455
thereof upon which any person engages in selling tangible 456
personal property at retail or making retail sales and also 457
includes any real property or portion thereof designated for, or 458
devoted to, use in conjunction with the business engaged in by 459
such person. 460
(L) "Casual sale" means a sale of an item of tangible 462
personal property which was obtained by the person making the 463
sale, through purchase or otherwise, for the person's own use in 464
this state and which was previously subject to the state's taxing 465
jurisdiction on its sale or use, and includes such items acquired 466
for the seller's use which are sold by an auctioneer employed 467
directly by the person for such purpose, provided the location of 468
such sales is not the auctioneer's permanent place of business. 469
As used in this division, "permanent place of business" includes 470
any location where such auctioneer has conducted more than two 471
auctions during the year. 472
(M) "Hotel" means every establishment kept, used, 474
maintained, advertised or held out to the public to be a place 475
where sleeping accommodations are offered to guests, in which 476
five or more rooms are used for the accommodation of such guests, 477
whether such rooms are in one or several structures. 478
(N) "Transient guests" means persons occupying a room or 480
rooms for sleeping accommodations for less than thirty 481
consecutive days. 482
(O) "Making retail sales" means the effecting of 484
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transactions wherein one party is obligated to pay the price and 485
the other party is obligated to provide a service or to transfer 486
title to or possession of the item sold. "Making retail sales" 487
does not include the preliminary acts of promoting or soliciting 488
the retail sales, other than the distribution of printed matter 489
which displays or describes and prices the item offered for sale, 490
nor does it include delivery of a predetermined quantity of 491
tangible personal property or transportation of property or 492
personnel to or from a place where a service is performed, 493
regardless of whether the vendor is a delivery vendor. 494
(P) "Used directly in the rendition of a public utility 496
service" means that property which is to be incorporated into and 497
will become a part of the consumer's production, transmission, 498
transportation, or distribution system and which retains its 499
classification as tangible personal property after such 500
incorporation; fuel or power used in the production, 501
transmission, transportation, or distribution system; and 502
tangible personal property used in the repair and maintenance of 503
the production, transmission, transportation, or distribution 504
system, including only such motor vehicles as are specially 505
designed and equipped for such use. Tangible personal property 506
and services used primarily in providing highway transportation 507
for hire are not used in providing a public utility service as 508
defined in this division. 509
(Q) "Refining" means removing or separating a desirable 511
product from raw or contaminated materials by distillation or 512
physical, mechanical, or chemical processes. 513
(R) "Assembly" and "assembling" mean attaching or fitting 515
together parts to form a product, but do not include packaging a 516
product. 517
(S) "Manufacturing operation" means a process in which 519
materials are changed, converted, or transformed into a different 520
state or form from which they previously existed and includes 521
refining materials, assembling parts, and preparing raw materials 522
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and parts by mixing, measuring, blending, or otherwise committing 523
such materials or parts to the manufacturing process. 524
"Manufacturing operation" does not include packaging. 525
(T) "Fiscal officer" means, with respect to a regional 527
transit authority, the secretary-treasurer thereof, and with 528
respect to a county which is a transit authority, the fiscal 529
officer of the county transit board if one is appointed pursuant 530
to section 306.03 of the Revised Code or the county auditor if 531
the board of county commissioners operates the county transit 532
system.
(U) "Transit authority" means a regional transit authority 534
created pursuant to section 306.31 of the Revised Code or a 535
county in which a county transit system is created pursuant to 536
section 306.01 of the Revised Code. For the purposes of this 537
chapter, a transit authority must extend to at least the entire 538
area of a single county. A transit authority which includes 539
territory in more than one county must include all the area of 540
the most populous county which is a part of such transit 541
authority. County population shall be measured by the most 542
recent census taken by the United States census bureau. 543
(V) "Legislative authority" means, with respect to a 545
regional transit authority, the board of trustees thereof, and 546
with respect to a county which is a transit authority, the board 547
of county commissioners. 548
(W) "Territory of the transit authority" means all of the 550
area included within the territorial boundaries of a transit 551
authority as they from time to time exist. Such territorial 552
boundaries must at all times include all the area of a single 553
county or all the area of the most populous county which is a 554
part of such transit authority. County population shall be 555
measured by the most recent census taken by the United States 556
census bureau. 557
(X) "Providing a service" means providing or furnishing 559
anything described in division (B)(3) of this section for 560
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consideration. 561
(Y)(1)(a) "Automatic data processing" means processing of 563
others' data, including keypunching or similar data entry 564
services together with verification thereof, or providing access 565
to computer equipment for the purpose of processing data. 566
(b) "Computer services" means providing services 568
consisting of specifying computer hardware configurations and 569
evaluating technical processing characteristics, computer 570
programming, and training of computer programmers and operators, 571
provided in conjunction with and to support the sale, lease, or 572
operation of taxable computer equipment or systems. 573
(c) "Electronic information services" means providing 575
access to computer equipment by means of telecommunications 576
equipment for the purpose of either of the following: 577
(i) Examining or acquiring data stored in or accessible to 579
the computer equipment; 580
(ii) Placing data into the computer equipment to be 582
retrieved by designated recipients with access to the computer 583
equipment. 584
(d) "Automatic data processing, computer services, or 586
electronic information services" shall not include personal or 587
professional services. 588
(2) As used in divisions (B)(3)(e) and (Y)(1) of this 590
section, "personal and professional services" means all services 591
other than automatic data processing, computer services, or 592
electronic information services, including but not limited to: 593
(a) Accounting and legal services such as advice on tax 595
matters, asset management, budgetary matters, quality control, 596
information security, and auditing and any other situation where 597
the service provider receives data or information and studies, 598
alters, analyzes, interprets, or adjusts such material; 599
(b) Analyzing business policies and procedures; 601
(c) Identifying management information needs; 603
(d) Feasibility studies including economic and technical 605
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analysis of existing or potential computer hardware or software 606
needs and alternatives; 607
(e) Designing policies, procedures, and custom software 609
for collecting business information, and determining how data 610
should be summarized, sequenced, formatted, processed, controlled 611
and reported so that it will be meaningful to management; 612
(f) Developing policies and procedures that document how 614
business events and transactions are to be authorized, executed, 615
and controlled; 616
(g) Testing of business procedures; 618
(h) Training personnel in business procedure applications; 620
(i) Providing credit information to users of such 622
information by a consumer reporting agency, as defined in the 623
"Fair Credit Reporting Act," 84 Stat. 1114, 1129 (1970), 15 624
U.S.C. 1681a(f), or as hereafter amended, including but not 625
limited to gathering, organizing, analyzing, recording, and 626
furnishing such information by any oral, written, graphic, or 627
electronic medium; 628
(j) Providing debt collection services by any oral, 630
written, graphic, or electronic means. 631
The services listed in divisions (Y)(2)(a) to (j) of this 633
section are not automatic data processing or computer services. 634
(Z) "Highway transportation for hire" means the 636
transportation of personal property belonging to others for 637
consideration by any of the following: 638
(1) The holder of a permit or certificate issued by this 640
state or the United States authorizing the holder to engage in 641
transportation of personal property belonging to others for 642
consideration over or on highways, roadways, streets, or any 643
similar public thoroughfare; 644
(2) A person who engages in the transportation of personal 646
property belonging to others for consideration over or on 647
highways, roadways, streets, or any similar public thoroughfare 648
but who could not have engaged in such transportation on December 649
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11, 1985, unless the person was the holder of a permit or 650
certificate of the types described in division (Z)(1) of this 651
section;
(3) A person who leases a motor vehicle to and operates it 653
for a person described by division (Z)(1) or (2) of this section. 654
(AA) "Telecommunications service" means the transmission 656
of any interactive, two-way electromagnetic communications, 657
including voice, image, data, and information, through the use of 658
any medium such as wires, cables, microwaves, cellular radio, 659
radio waves, light waves, or any combination of those or similar 660
media. "Telecommunications service" includes message toll 661
service even though the vendor provides the message toll service 662
by means of wide area transmission type service or private 663
communications service purchased from another telecommunications 664
service provider, but does not include any of the following: 665
(1) Sales of incoming or outgoing wide area transmission 667
service or wide area transmission type service, including eight 668
hundred or eight-hundred-type service, to the person contracting 669
for the receipt of that service; 670
(2) Sales of private communications service to the person 672
contracting for the receipt of that service that entitles the 673
purchaser to exclusive or priority use of a communications 674
channel or group of channels between exchanges; 675
(3) Sales of telecommunications service by companies 677
subject to the excise tax imposed by Chapter 5727. of the Revised 678
Code; 679
(4) Sales of telecommunications service to a provider of 681
telecommunications service, including access services, for use in 682
providing telecommunications service; 683
(5) Value-added nonvoice services in which computer 685
processing applications are used to act on the form, content, 686
code, or protocol of the information to be transmitted; 687
(6) Transmission of interactive video programming by a 689
cable television system as defined in section 505.90 of the 690
18
Revised Code. 691
(BB) "Industrial laundry cleaning services" means removing 693
soil or dirt from or supplying towels, linens, or articles of 694
clothing that belong to others and are used in a trade or 695
business. 696
(CC) "Magazines distributed as controlled circulation 698
publications" means magazines containing at least twenty-four 699
pages, at least twenty-five per cent editorial content, issued at 700
regular intervals four or more times a year, and circulated 701
without charge to the recipient, provided that such magazines are 702
not owned or controlled by individuals or business concerns which 703
conduct such publications as an auxiliary to, and essentially for 704
the advancement of the main business or calling of, those who own 705
or control them. 706
(DD) "Landscaping and lawn care service" means the 708
services of planting, seeding, sodding, removing, cutting, 709
trimming, pruning, mulching, aerating, applying chemicals, 710
watering, fertilizing, and providing similar services to 711
establish, promote, or control the growth of trees, shrubs, 712
flowers, grass, ground cover, and other flora, or otherwise 713
maintaining a lawn or landscape grown or maintained by the owner 714
for ornamentation or other nonagricultural purpose. However, 715
"landscaping and lawn care service" does not include the 716
providing of such services by a person who has less than five 717
thousand dollars in sales of such services during the calendar 718
year. 719
(EE) "Private investigation and security service" means 721
the performance of any activity for which the provider of such 722
service is required to be licensed pursuant to Chapter 4749. of 723
the Revised Code, or would be required to be so licensed in 724
performing such services in this state, and also includes the 725
services of conducting polygraph examinations and of monitoring 726
or overseeing the activities on or in, or the condition of, the 727
consumer's home, business, or other facility by means of 728
19
electronic or similar monitoring devices. "Private investigation 729
and security service" does not include special duty services 730
provided by off-duty police officers, deputy sheriffs, and other 731
peace officers regularly employed by the state or a political 732
subdivision. 733
(FF) "Information services" means providing conversation, 735
giving consultation or advice, playing or making a voice or other 736
recording, making or keeping a record of the number of callers, 737
and any other service provided to a consumer by means of a nine 738
hundred telephone call, except when the nine hundred telephone 739
call is the means by which the consumer makes a contribution to a 740
recognized charity. 741
(GG) "Research and development" means designing, creating, 743
or formulating new or enhanced products, equipment, or 744
manufacturing processes, and conducting scientific or 745
technological inquiry and experimentation in the physical 746
sciences with the goal of increasing scientific knowledge which 747
may reveal the bases for new or enhanced products, equipment, or 748
manufacturing processes. 749
(HH) "Qualified research and development equipment" means 751
capitalized tangible personal property, and leased personal 752
property that would be capitalized if purchased, used by a person 753
primarily to perform research and development. Tangible personal 754
property primarily used in testing, as defined in division (A)(4) 755
of section 5739.011 of the Revised Code, or used for recording or 756
storing test results, is not qualified research and development 757
equipment unless such property is primarily used by the consumer 758
in testing the product, equipment, or manufacturing process being 759
created, designed, or formulated by the consumer in the research 760
and development activity or in recording or storing such test 761
results. 762
(II) "Building maintenance and janitorial service" means 764
cleaning the interior or exterior of a building and any tangible 765
personal property located therein or thereon, including any 766
20
services incidental to such cleaning for which no separate charge 767
is made. However, "building maintenance and janitorial service" 768
does not include the providing of such service by a person who 769
has less than five thousand dollars in sales of such service 770
during the calendar year. 771
(JJ) "Employment service" means providing or supplying 773
personnel, on a temporary or long-term basis, to perform work or 774
labor under the supervision or control of another, when the 775
personnel so supplied receive their wages, salary, or other 776
compensation from the provider of the service. "Employment 777
service" does not include: 778
(1) Acting as a contractor or subcontractor, where the 780
personnel performing the work are not under the direct control of 781
the purchaser. 782
(2) Medical and health care services. 784
(3) Supplying personnel to a purchaser pursuant to a 786
contract of at least one year between the service provider and 787
the purchaser that specifies that each employee covered under the 788
contract is assigned to the purchaser on a permanent basis. 789
(4) Transactions between members of an affiliated group, 791
as defined in division (B)(3)(e) of this section. 792
(KK) "Employment placement service" means locating or 794
finding employment for a person or finding or locating an 795
employee to fill an available position. 796
(LL) "Exterminating service" means eradicating or 798
attempting to eradicate vermin infestations from a building or 799
structure, or the area surrounding a building or structure, and 800
includes activities to inspect, detect, or prevent vermin 801
infestation of a building or structure. 802
(MM) "Physical fitness facility service" means all 804
transactions by which a membership is granted, maintained, or 805
renewed, including initiation fees, membership dues, renewal 806
fees, monthly minimum fees, and other similar fees and dues, by a 807
physical fitness facility such as an athletic club, health spa, 808
21
or gymnasium, which entitles the member to use the facility for 809
physical exercise. 810
(NN) "Recreation and sports club service" means all 812
transactions by which a membership is granted, maintained, or 813
renewed, including initiation fees, membership dues, renewal 814
fees, monthly minimum fees, and other similar fees and dues, by a 815
recreation and sports club, which entitles the member to use the 816
facilities of the organization. "Recreation and sports club" 817
means an organization that has ownership of, or controls or 818
leases on a continuing, long-term basis, the facilities used by 819
its members and includes an aviation club, gun or shooting club, 820
yacht club, card club, swimming club, tennis club, golf club, 821
country club, riding club, amateur sports club, or similar 822
organization. 823
(OO) "Livestock" means farm animals commonly raised for 825
food or food production, and includes but is not limited to 826
cattle, sheep, goats, swine, and poultry. "Livestock" does not 827
include invertebrates, fish, amphibians, reptiles, horses, 828
domestic pets, animals for use in laboratories or for exhibition, 829
or other animals not commonly raised for food or food production. 830
(PP) "Livestock structure" means a building or structure 832
used exclusively for the housing, raising, feeding, or sheltering 833
of livestock, and includes feed storage or handling structures 834
and structures for livestock waste handling. 835
(QQ) "Horticulture" means the growing, cultivation, and 837
production of flowers, fruits, herbs, vegetables, sod, mushrooms, 838
and nursery stock. As used in this division, "nursery stock" has 839
the same meaning as in section 927.51 of the Revised Code. 840
(RR) "Horticulture structure" means a building or 842
structure used exclusively for the commercial growing, raising, 843
or overwintering of horticultural products, and includes the area 844
used for stocking, storing, and packing horticultural products 845
when done in conjunction with the production of those products. 846
(SS) "Newspaper" means an unbound publication bearing a 848
22
title or name that is regularly published, at least as frequently 849
as biweekly, and distributed from a fixed place of business to 850
the public in a specific geographic area, and that contains a 851
substantial amount of news matter of international, national, or 852
local events of interest to the general public.
(TT) "Professional racing team" means a person that 855
employs at least twenty full-time employees for the purpose of 856
conducting a motor vehicle racing business for profit. The 857
person must conduct the business with the purpose of racing one 858
or more motor racing vehicles in at least ten competitive 859
professional racing events each year that comprise all or part of 860
a motor racing series sanctioned by one or more motor racing 861
sanctioning organizations. A "motor racing vehicle" means a 862
vehicle for which the chassis, engine, and parts are designed 863
exclusively for motor racing, and does not include a stock or 865
production model vehicle that may be modified for use in racing. 866
For the purposes of this division:
(1) A "competitive professional racing event" is a motor 868
vehicle racing event sanctioned by one or more motor racing 869
sanctioning organizations, at which aggregate cash prizes in 870
excess of eight hundred thousand dollars are awarded to the 872
competitors.
(2) "Full-time employee" means an individual who is 874
employed for consideration for thirty-five or more hours a week, 875
or who renders any other standard of service generally accepted 876
by custom or specified by contract as full-time employment. 878
(UU)(1) "PREPAID AUTHORIZATION NUMBER" MEANS A NUMERIC OR 881
ALPHANUMERIC COMBINATION THAT REPRESENTS A PREPAID ACCOUNT THAT 882
CAN BE USED BY THE ACCOUNT HOLDER SOLELY TO OBTAIN 883
TELECOMMUNICATIONS SERVICE, AND INCLUDES ANY RENEWALS OR 884
INCREASES IN THE PREPAID ACCOUNT. 885
(2) "PREPAID TELEPHONE CALLING CARD" MEANS A TANGIBLE ITEM 888
THAT CONTAINS A PREPAID AUTHORIZATION NUMBER THAT CAN BE USED 889
SOLELY TO OBTAIN TELECOMMUNICATIONS SERVICE, AND INCLUDES ANY 890
23
RENEWALS OR INCREASES IN THE PREPAID ACCOUNT.
Sec. 5739.033. The amount of tax due pursuant to sections 899
5739.02, 5739.021, 5739.023, and 5739.026 of the Revised Code is 900
the sum of the taxes imposed pursuant to those sections at the 901
situs of the consummation of the sale as determined under this 902
section. 903
(A) Except as otherwise provided in this section and 905
division (C) of section 5739.031 of the Revised Code, all sales 906
are conclusively determined to be consummated at the vendor's 907
place of business. 908
(1) If the consumer or the consumer's agent takes 910
possession of the tangible personal property at a place of 911
business of the vendor where the purchase contract or agreement 912
was made, the sale is consummated at that place of business. 913
(2) If the consumer or the consumer's agent takes 915
possession of the tangible personal property other than at a 916
place of business of the vendor, or takes possession at a 917
warehouse or similar facility of the vendor, the sale is 918
consummated at the vendor's place of business where the purchase 919
contract or agreement was made or the purchase order was 920
received.
(3) If the vendor provides a service specified in division 922
(B)(3)(a), (b), (c), (d), (n), or (o) of section 5739.01 of the 924
Revised Code, the sale is consummated at the vendor's place of 925
business where the service is performed or the contract or 926
agreement for the service was made or the purchase order was 927
received.
(B) If the vendor is a transient vendor as specified in 929
division (B) of section 5739.17 of the Revised Code, the sale is 930
conclusively determined to be consummated at the vendor's 931
temporary place of business or, if the transient vendor is the 932
lessor of titled motor vehicles, titled watercraft, or titled 933
outboard motors, at the location where the lessee keeps the 934
leased property. 935
24
(C) If the vendor is a limited vendor as specified in 937
division (B) of section 5739.17 of the Revised Code, the sale is 938
conclusively determined to be consummated at the temporary event 939
at which the vendor is making sales. 940
(D) If the vendor makes sales of tangible personal 942
property from a stock of goods carried in a motor vehicle, from 943
which the purchaser makes selection and takes possession, or from 944
which the vendor sells tangible personal property the quantity of 945
which has not been determined prior to the time the purchaser 946
takes possession, the sale is conclusively determined to be 947
consummated at the location of the motor vehicle when the sale is 948
made. 949
(E) If the vendor is a delivery vendor as specified in 951
division (D) of section 5739.17 of the Revised Code, the sale is 952
conclusively determined to be consummated at the place where the 953
tangible personal property is delivered, where the leased 954
property is used, or where the service is performed or received. 955
(F) If the vendor provides a service specified in division 957
(B)(3)(e), (g), (h), (j), (k), (l), or (m) of section 5739.01 of 959
the Revised Code, the sale is conclusively determined to be 960
consummated at the location of the consumer where the service is 961
performed or received. 962
(G) If EXCEPT AS PROVIDED IN DIVISION (J) OF THIS SECTION, 964
IF the vendor provides a service specified in division (B)(3)(f) 966
or (i) of section 5739.01 of the Revised Code, the sale is 967
conclusively determined to be consummated at the location of the 968
telephone number or account as reflected in the records of the 969
vendor. If, in the case of a telecommunications service, the
telephone number or account is located outside this state, the 970
sale is conclusively determined to be consummated at the location 971
in this state from which the service originated. 972
(H) If the vendor provides lodging to transient guests as 974
specified in division (B)(2) of section 5739.01 of the Revised 975
Code, the sale is conclusively determined to be consummated at 976
25
the location where the lodging is located. 977
(I) If the vendor sells a warranty, maintenance or service 979
contract, or similar agreement as specified in division (B)(7) of 980
section 5739.01 of the Revised Code and the vendor is a delivery 981
vendor, the sale is conclusively determined to be consummated at 982
the location of the consumer. If the vendor is not a delivery 983
vendor, the sale is conclusively determined to be consummated at 984
the vendor's place of business where the contract or agreement 985
was made, unless the warranty or contract is a component of the 986
sale of a titled motor vehicle, titled watercraft, or titled 987
outboard motor, in which case the sale is conclusively determined 988
to be consummated in the county of titling. 989
(J) EXCEPT AS OTHERWISE PROVIDED IN THIS DIVISION, IF THE 991
VENDOR SELLS A PREPAID AUTHORIZATION NUMBER OR A PREPAID 992
TELEPHONE CALLING CARD, THE SALE IS CONCLUSIVELY DETERMINED TO BE 994
CONSUMMATED AT THE VENDOR'S PLACE OF BUSINESS AND SHALL BE TAXED 995
AT THE TIME OF SALE. IF THE VENDOR SELLS A PREPAID AUTHORIZATION 996
NUMBER OR PREPAID TELEPHONE CALLING CARD THROUGH A TELEPHONE 997
CALL, ELECTRONIC COMMERCE, OR ANY OTHER FORM OF REMOTE COMMERCE, 998
THE SALE IS CONCLUSIVELY DETERMINED TO BE MADE AT THE CONSUMER'S 999
SHIPPING ADDRESS, OR, IF THERE IS NO ITEM SHIPPED, AT THE 1,000
CONSUMER'S BILLING ADDRESS.
Section 2. That existing sections 5739.01 and 5739.033 of 1,002
the Revised Code are hereby repealed. 1,003
Section 3. Sections 1 and 2 of this act shall take effect 1,005
January 1, 2000.