As Introduced 1
123rd General Assembly 4
Regular Session S. B. No. 67 5
1999-2000 6
SENATORS HOTTINGER-FINAN-WACHTMANN-BRADY-DiDONATO-PRENTISS- 8
SCHAFRATH-WHITE-OELSLAGER 9
_________________________________________________________________ 11
A B I L L
To amend sections 324.01, 718.01, 5701.08, 5709.08, 13
5709.10, 5709.11, 5709.12, 5709.121, 5733.01, 14
5739.01, and 5739.02 and to enact sections 15
1771.01 to 1771.11 of the Revised Code to provide 16
for fair competition in the provision of cable 17
television services by establishing conditions 18
under which governmental cable operators may be 19
formed, including the franchising of those 20
operators by the Public Utilities Commission, and 21
by taxing such operators in the manner of private 22
cable operators. 23
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 25
Section 1. That sections 324.01, 718.01, 5701.08, 5709.08, 28
5709.10, 5709.11, 5709.12, 5709.121, 5733.01, 5739.01, and 29
5739.02 be amended and sections 1771.01, 1771.02, 1771.03,
1771.04, 1771.05, 1771.06, 1771.07, 1771.08, 1771.09, 1771.10, 30
and 1771.11 of the Revised Code be enacted to read as follows: 31
Sec. 324.01. As used in sections 324.01 to 324.12 of the 40
Revised Code: 41
(A) "Utility" means: 43
(1) An electric company, gas company, heating company, 45
cooling company, telephone company, telegraph company, or 46
communications company supplying a utility service; 47
(2) Any municipal corporation, county, or other political 49
subdivision, instrumentality, or agency of the state supplying a 50
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utility service; 51
(3) Any individual, firm, partnership, association, trust, 53
joint-stock company, joint venture, corporation, nonprofit 54
corporation, cooperative, receiver, assignee, trustee in 55
bankruptcy, estate, trustee, or organization of any kind which 56
owns or operates any office building, storeroom building, 57
shopping center, apartment building, apartment hotel, 58
condominium, or other multiple business or dwelling unit, and 59
which sells, furnishes, or delivers a utility service to the 60
tenants or occupants thereof, provided the charge for such 61
utility service is separately stated. 62
(B) Any individual, firm, partnership, association, trust, 64
joint-stock company, joint venture, corporation, municipal 65
corporation, county, or other political subdivision, 66
instrumentality, or agency of the state, nonprofit corporation, 67
cooperative, receiver, assignee, trustee in bankruptcy, estate, 68
trustee, or organization of any kind: 69
(1) Is an electric company when supplying electricity for 71
light, heat, cooling, or power purposes to customers within a 72
county levying a utilities service tax; 73
(2) Is a gas company when supplying artificial gas or 75
natural gas for light, heat, cooling, or power purposes to 76
customers within a county levying a utilities service tax; 77
(3) Is a heating company when supplying water, steam, or 79
air through pipes or tubing for heating purposes to customers 80
within a county levying a utilities service tax; 81
(4) Is a cooling company when supplying water, steam, or 83
air through pipes or tubing for cooling purposes to customers 84
within a county levying a utilities service tax; 85
(5) Is a telephone company when transmitting telephonic 87
messages to, from, or within a county levying a utilities service 88
tax; 89
(6) Is a telegraph company when transmitting telegraphic 91
messages to, from, or within a county levying a utilities service 92
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tax; 93
(7) Is a communications company when supplying the 95
services described in section 4931.11 of the Revised Code, other 96
than transmitting telephonic or telegraphic messages, to, from, 97
or within a county levying a utilities service tax. 98
(C) "Utility service" means the supplying of water, steam, 100
or air through pipes or tubing for heating or cooling purposes to 101
customers within the county, the supplying of electricity, 102
artificial gas, or natural gas to customers within the county, 103
and the transmission of telephonic or telegraphic messages or the 104
supplying of any of the services described in section 4931.11 of 105
the Revised Code when the transmission or supplying originates 106
from and is charged to or is received by and charged to a 107
customer within the county. 108
(D) "Charge for utility service" means the amount charged 110
to the customer for a utility service without deduction for any 111
discount for early payment but after deducting the amount of any 112
federal excise tax on such utility service, and excluding the 113
amount paid for the purchase of appliances or other merchandise, 114
and the amount paid for the installation of pipes, meters, poles, 115
apparatus, instruments, switchboards, and other facilities by the 116
utility for the purpose of rendering utility service to the 117
customer if the charge therefor is separately stated by the 118
utility in its bill to the customer and is not included in the 119
basic rates charged to customers of the utility. 120
(E) "Customer" means any individual, firm, partnership, 122
association, trust, joint-stock company, joint venture, 123
corporation, nonprofit corporation, cooperative, receiver, 124
assignee, trustee in bankruptcy, estate, trustee, or organization 125
of any kind receiving utility service from a utility, but does 126
not include the United States, the state, any political 127
subdivision of the state, or any agency or instrumentality of any 128
of them. 129
(F) "Business" has the same meaning as in division (E) of 131
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section 5701.08 of the Revised Code. 132
Sec. 718.01. (A) As used in this chapter: 141
(1) "Internal Revenue Code" means the Internal Revenue 143
Code of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended. 144
(2) "Schedule C" means internal revenue service schedule C 146
filed by a taxpayer pursuant to the Internal Revenue Code. 147
(3) "Form 2106" means internal revenue service form 2106 149
filed by a taxpayer pursuant to the Internal Revenue Code. 150
(4) "Intangible income" means income of any of the 152
following types: income yield, interest, dividends, or other 153
income arising from the ownership, sale, exchange, or other 154
disposition of intangible property including, but not limited to, 155
investments, deposits, money, or credits as those terms are
defined in Chapter 5701. of the Revised Code. 156
(B) No municipal corporation with respect to that income 158
which it may tax shall tax such income at other than a uniform 159
rate.
(C) No municipal corporation shall levy a tax on income at 161
a rate in excess of one per cent without having obtained the 162
approval of the excess by a majority of the electors of the 163
municipality voting on the question at a general, primary, or 164
special election. The legislative authority of the municipal 165
corporation shall file with the board of elections at least
seventy-five days before the day of the election a copy of the 166
ordinance together with a resolution specifying the date the 167
election is to be held and directing the board of elections to 168
conduct the election. The ballot shall be in the following form: 169
"Shall the Ordinance providing for a... per cent levy on income 170
for (Brief description of the purpose of the proposed levy) be
passed? 171
FOR THE INCOME TAX 173
AGAINST THE INCOME TAX" 175
In the event of an affirmative vote, the proceeds of the 177
levy may be used only for the specified purpose. 178
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(D)(1) Except as otherwise provided in division (D)(2) of 180
this section, no municipal corporation shall exempt from a tax on 181
income, compensation for personal services of individuals over 182
eighteen years of age or the net profit from a business or 183
profession, INCLUDING THE NET PROFIT OF A CABLE OPERATOR OR A 184
GOVERNMENTAL CABLE OPERATOR AS THOSE TERMS ARE DEFINED IN SECTION 185
1771.01 OF THE REVISED CODE.
(2) The legislative authority of a municipal corporation 187
may, by ordinance or resolution, MAY exempt from a tax on income 189
any compensation arising from the grant, sale, exchange, or other 191
disposition of a stock option; the exercise of a stock option; or 192
the sale, exchange, or other disposition of stock purchased under 193
a stock option.
(E) Nothing in this section shall prevent a municipal 195
corporation from permitting lawful deductions as prescribed by 196
ordinance. If a taxpayer's taxable income includes income 197
against which the taxpayer has taken a deduction for federal 198
income tax purposes as reportable on the taxpayer's form 2106, 199
and against which a like deduction has not been allowed by the
municipal corporation, the municipal corporation shall deduct 200
from the taxpayer's taxable income an amount equal to the 201
deduction shown on such form allowable against such income, to 202
the extent not otherwise so allowed as a deduction by the 203
municipal corporation. In the case of a taxpayer who has a net
profit from a business or profession that is operated as a sole 204
proprietorship, no municipal corporation may tax or use as the 205
base for determining the amount of the net profit that shall be 206
considered as having a taxable situs in the municipal 207
corporation, a greater amount than the net profit reported by the
taxpayer on schedule C filed in reference to the year in question 208
as taxable income from such sole proprietorship, except as 209
otherwise specifically provided by ordinance or regulation. 210
(F) No municipal corporation shall tax any of the 212
following:
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(1) The military pay or allowances of members of the armed 214
forces of the United States and of members of their reserve 215
components, including the Ohio national guard; 216
(2) The income of religious, fraternal, charitable, 218
scientific, literary, or educational institutions to the extent 219
that such income is derived from tax-exempt real estate, 220
tax-exempt tangible or intangible property, or tax-exempt 221
activities;
(3) Except as otherwise provided in division (G) of this 223
section, intangible income; 224
(4) Compensation paid under section 3501.28 or 3501.36 of 226
the Revised Code to a person serving as a precinct election 227
official, to the extent that such compensation does not exceed 228
one thousand dollars annually. Such compensation in excess of 229
one thousand dollars may be subjected to taxation by a municipal
corporation. A municipal corporation shall not require the payer 230
of such compensation to withhold any tax from that compensation. 231
(5) Compensation paid to an employee of a transit 233
authority, regional transit authority, or regional transit 234
commission created under Chapter 306. of the Revised Code for 235
operating a transit bus or other motor vehicle for the authority 236
or commission in or through the municipal corporation, unless the
bus or vehicle is operated on a regularly scheduled route, the 237
operator is subject to such a tax by reason of residence or 238
domicile in the municipal corporation, or the headquarters of the 239
authority or commission is located within the municipal 240
corporation.
(6) The income of a public utility when that public 242
utility is subject to the tax levied under section 5727.30 of the 243
Revised Code. 244
(G) Any municipal corporation that taxes any type of 246
intangible income on March 29, 1988, pursuant to Section 3 of 247
Amended Substitute Senate Bill No. 238 of the 116th general 248
assembly, may continue to tax that type of income after 1988 if a 249
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majority of the electors of the municipal corporation voting on 250
the question of whether to permit the taxation of that type of
intangible income after 1988 vote in favor thereof at an election 251
held on November 8, 1988. 252
(H) Nothing in this section or section 718.02 of the 254
Revised Code, shall authorize the levy of any tax on income which 255
a municipal corporation is not authorized to levy under existing 256
laws or shall require a municipal corporation to allow a 257
deduction from taxable income for losses incurred from a sole 258
proprietorship or partnership.
Sec. 1771.01. AS USED IN SECTIONS 1771.01 TO 1771.11 OF 260
THE REVISED CODE:
(A) "AFFILIATE" HAS THE SAME MEANING AS IN 47 U.S.C.A. 522 265
AND INCLUDES A PUBLIC UTILITY OWNED OR OPERATED BY A MUNICIPAL 266
CORPORATION OR TOWNSHIP, BUT EXCLUDES A GOVERNMENTAL CABLE
OPERATOR. 267
(B) "CABLE OPERATOR," "CABLE SERVICE," AND "CABLE SYSTEM" 270
HAVE THE SAME MEANINGS AS IN 47 U.S.C.A. 522. 272
(C) "FRANCHISE" AND "FRANCHISING AUTHORITY" HAVE THE SAME 274
MEANINGS AS IN 47 U.S.C.A. 522. 275
(D) "GOVERNMENTAL CABLE OPERATOR" MEANS A CABLE OPERATOR 277
OWNED OR OPERATED BY A MUNICIPAL CORPORATION OR TOWNSHIP OR BY 278
ITS AFFILIATE.
(E) "LEGISLATIVE ACTION" MEANS, IN THE CASE OF A MUNICIPAL 281
CORPORATION, THE ENACTMENT OF AN ORDINANCE BY THE LEGISLATIVE 282
AUTHORITY OF THE MUNICIPAL CORPORATION AND, IN THE CASE OF A 283
TOWNSHIP, THE ADOPTION OF A RESOLUTION BY THE BOARD OF TOWNSHIP 284
TRUSTEES.
(F) "PUBLIC, EDUCATIONAL, OR GOVERNMENTAL ACCESS 286
FACILITIES" HAS THE SAME MEANING AS IN 47 U.S.C.A. 522. 287
(G) "PUBLIC MONEYS" MEANS ALL MONEYS IN THE TREASURY OF A 289
MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE OR MONEYS 291
COMING LAWFULLY INTO THE POSSESSION OR CUSTODY OF THE TREASURER 292
OF A MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE. 293
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(H) "PUBLIC UTILITY" EXCLUDES A CABLE SYSTEM OWNED OR 296
OPERATED BY A GOVERNMENTAL CABLE OPERATOR OR BY A MUNICIPAL 297
CORPORATION OR TOWNSHIP OR ITS AFFILIATE. 298
Sec. 1771.02. AS PROVIDED IN SECTIONS 1771.01 TO 1771.11 300
OF THE REVISED CODE, IT IS THE PUBLIC POLICY OF THIS STATE TO: 301
(A) ENSURE FAIR COMPETITION IN THE PROVISION OF CABLE 304
SERVICE IN THIS STATE, CONSISTENT WITH THE PROCOMPETITIVE 305
POLICIES OF THE "TELECOMMUNICATIONS ACT OF 1996," PUB. L. NO. 307
104-104, 110 STAT. 56, FOR THE PURPOSES OF PROVIDING THE WIDEST 309
POSSIBLE DIVERSITY OF ENTERTAINMENT, INFORMATION, AND NEWS 310
SOURCES TO THE GENERAL PUBLIC; ADVANCING THE UNFETTERED EXERCISE 311
OF RIGHTS UNDER THE FIRST AMENDMENT TO THE UNITED STATES 312
CONSTITUTION TO FREE SPEECH AND THE FREE FLOW OF INFORMATION; 313
ENHANCING THE DEVELOPMENT AND WIDESPREAD USE OF TECHNOLOGICAL 314
ADVANCES IN THE PROVISION OF CABLE SERVICE; AND ENCOURAGING 315
IMPROVED CUSTOMER SERVICE AT COMPETITIVE RATES; 316
(B) ENSURE THAT ALL CABLE SERVICE IN THIS STATE IS 318
PROVIDED WITHIN A COMPREHENSIVE AND NONDISCRIMINATORY FEDERAL, 319
STATE, AND LOCAL TAX AND REGULATORY SCHEME; 320
(C) ALLOW THE GENERAL PUBLIC FULL AND TIMELY INFORMATION, 323
AND THE OPPORTUNITY TO PARTICIPATE IN DECISIONS, RESPECTING THE 324
PROVISION AND FUNDING OF CABLE SERVICES BY A MUNICIPAL 325
CORPORATION OR TOWNSHIP OR ITS AFFILIATE. 326
Sec. 1771.03. (A) THE PROVISION OF CABLE SERVICE OVER A 329
CABLE SYSTEM IS NOT AN ESSENTIAL GOVERNMENTAL FUNCTION UNDER THE 330
LAWS OF THIS STATE OR OF ANY MUNICIPAL CORPORATION OR TOWNSHIP OF 331
THIS STATE. THE PROVISION OF CABLE SERVICE BY A MUNICIPAL 332
CORPORATION OR TOWNSHIP OR ITS AFFILIATE IS NOT A VALID EXERCISE 333
OF THE POLICE POWER UNLESS THAT SERVICE IS PROVIDED IN ACCORDANCE 334
WITH SECTIONS 1771.01 TO 1771.11 OF THE REVISED CODE. 335
(B) NO MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE 338
MAY PROVIDE CABLE SERVICE OVER A CABLE SYSTEM, WHETHER BUNDLED OR 339
UNBUNDLED WITH OTHER SERVICES, EXCEPT AS PROVIDED UNDER SECTIONS 340
1771.01 TO 1771.11 OF THE REVISED CODE. 341
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(C) NOTHING IN SECTIONS 1771.01 TO 1771.11 OF THE REVISED 343
CODE CONFERS AUTHORITY ON A MUNICIPAL CORPORATION OR TOWNSHIP TO 344
OWN OR OPERATE A GOVERNMENTAL CABLE OPERATOR. 345
Sec. 1771.04. NO GOVERNMENTAL CABLE OPERATOR SHALL 347
PROVIDE, WITHIN THE JURISDICTIONAL BOUNDARIES OF A MUNICIPAL 348
CORPORATION OR TOWNSHIP, CABLE SERVICE OVER A CABLE SYSTEM UNLESS 349
THE GOVERNMENTAL CABLE OPERATOR IS INCORPORATED AND ORGANIZED 350
UNDER CHAPTER 1701. OR 1702. OF THE REVISED CODE AND THE 352
MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE IS THE SOLE 353
SHAREHOLDER OR THE SOLE MEMBER OF THE GOVERNMENTAL CABLE 354
OPERATOR.
Sec. 1771.05. (A)(1) NO GOVERNMENTAL CABLE OPERATOR SHALL 356
BE FORMED BY A MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE 357
EXCEPT UPON LEGISLATIVE ACTION EXPRESSLY AUTHORIZING THAT 360
FORMATION IN COMPLIANCE WITH THIS SECTION AND SECTION 1771.06 OF 361
THE REVISED CODE. NO PUBLIC MONEYS OR PROPERTY OF THE MUNICIPAL 362
CORPORATION OR TOWNSHIP OR ITS AFFILIATE SHALL BE USED IN THE 364
FORMATION OF SUCH A GOVERNMENTAL CABLE OPERATOR EXCEPT IN A 365
MANNER CONSISTENT WITH SECTION 1771.08 OF THE REVISED CODE AND
EXCEPT PURSUANT TO AN APPROPRIATION, IN THAT SAME OR RELATED 366
LEGISLATIVE ACTION, FROM THE UNRESTRICTED FUND BALANCE OF THE 367
MUNICIPAL CORPORATION, TOWNSHIP, OR AFFILIATE FOR THE EXCLUSIVE 369
PURPOSE OF MAKING A LOAN TO, OR CONTRIBUTION TO THE CAPITAL OF, 370
THE GOVERNMENTAL CABLE OPERATOR.
(2) NO LEGISLATIVE ACTION SHALL BE TAKEN FOR THE PURPOSES 372
OF DIVISION (A)(1) OF THIS SECTION WITHOUT THE LEGISLATIVE 374
AUTHORITY OF THAT MUNICIPAL CORPORATION OR TOWNSHIP FIRST FINDING 375
ALL OF THE FOLLOWING:
(a) THE PROVISION OF CABLE SERVICE BY THE GOVERNMENTAL 378
CABLE OPERATOR WILL PROMOTE THE COMPETITIVE PROVISION OF IMPROVED 379
CABLE SERVICE TO CITIZENS OF THE MUNICIPAL CORPORATION OR 380
TOWNSHIP.
(b) THE APPROPRIATION OF PUBLIC MONEYS FOR THE PURPOSE OF 383
HAVING CABLE SERVICE PROVIDED BY THE GOVERNMENTAL CABLE OPERATOR 384
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WILL BE OF GREATER GENERAL BENEFIT TO THE COMMUNITY THAN OTHER 385
AUTHORIZED USES OF THOSE MONEYS. 386
(c) THE GOVERNMENTAL CABLE OPERATOR WILL BE 389
SELF-SUSTAINING AFTER RECEIPT OF THE APPROPRIATED MONEYS. 390
(3) LEGISLATIVE ACTION UNDER DIVISION (A)(1) OF THIS 393
SECTION ALSO SHALL BE PRECEDED BY A PUBLIC HEARING CONCERNING THE 395
FINDINGS OF THE FEASIBILITY STUDY PRESCRIBED IN SECTION 1771.06
OF THE REVISED CODE. THE HEARING SHALL BE HELD BY THE 398
LEGISLATIVE AUTHORITY NOT MORE THAN SIXTY DAYS AFTER THE FILING 399
OF THE FEASIBILITY STUDY IN ACCORDANCE WITH DIVISION (D) OF THAT 400
SECTION. THE LEGISLATIVE AUTHORITY SHALL PUBLISH NOTICE OF THE
HEARING IN ACCORDANCE WITH DIVISION (A) OF SECTION 1771.09 OF THE 401
REVISED CODE. THE NOTICE SHALL STATE THE TIME AND PLACE OF THE 403
HEARING AND SHALL CONTAIN A SUMMARY OF THE CONCLUSIONS OF THE 404
FEASIBILITY STUDY, INCLUDING, BUT NOT LIMITED TO, THE ESTIMATED 405
AMOUNT OF PUBLIC MONEYS TO BE LOANED OR CONTRIBUTED BY THE 406
MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE TO THE 407
OPERATOR AS AUTHORIZED UNDER DIVISION (A)(1) OF THIS SECTION, AS 409
WELL AS A STATEMENT THAT THE STUDY IS AVAILABLE FOR PUBLIC 410
INSPECTION AND COPYING IN ACCORDANCE WITH DIVISION (B) OF SECTION 411
1771.09 OF THE REVISED CODE AND A STATEMENT OF THE LOCATION AND 412
OFFICE HOURS OF THE RELEVANT OFFICE UNDER THAT DIVISION. 413
(B) NOTHING IN DIVISION (A) OF THIS SECTION APPLIES WITH 417
RESPECT TO A GOVERNMENTAL CABLE OPERATOR OPERATING PRIOR TO THE
EFFECTIVE DATE OF THIS SECTION. 418
Sec. 1771.06. (A) NO MUNICIPAL CORPORATION OR TOWNSHIP OR 420
ITS AFFILIATE SHALL FUND A FEASIBILITY STUDY FOR THE PURPOSE OF 423
DIVISION (A)(3) OF SECTION 1771.05 OF THE REVISED CODE EXCEPT 425
UPON LEGISLATIVE ACTION EXPRESSLY AUTHORIZING THE STUDY AND 426
APPROPRIATING FROM THE UNRESTRICTED FUND BALANCE OF THE MUNICIPAL 427
CORPORATION, TOWNSHIP, OR AFFILIATE PUBLIC MONEYS SUFFICIENT TO 429
PAY ALL COSTS OF CONDUCTING THE STUDY AND PREPARING AND 430
PRESENTING A REPORT ON THE STUDY CONCLUSIONS. NO SUCH 431
LEGISLATIVE ACTION SHALL BE TAKEN WITHOUT THE LEGISLATIVE 432
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AUTHORITY FIRST FINDING THAT THERE IS A SUBSTANTIAL LIKELIHOOD 433
THAT THE STANDARDS SPECIFIED IN DIVISIONS (A)(2)(a) AND (b) OF 434
SECTION 1771.05 OF THE REVISED CODE WILL BE MET. 436
(B) LEGISLATIVE ACTION UNDER DIVISION (A) OF THIS SECTION 440
SHALL BE PRECEDED BY A PUBLIC HEARING ON THE QUESTION OF THE 441
LEGISLATIVE ACTION. THE LEGISLATIVE AUTHORITY SHALL PUBLISH 442
NOTICE OF THE HEARING IN ACCORDANCE WITH DIVISION (A) OF SECTION 443
1771.09 OF THE REVISED CODE. THE NOTICE SHALL STATE THE TIME AND 446
PLACE OF THE HEARING AND SHALL CONTAIN THE TEXT OF THE PROPOSED 447
ORDINANCE OR RESOLUTION AND A SUMMARY OF IT, INCLUDING THE AMOUNT 448
OF THE PROPOSED APPROPRIATION.
(C) A FEASIBILITY STUDY UNDER THIS SECTION SHALL ADDRESS 451
ALL OF THE FOLLOWING:
(1) THE PUBLIC PURPOSES TO BE SERVED BY THE PROVISION OF 453
CABLE SERVICE TO ALL OR SOME OF THE RESIDENTS OF THE MUNICIPAL 455
CORPORATION OR TOWNSHIP BY A GOVERNMENTAL CABLE OPERATOR;
(2) THE NATURE AND LIKELIHOOD OF IMPROVEMENTS AND 457
DETRIMENTS TO THE PROVISION OF CABLE SERVICE TO SUCH RESIDENTS 458
THAT ARE EXPECTED TO RESULT, DIRECTLY OR AS THE RESULT OF 459
ENHANCED COMPETITION, FROM PROVISION OF CABLE SERVICE BY A 460
GOVERNMENTAL CABLE OPERATOR; 461
(3) THE PROJECTED COSTS OF ESTABLISHING, EQUIPPING, AND 463
OPERATING A CABLE SYSTEM AND PROVIDING CABLE SERVICE TO THE 464
RESIDENTS OF THE MUNICIPAL CORPORATION OR TOWNSHIP BY A 465
GOVERNMENTAL CABLE OPERATOR; 466
(4) THE AMOUNTS, SOURCES, AND TERMS OF REQUIRED FINANCING, 469
INCLUDING THE AMOUNTS, TIMING, AND TERMS OF ANY LOANS OR CAPITAL 470
CONTRIBUTIONS TO THE GOVERNMENTAL CABLE OPERATOR BY THE MUNICIPAL 471
CORPORATION OR TOWNSHIP OR ITS AFFILIATE;
(5) THE PROJECTED OPERATING RESULTS OF THE GOVERNMENTAL 473
CABLE OPERATOR FOR EACH OF ITS FIRST FIVE YEARS OF OPERATION, OR 474
UNTIL IT IS PROJECTED TO BE FINANCIALLY SELF-SUSTAINING, 475
WHICHEVER IS LATER, WHICH PROJECTIONS SHALL BE SUPPORTED BY A 476
MARKETING STUDY; 477
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(6) THE MANAGERIAL, TECHNICAL, FINANCIAL, AND LEGAL 479
CAPABILITIES OF THE GOVERNMENTAL CABLE OPERATOR TO PROVIDE 480
COMPETITIVE CABLE SERVICE; 481
(7) THE GOVERNMENTAL CABLE OPERATOR'S COMPLIANCE WITH 483
APPLICABLE FEDERAL, STATE, AND LOCAL LAWS. 484
ADDITIONALLY, THE STUDY SHALL INCLUDE A CONCLUSION 486
REGARDING WHETHER A GOVERNMENTAL CABLE OPERATOR FORMED BY THE 487
MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE WOULD PROVIDE 488
CABLE SERVICE THAT IS COMPETITIVE IN TECHNOLOGY, PROGRAMMING, 489
RATES, AND CUSTOMER SERVICE AND WOULD BE FINANCIALLY 490
SELF-SUSTAINING.
(D) UPON COMPLETION OF THE FEASIBILITY STUDY, IT SHALL BE 492
FILED AND AVAILABLE FOR PUBLIC INSPECTION AND COPYING IN 493
ACCORDANCE WITH DIVISION (B) OF SECTION 1771.09 OF THE REVISED 494
CODE.
Sec. 1771.07. (A) AFTER THE FORMATION OF A GOVERNMENTAL 497
CABLE OPERATOR UNDER SECTIONS 1771.01 TO 1771.06 OF THE REVISED 499
CODE, NO OTHER PUBLIC MONEYS OF THE MUNICIPAL CORPORATION OR 500
TOWNSHIP OR ITS AFFILIATE SHALL BE PROVIDED FOR LOAN OR 501
CONTRIBUTION TO THE CAPITAL OF THE GOVERNMENTAL CABLE OPERATOR 502
EXCEPT UPON THE APPLICATION OF THE GOVERNMENTAL CABLE OPERATOR IN 504
ACCORDANCE WITH DIVISIONS (B) TO (D) OF THIS SECTION AND SECTION 505
1771.08 OF THE REVISED CODE AND SUBSEQUENT LEGISLATIVE ACTION 506
AUTHORIZING AN APPROPRIATION FOR THAT PURPOSE FROM THE 507
UNRESTRICTED FUND BALANCE OF THE MUNICIPAL CORPORATION, TOWNSHIP, 508
OR AFFILIATE, AND UPON MAKING THE FINDING PRIOR TO THAT 510
LEGISLATIVE ACTION THAT THE CONTINUED PROVISION OF CABLE SERVICE 511
BY THE GOVERNMENTAL CABLE OPERATOR WILL ACHIEVE ALL OF THE 512
OBJECTIVES SPECIFIED IN DIVISIONS (A)(2)(a) TO (c) OF SECTION 513
1771.05 OF THE REVISED CODE. 514
(B) LEGISLATIVE ACTION UNDER DIVISION (A) OF THIS SECTION 518
SHALL BE PRECEDED BY A PUBLIC HEARING ON THE QUESTION OF THE 519
LEGISLATIVE ACTION. THE LEGISLATIVE AUTHORITY SHALL PUBLISH 520
NOTICE OF THE HEARING IN ACCORDANCE WITH DIVISION (A) OF SECTION 521
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1771.09 OF THE REVISED CODE. THE NOTICE SHALL STATE THE TIME AND 523
PLACE OF THE HEARING AND SHALL CONTAIN A STATEMENT OF THE AMOUNT 524
OF THE PROPOSED APPROPRIATION, A STATEMENT THAT THE APPLICATION 525
IS AVAILABLE FOR PUBLIC INSPECTION AND COPYING IN ACCORDANCE WITH 526
DIVISION (B) OF SECTION 1771.09 OF THE REVISED CODE, AND A 527
STATEMENT OF THE LOCATION AND OFFICE HOURS OF THE RELEVANT OFFICE
UNDER THAT DIVISION. 528
(C) THE APPLICATION BY THE GOVERNMENTAL CABLE OPERATOR FOR 531
ADDITIONAL PUBLIC FUNDING SHALL INCLUDE ALL OF THE FOLLOWING: 532
(1) SPECIFICATION OF THE AMOUNT OF ADDITIONAL FUNDING 534
REQUESTED; 535
(2) SPECIFICATION IN REASONABLE DETAIL OF THE PURPOSES AND 538
COSTS TO WHICH THAT ADDITIONAL FUNDING WILL BE APPLIED; 539
(3) COMPARATIVE, AUDITED FINANCIAL STATEMENTS FOR THE 541
GOVERNMENTAL CABLE OPERATOR, INCLUDING BALANCE SHEETS AND 542
STATEMENTS OF RESULTS OF OPERATIONS AND CASH FLOW, FOR ITS TWO 543
MOST RECENTLY COMPLETED FISCAL YEARS; 544
(4) A PROJECTION OF THE OPERATING RESULTS OF THE 546
GOVERNMENTAL CABLE OPERATOR, ASSUMING SUCH ADDITIONAL FUNDING IS 547
LOANED OR CONTRIBUTED, FOR EACH OF ITS FOLLOWING THREE YEARS OF 548
OPERATION, OR UNTIL IT IS PROJECTED TO BE FINANCIALLY 549
SELF-SUSTAINING, WHICHEVER IS LATER, WHICH PROJECTIONS SHALL BE 550
SUPPORTED BY A MARKETING STUDY; 551
(5) IF ANY PART OF THE ADDITIONAL FUNDING IS TO BE MADE BY 554
LOAN, SPECIFICATION OF THE APPLICABLE INTEREST RATE AND TERMS OF 555
REPAYMENT.
(D) THE APPLICATION FOR ADDITIONAL PUBLIC FUNDING SHALL BE 557
FILED WITH AND AVAILABLE FOR PUBLIC INSPECTION AND COPYING IN 558
ACCORDANCE WITH SECTION 1771.05 OF THE REVISED CODE AT LEAST 559
THIRTY DAYS PRIOR TO THE PUBLIC HEARING REQUIRED BY DIVISION (B) 561
OF THIS SECTION. THE LEGISLATIVE AUTHORITY SHALL PUBLISH NOTICE 562
OF THE TIME AND PLACE OF THE PUBLIC HEARING IN ACCORDANCE WITH 563
DIVISION (A) OF SECTION 1771.09 OF THE REVISED CODE, TOGETHER 565
WITH A STATEMENT OF THE AMOUNT OF ADDITIONAL PUBLIC FUNDS TO BE 566
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LOANED OR CONTRIBUTED BY THE MUNICIPAL CORPORATION OR TOWNSHIP OR 567
ITS AFFILIATE TO THE GOVERNMENTAL CABLE OPERATOR, A STATEMENT 569
THAT THE APPLICATION FOR ADDITIONAL PUBLIC FUNDING IS AVAILABLE 570
FOR PUBLIC INSPECTION AND COPYING IN ACCORDANCE WITH DIVISION (B) 571
OF SECTION 1771.09 OF THE REVISED CODE, AND A STATEMENT OF THE 572
LOCATION AND OFFICE HOURS OF THE RELEVANT OFFICE UNDER THAT
DIVISION. 573
Sec. 1771.08. (A) NO MUNICIPAL CORPORATION OR TOWNSHIP OR 575
ITS AFFILIATE SHALL MAKE LOANS AND CONTRIBUTIONS TO THE CAPITAL 577
OF A GOVERNMENTAL CABLE OPERATOR TO THE EXTENT AUTHORIZED UNDER 578
SECTIONS 1771.01 TO 1771.07 OF THE REVISED CODE EXCEPT IN CASH OR 579
IN THE FORM OF PROPERTY HAVING A FAIR MARKET VALUE IN THE 580
AGGREGATE NOT IN EXCESS OF THE UNRESTRICTED FUND BALANCE OF THE 581
MUNICIPAL CORPORATION, TOWNSHIP, OR AFFILIATE AT THE TIME OF THE 582
LOAN OR CONTRIBUTION. NO SUCH LOAN OR CONTRIBUTION SHALL BE 584
FINANCED, IN WHOLE OR IN PART, WITH DEBT OR ANY OBLIGATION OF THE 585
MUNICIPAL CORPORATION, TOWNSHIP, OR AFFILIATE, WHETHER THE 586
OBLIGATION IS PAYABLE FROM GENERAL TAX REVENUES OR IS SECURED BY 587
THE FULL FAITH AND CREDIT OF THE MUNICIPAL CORPORATION, TOWNSHIP, 588
OR AFFILIATE OR OTHERWISE. NO MUNICIPAL CORPORATION OR TOWNSHIP 589
OR ITS AFFILIATE SHALL GUARANTEE ANY OBLIGATION OF THE 590
GOVERNMENTAL CABLE OPERATOR, OR PLEDGE PROPERTY OR REVENUES, 591
WHETHER PUBLIC PROPERTY OR OTHERWISE OR GENERAL TAX REVENUES OR 592
OTHERWISE, AS SECURITY FOR ANY OBLIGATION OF THE GOVERNMENTAL 593
CABLE OPERATOR. 594
(B) NO MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE 597
SHALL MAKE A LOAN TO, PROVIDE SERVICES TO, OR PERMIT THE USE OF 598
PROPERTY IT OWNS OR OPERATES BY, A GOVERNMENTAL CABLE OPERATOR 599
EXCEPT PURSUANT TO A WRITTEN AGREEMENT THAT PROVIDES FOR 600
REPAYMENT OF THE LOAN, PAYMENT FOR THOSE SERVICES, OR USE AT THE 601
FAIR MARKET RATE AND THAT ESTABLISHES SUCH OTHER TERMS AND 602
CONDITIONS AS WOULD EXIST IN AN ARMS-LENGTH TRANSACTION FOR THE 603
MAKING AND REPAYMENT OF SUCH A LOAN, THE PROVISION OF SUCH 604
SERVICES, OR THE USE OF SUCH PROPERTY BY AN UNAFFILIATED THIRD 605
15
PARTY. NO MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE, 606
DIRECTLY OR INDIRECTLY, BY ANY DEVICE OR METHOD, SHALL CHARGE OR 607
RECEIVE A DIFFERENT AMOUNT FROM A GOVERNMENTAL CABLE OPERATOR 608
THAN IT CHARGES OR RECEIVES FROM ANY OTHER PERSON FOR A LIKE AND 609
CONTEMPORANEOUS RIGHT, INTEREST, PRIVILEGE, USE, OR SERVICE UNDER 610
SUBSTANTIALLY THE SAME CIRCUMSTANCES AND CONDITIONS. NO 611
MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE, DIRECTLY OR 612
INDIRECTLY, BY ANY DEVICE OR METHOD, SHALL USE ANY SOVEREIGN 613
AUTHORITY IT HAS UNDER THE LAWS OF THIS STATE FOR THE BENEFIT OF 614
A GOVERNMENTAL CABLE OPERATOR IN PREFERENCE TO ANY OTHER PERSON 615
SIMILARLY SITUATED.
(C) NOTHING IN DIVISION (A) OR (B) OF THIS SECTION APPLIES 618
WITH RESPECT TO A LOAN, CONTRIBUTION, GUARANTEE, PLEDGE, 619
PROVISION OF SERVICES, OR USE OF PROPERTY AUTHORIZED AND IN 620
EFFECT OR RENDERED PRIOR TO THE EFFECTIVE DATE OF THIS SECTION. 622
Sec. 1771.09. (A) ANY NOTICE REQUIRED UNDER SECTIONS 624
1771.01 TO 1771.08 OF THE REVISED CODE, WHETHER IN CONNECTION 626
WITH THE FORMATION OF A GOVERNMENTAL CABLE OPERATOR OR 627
SUBSEQUENTLY, SHALL BE PUBLISHED IN A NEWSPAPER OF GENERAL 628
CIRCULATION WITHIN THE JURISDICTIONAL BOUNDARIES OF THE MUNICIPAL 629
CORPORATION OR TOWNSHIP AT LEAST TWICE PRIOR TO THE HEARING DATE, 630
THE FIRST PUBLICATION OCCURRING NOT LESS THAN THIRTY DAYS, AND 631
THE SECOND OCCURRING NOT MORE THAN SEVEN DAYS, PRIOR TO THE 632
HEARING DATE. THE PUBLICATION SHALL BE MADE IN THE BODY TYPE OF 633
THE NEWSPAPER UNDER HEADLINES IN EIGHTEEN POINT TYPE. THE CHIEF 634
LEGAL OFFICER OF THE POLITICAL SUBDIVISION SHALL REVIEW THE 635
NOTICE PRIOR TO FORWARDING IT FOR PUBLICATION, TO ENSURE THAT THE 636
NOTICE IS LEGALLY ACCURATE AND SUFFICIENT. NO NEWSPAPER SHALL BE 637
PAID A HIGHER PRICE FOR A PUBLICATION UNDER SECTIONS 1771.01 TO 638
1771.11 OF THE REVISED CODE THAN ITS MAXIMUM BONA FIDE COMMERCIAL
RATE. 639
(B) ANY DOCUMENT REQUIRED UNDER SECTIONS 1771.01 TO 641
1771.11 OF THE REVISED CODE TO BE AVAILABLE FOR PUBLIC INSPECTION 642
AND COPYING, WHETHER IN CONNECTION WITH THE FORMATION OF A 643
16
GOVERNMENTAL CABLE OPERATOR OR SUBSEQUENTLY, SHALL BE FILED WITH, 644
AND SHALL BE SO AVAILABLE IN ACCORDANCE WITH SECTION 149.43 OF 645
THE REVISED CODE IN, THE OFFICE OF THE CLERK OF THE MUNICIPAL 646
CORPORATION OR TOWNSHIP OR, IF NO SUCH OFFICE EXISTS, SUCH OTHER 648
OFFICE AS THE APPLICABLE LEGISLATIVE ACTION UNDER SECTIONS 649
1771.01 TO 1771.11 OF THE REVISED CODE SHALL SPECIFY. 650
Sec. 1771.10. (A) NOTWITHSTANDING ANY LAW OF THIS STATE 653
TO THE CONTRARY, NO MUNICIPAL CORPORATION OR TOWNSHIP SHALL BE 654
THE FRANCHISING AUTHORITY FOR A GOVERNMENTAL CABLE OPERATOR OF 655
WHICH THE MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE IS 657
THE SOLE SHAREHOLDER OR MEMBER.
(B) NO GOVERNMENTAL CABLE OPERATOR SHALL PROVIDE CABLE 660
SERVICE, OVER A CABLE SYSTEM IN THIS STATE, EXCLUSIVELY TO 661
SUBSCRIBERS WITHIN THE JURISDICTIONAL BOUNDARIES OF THE MUNICIPAL 662
CORPORATION OR TOWNSHIP THAT IS THE SOLE SHAREHOLDER OR MEMBER OF 663
THE GOVERNMENTAL CABLE OPERATOR OR THE MUNICIPAL CORPORATION OR
TOWNSHIP THE AFFILIATE OF WHICH IS THE SOLE SHAREHOLDER OR 664
MEMBER, WITHOUT FIRST OBTAINING A FRANCHISE FROM THE COMMISSION 666
PURSUANT TO COMMISSION ORDER. THE COMMISSION SHALL BE THE SOLE 667
FRANCHISING AUTHORITY FOR SUCH A GOVERNMENTAL CABLE OPERATOR, AND 668
THE COMMISSION IS HEREBY VESTED WITH THE POWER AND JURISDICTION 669
TO SUPERVISE AND REGULATE ANY SUCH GOVERNMENTAL CABLE OPERATOR 670
PURSUANT TO THIS SECTION AND CONSISTENT WITH THE 671
"TELECOMMUNICATIONS ACT OF 1996," PUB. L. NO. 104-104, 110 STAT. 673
56.
THE APPLICATION FOR A FRANCHISE FROM THE COMMISSION SHALL 676
BE IN SUCH FORM AS THE COMMISSION SHALL PRESCRIBE. IN 677
DETERMINING WHETHER TO GRANT OR DENY A FRANCHISE TO A 678
GOVERNMENTAL CABLE OPERATOR, THE COMMISSION SHALL CONSIDER ALL OF 679
THE FOLLOWING FACTORS:
(1) THE TECHNICAL, MANAGERIAL, AND FINANCIAL CAPABILITIES 682
OF THE GOVERNMENTAL CABLE OPERATOR TO PROVIDE CABLE SERVICE OVER 683
A CABLE SYSTEM;
(2) THE QUALITY OF CABLE SERVICE TO BE OFFERED BY THE 685
17
GOVERNMENTAL CABLE OPERATOR; 686
(3) THE TECHNICAL AND PERFORMANCE QUALITY OF THE EQUIPMENT 689
TO BE USED;
(4) THE PROPOSED RATES TO SUBSCRIBERS OF THE GOVERNMENTAL 691
CABLE OPERATOR;
(5) ANY OTHER FACTORS DETERMINED PERTINENT BY THE 694
COMMISSION. 695
(C) THE COMMISSION, IN AN ORDER GRANTING A FRANCHISE UNDER 698
THIS SECTION, SHALL SET THE TERMS OF THE FRANCHISE, SUCH THAT THE 699
TERMS ARE CONSISTENT WITH THE POLICY SPECIFIED IN SECTION 1771.02 700
OF THE REVISED CODE. IN SETTING TERMS CONSISTENT WITH THAT 702
POLICY, THE COMMISSION SHALL CONSIDER ALL RELEVANT FACTORS OR 703
OBJECTIVES, INCLUDING, BUT NOT LIMITED TO, ALL OF THE FOLLOWING: 704
(1) THE TERMS AND CONDITIONS OF FRANCHISES ISSUED TO OTHER 707
CABLE OPERATORS PROVIDING CABLE SERVICE OVER CABLE SYSTEMS
CONSTRUCTED AND OPERATED WITHIN THE JURISDICTIONAL BOUNDARIES OF 708
THE MUNICIPAL CORPORATION OR TOWNSHIP; 709
(2) MAINTENANCE OF JUST AND REASONABLE RATES, RENTALS, AND 712
CHARGES;
(3) ENCOURAGEMENT OF INNOVATION AND TECHNOLOGICAL 714
ADVANCES; 715
(4) PROMOTION OF DIVERSITY AND OPTIONS; 717
(5) RECOGNITION OF MARKET FORCES; 719
(6) PROTECTION OF CONSUMERS; 721
(7) PROMOTION OF THE PUBLIC WELFARE THROUGH PUBLIC 723
WELFARE-ENHANCING PROVISIONS; 724
(8) RECOGNITION OF EFFICIENT BUSINESS PRACTICES. 726
(D) IN ADDITION TO THE REQUIREMENTS OF DIVISION (C) OF 729
THIS SECTION, THE TERMS OF THE FRANCHISE SHALL INCLUDE ALL OF THE 731
FOLLOWING:
(1) A FRANCHISE FEE DETERMINED AS A PERCENTAGE OF THE 733
GROSS REVENUES OF THE GOVERNMENTAL CABLE OPERATOR FROM THE 734
PROVISION OF CABLE SERVICES WITHIN THE JURISDICTIONAL BOUNDARIES 735
OF THE MUNICIPAL CORPORATION OR TOWNSHIP; 736
18
(2) CUSTOMER SERVICE REQUIREMENTS AND CONSUMER PROTECTION 738
PROVISIONS; 739
(3) OBLIGATIONS WITH RESPECT TO OR IN LIEU OF THE 741
PROVISION OF PUBLIC, EDUCATIONAL, OR GOVERNMENTAL ACCESS 742
FACILITIES AND THE PROVISION OF REDUCED-COST SERVICES TO PUBLIC, 743
EDUCATIONAL, OR GOVERNMENTAL ENTITIES COMMENSURATE WITH THE 744
INTERESTS OF THE COMMUNITY AND THE POLICY SPECIFIED IN SECTION 745
1771.02 OF THE REVISED CODE, AND OBLIGATIONS WITH RESPECT TO OR 748
IN LIEU OF THE PROVISION OF ACCESS TO CABLE SERVICE TO ALL 749
HOUSEHOLDS IN THE FRANCHISE AREA.
(E) FRANCHISE FEES PAID UNDER THIS SECTION SHALL BE 752
DEPOSITED INTO THE STATE TREASURY TO THE CREDIT OF THE GENERAL 753
REVENUE FUND. ANY SUCH AMOUNTS PAID INTO THE GENERAL REVENUE 754
FUND, BUT NOT EXPENDED BY THE COMMISSION FOR THE PURPOSES OF 755
ADMINISTERING THIS SECTION, SHALL BE CREDITED RATABLY BY THE 756
COMMISSION, AFTER FIRST DEDUCTING ANY DEFICITS ACCUMULATED FROM 757
PRIOR YEARS, TO EACH MUNICIPAL CORPORATION OR TOWNSHIP HAVING 758
WITHIN ITS JURISDICTIONAL BOUNDARIES A GOVERNMENTAL CABLE 759
OPERATOR WITH A FRANCHISE PURSUANT TO THIS SECTION. SUCH 760
MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE SHALL NOT USE 761
MONEYS RECEIVED UNDER THIS DIVISION FOR A LOAN OR CAPITAL 762
CONTRIBUTION TO A GOVERNMENTAL CABLE OPERATOR EXCEPT IN 763
ACCORDANCE WITH SECTIONS 1771.01 TO 1771.11 OF THE REVISED CODE. 764
(F) THE COMMISSION SHALL ADOPT RULES TO CARRY OUT THIS 766
SECTION. THE RULES SHALL INCLUDE PROCEDURES FOR PUBLIC HEARINGS 768
ON FRANCHISE APPLICATIONS AND ON THE TERMS OF FRANCHISES GRANTED 769
BY THE COMMISSION; FOR ADDRESSING SUBSCRIBER AND COMMUNITY
COMPLAINTS REGARDING A FRANCHISEE UNDER THIS SECTION; AND FOR 771
PERIODIC REPORTING, AUDIT, AND INSPECTION REQUIREMENTS FOR 772
FRANCHISEES. 773
(G) NOTHING IN SECTIONS 1771.01 TO 1771.11 OF THE REVISED 775
CODE AUTHORIZES REGULATION, AS A COMMON CARRIER OR UTILITY, OF A 777
CABLE SYSTEM PROVIDING CABLE SERVICE TO THE EXTENT THAT
REGULATION IS PROHIBITED BY 47 U.S.C.A. 541(c). 779
19
Sec. 1771.11. A GOVERNMENTAL CABLE OPERATOR SHALL BE 781
DEEMED, FOR TAXATION AND OTHER PURPOSES UNDER THE LAWS OF THIS 782
STATE, TO BE ENGAGED IN A BUSINESS ACTIVITY. A GOVERNMENTAL 783
CABLE OPERATOR SHALL NOT BE DEEMED UNDER THE LAWS OF THIS STATE 784
TO BE A POLITICAL SUBDIVISION FOR ANY PURPOSE WHATSOEVER. 785
Sec. 5701.08. As used in Title LVII of the Revised Code: 795
(A) Personal property is "used" within the meaning of 797
"used in business" when employed or utilized in connection with 798
ordinary or special operations, when acquired or held as means or 799
instruments for carrying on the business, when kept and 800
maintained as a part of a plant capable of operation, whether 801
actually in operation or not, or when stored or kept on hand as 802
material, parts, products, or merchandise. Machinery and 803
equipment classifiable upon completion as personal property while 804
under construction or installation to become part of a new or 805
existing plant or other facility is not considered to be "used" 806
by the owner of such plant or other facility within the meaning 807
of "used in business" until such machinery and equipment is 808
installed and in operation or capable of operation in the 809
business for which acquired. Agricultural products in storage in 810
a grain elevator, a warehouse, or a place of storage which 811
products are subject to control of the United States government 812
and are to be shipped on order of the United States government 813
are not used in business in this state. 814
(B) Merchandise or agricultural products shipped from 816
outside this state and held in this state in a warehouse or a 817
place of storage without further manufacturing or processing and 818
for storage only and for shipment outside this state are not used 819
in business in this state. Such property qualifies for this 820
exception if division (B)(1) or (2) of this section applies: 821
(1) During any period that a person owns such property in 823
this state: 824
(a) The property is to be shipped from a warehouse or 826
place of storage in this state to the owner of the property or 827
20
persons other than customers at locations outside this state for 828
use, processing, or sale; or 829
(b) The property is located in public or private 831
warehousing facilities in this state which are not subject to the 832
control of or under the supervision of the owner of the property 833
or manned by its employees and from which the property is to be 834
shipped to any person, including a customer, outside this state. 835
(2) During the first twenty-four calendar months that a 837
person first owns such property in this state, the property is 838
held in a warehouse or place of storage in this state located 839
within one mile of the closest boundary of an airport, and is 840
shipped to any person, including a customer, outside this state. 841
For the purposes of division (B)(2) of this section, 843
"airport" means any airport, as defined in division (C) of 844
section 4561.01 of the Revised Code, which is approved by the 845
department of transportation under section 4561.11 of the Revised 846
Code to be used for commercial purposes, is regularly served by 847
only one air carrier authorized to do so under 14 C.F.R., and is 848
not a public airport as defined in 49 U.S.C. Appx. 2202(a)(17) as 849
existing on the effective date of this amendment. 850
(3) For property that may meet the condition for the 852
exception provided in division (B)(2) of this section, if it is 853
not known at the conclusion of a reporting period whether the 854
property yet qualifies for such exception, the owner of such 855
property shall return it for taxation. If it is later determined 856
that the returned property does so qualify, the owner may apply 857
for a final assessment and refund on the property as provided in 858
section 5711.26 of the Revised Code. 859
(C) Leased property used by the lessee exclusively for 861
agricultural purposes and new or used machinery and equipment and 862
accessories therefor that are designed and built for agricultural 863
use and owned by a merchant as defined in section 5711.15 of the 864
Revised Code are not considered to be "used" within the meaning 865
of "used in business." 866
21
(D) Moneys, deposits, investments, accounts receivable, 868
and prepaid items, and other taxable intangibles are "used" when 869
they or the avails thereof are being applied, or are intended to 870
be applied, in the conduct of the business, whether in this state 871
or elsewhere. 872
(E) PERSONAL PROPERTY THAT IS USED BY A CABLE OPERATOR OR 874
GOVERNMENTAL CABLE OPERATOR TO PROVIDE CABLE SERVICE OVER A CABLE 875
SYSTEM, AS THOSE TERMS ARE DEFINED IN SECTION 1771.01 OF THE 876
REVISED CODE, IS USED IN BUSINESS.
(F) "Business" includes all enterprises, except 878
agriculture, conducted for gain, profit, or income and extends to 879
personal service occupations AND TO CABLE OPERATORS AND 880
GOVERNMENTAL CABLE OPERATORS AS THOSE TERMS ARE DEFINED IN 881
SECTION 1771.01 OF THE REVISED CODE.
Sec. 5709.08. (A) Real or personal property belonging to 890
the state or United States used exclusively for a public purpose, 891
and public property used exclusively for a public purpose, shall 892
be exempt from taxation. Real and personal property, when 893
devoted to public use and not held for pecuniary profit, owned by 894
an adjoining state or any political subdivision or agency of such 895
adjoining state, which would be exempt from taxation if owned by
the state of Ohio or a political subdivision or agency thereof, 897
shall be exempt from taxation providing that such adjoining state 898
exempts from taxation real and personal property devoted to 899
public use and not held for pecuniary profit, owned by the state 900
of Ohio or any political subdivision or agency thereof, which 901
would be exempt from taxation if owned by the adjoining state or
political subdivision or agency thereof. 902
(B) NOTHING IN DIVISION (A) OF THIS SECTION AUTHORIZES AN 905
EXEMPTION FOR ANY REAL OR PERSONAL PROPERTY OWNED, OPERATED, OR
USED BY A CABLE OPERATOR OR A GOVERNMENTAL CABLE OPERATOR AS 906
THOSE TERMS ARE DEFINED IN SECTION 1771.01 OF THE REVISED CODE, 907
OR AUTHORIZES AN EXEMPTION FOR ANY PERSONAL PROPERTY USED IN 908
BUSINESS AS DEFINED IN DIVISION (E) OF SECTION 5701.08 OF THE
22
REVISED CODE.
Sec. 5709.10. (A) Market houses and other houses or 917
halls, public squares, or other public grounds of a municipal 918
corporation or township used exclusively for public purposes or 919
erected by taxation for such purposes, land and multi-level 920
parking structures used exclusively for a public purpose and
owned and operated by a municipal corporation under section 922
717.05 of the Revised Code that charges no fee for the privilege 923
of parking thereon, property used as a county fairgrounds that is 924
owned by the board of county commissioners or by a county 926
agricultural society, and property of housing authorities created
and organized under and for the purposes of sections 3735.27 to 927
3735.50 of the Revised Code, which property is hereby declared to 928
be public property used exclusively for a public purpose, 929
notwithstanding that parts thereof may be lawfully leased, shall 930
be exempt from taxation.
(B) NOTHING IN DIVISION (A) OF THIS SECTION AUTHORIZES AN 933
EXEMPTION FOR ANY REAL OR PERSONAL PROPERTY OWNED, OPERATED, OR
USED BY A CABLE OPERATOR OR A GOVERNMENTAL CABLE OPERATOR AS 934
THOSE TERMS ARE DEFINED IN SECTION 1771.01 OF THE REVISED CODE, 935
OR AUTHORIZES AN EXEMPTION FOR ANY PERSONAL PROPERTY USED IN 936
BUSINESS AS DEFINED IN DIVISION (E) OF SECTION 5701.08 OF THE
REVISED CODE.
Sec. 5709.11. (A) Works, machinery, pipe lines, and 945
fixtures belonging to a municipal corporation and used 946
exclusively for conveying water to it, or for heating or lighting 947
it, shall be exempt from taxation.
(B) NOTHING IN DIVISION (A) OF THIS SECTION AUTHORIZES AN 950
EXEMPTION FOR ANY REAL OR PERSONAL PROPERTY OWNED, OPERATED, OR
USED BY A CABLE OPERATOR OR A GOVERNMENTAL CABLE OPERATOR AS 951
THOSE TERMS ARE DEFINED IN SECTION 1771.01 OF THE REVISED CODE, 952
OR AUTHORIZES AN EXEMPTION FOR ANY PERSONAL PROPERTY USED IN 953
BUSINESS AS DEFINED IN DIVISION (E) OF SECTION 5701.08 OF THE
REVISED CODE.
23
Sec. 5709.12. (A) As used in this section, "independent 962
living facilities" means any residential housing facilities and 963
related property that are not a nursing home, residential care 965
facility, or adult care facility as defined in division (A) of 966
section 5701.13 of the Revised Code. 967
(B) Lands, houses, and other buildings belonging to a 969
county, township, or municipal corporation and used exclusively 970
for the accommodation or support of the poor, or leased to the 971
state or any political subdivision for public purposes shall be 972
exempt from taxation. Real and tangible personal property 973
belonging to institutions that is used exclusively for charitable 974
purposes shall be exempt from taxation. All property owned and 975
used by a nonprofit organization exclusively for a home for the 976
aged, as defined in section 5701.13 of the Revised Code, also 977
shall be exempt from taxation. 978
(C) If a home for the aged is operated in conjunction with 980
or at the same site as independent living facilities, the 981
exemption granted in division (B) of this section shall include 982
kitchen, dining room, clinic, entry ways, maintenance and storage 983
areas, and land necessary for access commonly used by both 984
residents of the home for the aged and residents of the 985
independent living facilities. Other facilities commonly used by 986
both residents of the home for the aged and residents of 987
independent living units shall be exempt from taxation only if 988
the other facilities are used primarily by the residents of the 989
home for the aged. Vacant land currently unused by the home, and 990
independent living facilities and the lands connected with them 991
are not exempt from taxation. Except as provided in division (A) 992
of section 5709.121 of the Revised Code, property of a home 993
leased for nonresidential purposes is not exempt from taxation. 994
(D) A private corporation established under federal law, 996
as defined in 36 U.S.C. 1101, Pub. L. 102-199, 105 Stat. 1629, as 997
amended, the objects of which include encouraging the advancement 998
of science generally, or of a particular branch of science, the 999
24
promotion of scientific research, the improvement of the 1,000
qualifications and usefulness of scientists, or the increase and 1,001
diffusion of scientific knowledge is conclusively presumed to be 1,002
a charitable or educational institution. A private corporation 1,003
established as a nonprofit corporation under the laws of a state, 1,004
that is exempt from federal income taxation under section 1,005
501(c)(3) of the Internal Revenue Code of 1986, 100 Stat. 2085, 1,006
26 U.S.C.A. 1, as amended, and has as its principal purpose one 1,007
or more of the foregoing objects, also is conclusively presumed 1,008
to be a charitable or educational institution. 1,009
The fact that an organization described in this division 1,011
operates in a manner that results in an excess of revenues over 1,012
expenses shall not be used to deny the exemption granted by this 1,013
section, provided such excess is used, or is held for use, for 1,014
exempt purposes or to establish a reserve against future 1,015
contingencies; and, provided further, that such excess may not be 1,016
distributed to individual persons or to entities that would not 1,017
be entitled to the tax exemptions provided by this chapter. Nor 1,018
shall the fact that any scientific information diffused by the 1,019
organization is of particular interest or benefit to any of its 1,020
individual members be used to deny the exemption granted by this 1,021
section, provided that such scientific information is available 1,022
to the public for purchase or otherwise. 1,023
When a private corporation as described in this division 1,025
sells all or any portion of a tract, lot, or parcel of real 1,026
estate that has been exempt from taxation under this section and 1,027
section 5709.121 of the Revised Code, the portion sold shall be 1,028
restored to the tax list for the year following the year of the 1,029
sale and a charge shall be levied against the sold property in an 1,030
amount equal to the tax savings on such property during the four 1,031
tax years preceding the year the property is placed on the tax 1,032
list. The tax savings equals the amount of the additional taxes 1,033
that would have been levied if such property had not been exempt 1,034
from taxation. 1,035
25
The charge constitutes a lien of the state upon such 1,037
property as of the first day of January of the tax year in which 1,038
the charge is levied and continues until discharged as provided 1,039
by law. The charge may also be remitted for all or any portion 1,040
of such property that the tax commissioner determines is entitled 1,041
to exemption from real property taxation for the year such 1,042
property is restored to the tax list under any provision of the 1,043
Revised Code, other than sections 725.02, 1728.10, 3735.67, 1,044
5709.40, 5709.41, 5709.62, 5709.63, 5709.71, 5709.73, 5709.78, 1,045
and 5709.84 OF THE REVISED CODE, upon an application for 1,046
exemption covering the year such property is restored to the tax 1,047
list filed under section 5715.27 of the Revised Code. 1,048
(E) NOTHING IN DIVISIONS (A) TO (D) OF THIS SECTION 1,051
AUTHORIZES AN EXEMPTION FOR ANY REAL OR PERSONAL PROPERTY OWNED, 1,052
OPERATED, OR USED BY A CABLE OPERATOR OR A GOVERNMENTAL CABLE 1,053
OPERATOR AS THOSE TERMS ARE DEFINED IN SECTION 1771.01 OF THE 1,054
REVISED CODE, OR AUTHORIZES AN EXEMPTION FOR ANY PERSONAL
PROPERTY USED IN BUSINESS AS DEFINED IN DIVISION (E) OF SECTION 1,055
5701.08 OF THE REVISED CODE.
Sec. 5709.121. Real property and tangible personal 1,064
property belonging to a charitable or educational institution or 1,065
to the state or a political subdivision, shall be considered as 1,066
used exclusively for charitable or public purposes by such 1,067
institution, the state, or political subdivision, if it meets one 1,068
of the following requirements: 1,069
(A) It is used by such institution, the state, or 1,071
political subdivision, or by one or more other such institutions, 1,072
the state, or political subdivisions under a lease, sublease, or 1,073
other contractual arrangement: 1,074
(1) As a community or area center in which presentations 1,076
in music, dramatics, the arts, and related fields are made in 1,077
order to foster public interest and education therein; 1,078
(2) For other charitable, educational, or public purposes; 1,080
(B) It is made available under the direction or control of 1,082
26
such institution, the state, or political subdivision for use in 1,083
furtherance of or incidental to its charitable, edcuational 1,084
EDUCATIONAL, or public purposes and not with the view to profit. 1,086
(C) It is used by an organization described in division 1,088
(D) of section 5709.12 of the Revised Code. 1,089
NOTHING IN THIS SECTION AUTHORIZES AN EXEMPTION FOR ANY 1,092
REAL OR PERSONAL PROPERTY OWNED, OPERATED, OR USED BY A CABLE 1,093
OPERATOR OR A GOVERNMENTAL CABLE OPERATOR AS THOSE TERMS ARE
DEFINED IN SECTION 1771.01 OF THE REVISED CODE, OR AUTHORIZES AN 1,094
EXEMPTION FOR ANY PERSONAL PROPERTY USED IN BUSINESS AS DEFINED 1,095
IN DIVISION (E) OF SECTION 5701.08 OF THE REVISED CODE.
Sec. 5733.01. (A) The tax provided by this chapter for 1,104
domestic corporations shall be the amount charged against each 1,105
corporation organized for profit under the laws of this state 1,107
and, each nonprofit corporation organized pursuant to Chapter
1729. of the Revised Code, AND EACH CORPORATION THAT IS A CABLE 1,108
OPERATOR OR GOVERNMENTAL CABLE OPERATOR AS THOSE TERMS ARE 1,109
DEFINED IN SECTION 1771.01 OF THE REVISED CODE, except as 1,110
provided in sections 5733.09 and 5733.10 of the Revised Code, for 1,111
the privilege of exercising its franchise during the calendar 1,112
year in which that amount is payable, and the. THE tax provided 1,113
by this chapter for foreign corporations shall be the amount 1,115
charged against each corporation organized for profit and each 1,116
nonprofit corporation organized or operating in the same or 1,117
similar manner as nonprofit corporations organized under Chapter 1,118
1729. of the Revised Code, under the laws of any state or country 1,119
other than this state, except as provided in sections 5733.09 and 1,120
5733.10 of the Revised Code, for the privilege of doing business 1,121
in this state, owning or using a part or all of its capital or 1,122
property in this state, holding a certificate of compliance with 1,123
the laws of this state authorizing it to do business in this 1,124
state, or otherwise having nexus in or with this state under the 1,126
Constitution of the United States, during the calendar year in 1,130
which that amount is payable. 1,131
27
(B) A corporation is subject to the tax imposed by section 1,133
5733.06 of the Revised Code for each calendar year that it is so 1,134
organized, doing business, owning or using a part or all of its 1,136
capital or property, holding a certificate of compliance, or 1,137
otherwise having nexus in or with this state under the 1,139
Constitution of the United States, on the first day of January of 1,144
that calendar year.
(C) Any corporation subject to this chapter that is not 1,146
subject to the federal income tax shall file its returns and 1,147
compute its tax liability as required by this chapter in the same 1,148
manner as if that corporation were subject to the federal income 1,149
tax. 1,150
(D) For purposes of this chapter, a federally chartered 1,152
financial institution shall be deemed to be organized under the 1,153
laws of the state within which its principal office is located. 1,154
(E) Any person, as defined in section 5701.01 of the 1,157
Revised Code, shall be treated as a corporation for purposes of 1,158
this chapter if the person is classified for federal income tax 1,160
purposes as an association taxable as a corporation.
Sec. 5739.01. As used in this chapter: 1,169
(A) "Person" includes individuals, receivers, assignees, 1,171
trustees in bankruptcy, estates, firms, partnerships, 1,172
associations, joint-stock companies, joint ventures, clubs, 1,173
societies, corporations, the state and its political 1,174
subdivisions, and combinations of individuals of any form. 1,175
(B) "Sale" and "selling" include all of the following 1,177
transactions for a consideration in any manner, whether 1,178
absolutely or conditionally, whether for a price or rental, in 1,179
money or by exchange, and by any means whatsoever: 1,180
(1) All transactions by which title or possession, or 1,182
both, of tangible personal property, is or is to be transferred, 1,183
or a license to use or consume tangible personal property is or 1,184
is to be granted; 1,185
(2) All transactions by which lodging by a hotel is or is 1,187
28
to be furnished to transient guests; 1,188
(3) All transactions by which: 1,190
(a) An item of tangible personal property is or is to be 1,192
repaired, except property, the purchase of which would be exempt 1,193
from the tax imposed by section 5739.02 of the Revised Code; 1,194
(b) An item of tangible personal property is or is to be 1,196
installed, except property, the purchase of which would be exempt 1,197
from the tax imposed by section 5739.02 of the Revised Code or 1,198
property that is or is to be incorporated into and will become a 1,199
part of a production, transmission, transportation, or 1,200
distribution system for the delivery of a public utility service; 1,201
(c) The service of washing, cleaning, waxing, polishing, 1,203
or painting a motor vehicle is or is to be furnished; 1,204
(d) Industrial laundry cleaning services are or are to be 1,206
provided; 1,207
(e) Automatic data processing, computer services, or 1,209
electronic information services are or are to be provided for use 1,210
in business when the true object of the transaction is the 1,211
receipt by the consumer of automatic data processing, computer 1,212
services, or electronic information services rather than the 1,213
receipt of personal or professional services to which automatic 1,214
data processing, computer services, or electronic information 1,215
services are incidental or supplemental. Notwithstanding any 1,216
other provision of this chapter, such transactions that occur 1,217
between members of an affiliated group are not sales. An 1,218
affiliated group means two or more persons related in such a way 1,219
that one person owns or controls the business operation of 1,220
another member of the group. In the case of corporations with 1,221
stock, one corporation owns or controls another if it owns more 1,222
than fifty per cent of the other corporation's common stock with 1,223
voting rights. 1,224
(f) Telecommunications service is provided that originates 1,226
or terminates in this state and is charged in the records of the 1,227
telecommunications service vendor to the consumer's telephone 1,228
29
number or account in this state, or that both originates and 1,229
terminates in this state; 1,230
(g) Landscaping and lawn care service is or is to be 1,232
provided; 1,233
(h) Private investigation and security service is or is to 1,235
be provided; 1,236
(i) Information services or tangible personal property is 1,238
provided or ordered by means of a nine hundred telephone call; 1,239
(j) Building maintenance and janitorial service is or is 1,241
to be provided; 1,242
(k) Employment service is or is to be provided; 1,244
(l) Employment placement service is or is to be provided; 1,246
(m) Exterminating service is or is to be provided; 1,248
(n) Physical fitness facility service is or is to be 1,250
provided; 1,251
(o) Recreation and sports club service is or is to be 1,253
provided. 1,254
(4) All transactions by which printed, imprinted, 1,256
overprinted, lithographic, multilithic, blueprinted, photostatic, 1,257
or other productions or reproductions of written or graphic 1,258
matter are or are to be furnished or transferred; 1,259
(5) The production or fabrication of tangible personal 1,261
property for a consideration for consumers who furnish either 1,262
directly or indirectly the materials used in the production of 1,263
fabrication work; and include the furnishing, preparing, or 1,264
serving for a consideration of any tangible personal property 1,265
consumed on the premises of the person furnishing, preparing, or 1,266
serving such tangible personal property. Except as provided in 1,267
section 5739.03 of the Revised Code, a construction contract 1,268
pursuant to which tangible personal property is or is to be 1,269
incorporated into a structure or improvement on and becoming a 1,270
part of real property is not a sale of such tangible personal 1,271
property. The construction contractor is the consumer of such 1,272
tangible personal property, provided that the sale and 1,273
30
installation of carpeting, the sale and installation of 1,274
agricultural land tile, the sale and erection or installation of 1,275
portable grain bins, or the provision of landscaping and lawn 1,276
care service and the transfer of property as part of such service 1,277
is never a construction contract. The transfer of copyrighted 1,278
motion picture films for exhibition purposes is not a sale, 1,279
except such films as are used solely for advertising purposes. 1,280
Other than as provided in this section, "sale" and "selling" do 1,281
not include professional, insurance, or personal service 1,282
transactions which involve the transfer of tangible personal 1,283
property as an inconsequential element, for which no separate 1,284
charges are made. 1,285
As used in division (B)(5) of this section: 1,287
(a) "Agricultural land tile" means fired clay or concrete 1,289
tile, or flexible or rigid perforated plastic pipe or tubing, 1,290
incorporated or to be incorporated into a subsurface drainage 1,291
system appurtenant to land used or to be used directly in 1,292
production by farming, agriculture, horticulture, or 1,293
floriculture. The term does not include such materials when they 1,294
are or are to be incorporated into a drainage system appurtenant 1,295
to a building or structure even if the building or structure is 1,296
used or to be used in such production. 1,297
(b) "Portable grain bin" means a structure that is used or 1,299
to be used by a person engaged in farming or agriculture to 1,300
shelter the person's grain and that is designed to be 1,301
disassembled without significant damage to its component parts. 1,302
(6) All transactions in which all of the shares of stock 1,304
of a closely held corporation are transferred, if the corporation 1,305
is not engaging in business and its entire assets consist of 1,306
boats, planes, motor vehicles, or other tangible personal 1,307
property operated primarily for the use and enjoyment of the 1,308
shareholders; 1,309
(7) All transactions in which a warranty, maintenance or 1,311
service contract, or similar agreement by which the vendor of the 1,312
31
warranty, contract, or agreement agrees to repair or maintain the 1,313
tangible personal property of the consumer is or is to be 1,314
provided. 1,315
(C) "Vendor" means the person providing the service or by 1,317
whom the transfer effected or license given by a sale is or is to 1,318
be made or given and, for sales described in division (B)(3)(i) 1,319
of this section, the telecommunications service vendor that 1,320
provides the nine hundred telephone service; if two or more 1,321
persons are engaged in business at the same place of business 1,322
under a single trade name in which all collections on account of 1,323
sales by each are made, such persons shall constitute a single 1,324
vendor. 1,325
Physicians, dentists, hospitals, and veterinarians who are 1,327
engaged in selling tangible personal property as received from 1,328
others, such as eyeglasses, mouthwashes, dentifrices, or similar 1,329
articles, are vendors. Veterinarians who are engaged in 1,330
transferring to others for a consideration drugs, the dispensing 1,331
of which does not require an order of a licensed veterinarian or 1,332
physician under federal law, are vendors. 1,333
(D)(1) "Consumer" means the person for whom the service is 1,335
provided, to whom the transfer effected or license given by a 1,336
sale is or is to be made or given, to whom the service described 1,337
in division (B)(3)(f) or (i) of this section is charged, or to 1,338
whom the admission is granted. 1,339
(2) Physicians, dentists, hospitals, and blood banks 1,341
operated by nonprofit institutions and persons licensed to 1,342
practice veterinary medicine, surgery, and dentistry are 1,343
consumers of all tangible personal property and services 1,344
purchased by them in connection with the practice of medicine, 1,345
dentistry, the rendition of hospital or blood bank service, or 1,346
the practice of veterinary medicine, surgery, and dentistry. In 1,347
addition to being consumers of drugs administered by them or by 1,348
their assistants according to their direction, veterinarians also 1,349
are consumers of drugs that under federal law may be dispensed 1,350
32
only by or upon the order of a licensed veterinarian or 1,351
physician, when transferred by them to others for a consideration 1,352
to provide treatment to animals as directed by the veterinarian. 1,353
(3) A person who performs a facility management, or 1,355
similar service contract for a contractee is a consumer of all 1,356
tangible personal property and services purchased for use in 1,357
connection with the performance of such contract, regardless of 1,358
whether title to any such property vests in the contractee. The 1,359
purchase of such property and services is not subject to the 1,360
exception for resale under division (E)(1) of this section. 1,361
(4)(a) In the case of a person who purchases printed 1,363
matter for the purpose of distributing it or having it 1,364
distributed to the public or to a designated segment of the 1,365
public, free of charge, that person is the consumer of that 1,366
printed matter, and the purchase of that printed matter for that 1,367
purpose is a sale.
(b) In the case of a person who produces, rather than 1,369
purchases, printed matter for the purpose of distributing it or 1,370
having it distributed to the public or to a designated segment of 1,371
the public, free of charge, that person is the consumer of all 1,372
tangible personal property and services purchased for use or 1,373
consumption in the production of that printed matter. That 1,374
person is not entitled to claim exception under division (E)(8) 1,375
of this section for any material incorporated into the printed
matter or any equipment, supplies, or services primarily used to 1,376
produce the printed matter. 1,377
(c) The distribution of printed matter to the public or to 1,380
a designated segment of the public, free of charge, is not a sale 1,381
to the members of the public to whom the printed matter is 1,382
distributed or to any persons who purchase space in the printed
matter for advertising or other purposes. 1,383
(5) A person who makes sales of any of the services listed 1,385
in division (B)(3) of this section is the consumer of any 1,386
tangible personal property used in performing the service. The 1,387
33
purchase of that property is not subject to the resale exception 1,388
under division (E)(1) of this section. 1,389
(E) "Retail sale" and "sales at retail" include all sales 1,391
except those in which the purpose of the consumer is: 1,392
(1) To resell the thing transferred or benefit of the 1,394
service provided, by a person engaging in business, in the form 1,395
in which the same is, or is to be, received by the person; 1,396
(2) To incorporate the thing transferred as a material or 1,398
a part, into tangible personal property to be produced for sale 1,399
by manufacturing, assembling, processing, or refining, or to use 1,400
or consume the thing transferred directly in producing a product 1,401
for sale by mining, including without limitation the extraction 1,403
from the earth of all substances which are classed geologically 1,404
as minerals, production of crude oil and natural gas, farming, 1,405
agriculture, horticulture, or floriculture, and persons engaged 1,406
in rendering farming, agricultural, horticultural, or 1,407
floricultural services, and services in the exploration for, and 1,408
production of, crude oil and natural gas, for others are deemed 1,409
engaged directly in farming, agriculture, horticulture, and 1,410
floriculture, or exploration for, and production of, crude oil 1,411
and natural gas; directly in the rendition of a public utility 1,412
service, except that the sales tax levied by section 5739.02 of 1,413
the Revised Code shall be collected upon all meals, drinks, and 1,414
food for human consumption sold upon Pullman and railroad 1,415
coaches. This paragraph does not exempt or except from "retail 1,416
sale" or "sales at retail" the sale of tangible personal property 1,417
that is to be incorporated into a structure or improvement to 1,418
real property.
(3) To hold the thing transferred as security for the 1,420
performance of an obligation of the vendor; 1,421
(4) To use or consume the thing transferred in the process 1,423
of reclamation as required by Chapters 1513. and 1514. of the 1,424
Revised Code; 1,425
(5) To resell, hold, use, or consume the thing transferred 1,427
34
as evidence of a contract of insurance; 1,428
(6) To use or consume the thing directly in commercial 1,430
fishing; 1,431
(7) To incorporate the thing transferred as a material or 1,433
a part into, or to use or consume the thing transferred directly 1,434
in the production of, magazines distributed as controlled 1,435
circulation publications; 1,436
(8) To use or consume the thing transferred in the 1,438
production and preparation in suitable condition for market and 1,439
sale of printed, imprinted, overprinted, lithographic, 1,440
multilithic, blueprinted, photostatic, or other productions or 1,441
reproductions of written or graphic matter; 1,442
(9) To use the thing transferred, as described in section 1,444
5739.011 of the Revised Code, primarily in a manufacturing 1,445
operation to produce tangible personal property for sale; 1,446
(10) To use the benefit of a warranty, maintenance or 1,448
service contract, or similar agreement, as defined in division 1,449
(B)(7) of this section, to repair or maintain tangible personal 1,450
property, if all of the property that is the subject of the 1,451
warranty, contract, or agreement would be exempt on its purchase 1,452
from the tax imposed by section 5739.02 of the Revised Code; 1,453
(11) To use the thing transferred as qualified research 1,455
and development equipment; 1,456
(12) To use or consume the thing transferred primarily in 1,458
storing, transporting, mailing, or otherwise handling purchased 1,459
sales inventory in a warehouse, distribution center, or similar 1,460
facility when the inventory is primarily distributed outside this 1,461
state to retail stores of the person who owns or controls the 1,462
warehouse, distribution center, or similar facility, to retail 1,463
stores of an affiliated group of which that person is a member, 1,464
or by means of direct marketing. Division (E)(12) of this 1,465
section does not apply to motor vehicles registered for operation 1,466
on the public highways. As used in division (E)(12) of this 1,467
section, "affiliated group" has the same meaning as in division 1,468
35
(B)(3)(e) of this section and "direct marketing" has the same 1,469
meaning as in division (B)(37) of section 5739.02 of the Revised 1,470
Code. 1,471
(13) To use or consume the thing transferred to fulfill a 1,473
contractual obligation incurred by a warrantor pursuant to a 1,474
warranty provided as a part of the price of the tangible personal 1,475
property sold or by a vendor of a warranty, maintenance or 1,476
service contract, or similar agreement the provision of which is 1,477
defined as a sale under division (B)(7) of this section; 1,478
(14) To use or consume the thing transferred in the 1,480
production of a newspaper for distribution to the public; 1,481
(15) To use tangible personal property to perform a 1,483
service listed in division (B)(3) of this section, if the 1,484
property is or is to be permanently transferred to the consumer 1,485
of the service as an integral part of the performance of the 1,486
service.
As used in division (E) of this section, "thing" includes 1,488
all transactions included in divisions (B)(3)(a), (b), and (e) of 1,490
this section.
Sales conducted through a coin-operated device that 1,492
activates vacuum equipment or equipment that dispenses water, 1,493
whether or not in combination with soap or other cleaning agents 1,494
or wax, to the consumer for the consumer's use on the premises in 1,496
washing, cleaning, or waxing a motor vehicle, provided no other
personal property or personal service is provided as part of the 1,497
transaction, are not retail sales or sales at retail. 1,498
(F) "Business" includes any activity engaged in by any 1,500
person with the object of gain, benefit, or advantage, either 1,501
direct or indirect. "Business" does not include the activity of 1,502
a person in managing and investing the person's own funds. 1,503
(G) "Engaging in business" means commencing, conducting, 1,505
or continuing in business, and liquidating a business when the 1,506
liquidator thereof holds self out to the public as conducting 1,508
such business. Making a casual sale is not engaging in business.
36
(H)(1) "Price," except as provided in divisions (H)(2) and 1,510
(3) of this section, means the aggregate value in money of 1,511
anything paid or delivered, or promised to be paid or delivered, 1,512
in the complete performance of a retail sale, without any 1,513
deduction on account of the cost of the property sold, cost of 1,514
materials used, labor or service cost, interest, discount paid or 1,515
allowed after the sale is consummated, or any other expense. If 1,516
the retail sale consists of the rental or lease of tangible 1,517
personal property, "price" means the aggregate value in money of 1,518
anything paid or delivered, or promised to be paid or delivered, 1,519
in the complete performance of the rental or lease, without any 1,520
deduction for tax, interest, labor or service charge, damage 1,521
liability waiver, termination or damage charge, discount paid or 1,522
allowed after the lease is consummated, or any other expense. The 1,524
sales tax shall be calculated and collected by the lessor on each 1,525
payment made by the lessee. Price does not include the
consideration received as a deposit refundable to the consumer 1,526
upon return of a beverage container, the consideration received 1,527
as a deposit on a carton or case that is used for such returnable 1,528
containers, or the consideration received as a refundable 1,529
security deposit for the use of tangible personal property to the 1,530
extent that it actually is refunded, if the consideration for 1,531
such refundable deposit is separately stated from the 1,532
consideration received or to be received for the tangible 1,533
personal property transferred in the retail sale. Such 1,534
separation must appear in the sales agreement or on the initial 1,535
invoice or initial billing rendered by the vendor to the 1,536
consumer. Price is the amount received inclusive of the tax, 1,537
provided the vendor establishes to the satisfaction of the tax 1,538
commissioner that the tax was added to the price. When the price 1,539
includes both a charge for tangible personal property and a 1,540
charge for providing a service and the sale of the property and 1,541
the charge for the service are separately taxable, or have a 1,542
separately determinable tax status, the price shall be separately 1,543
37
stated for each such charge so the tax can be correctly computed 1,544
and charged. 1,545
The tax collected by the vendor from the consumer under 1,547
this chapter is not part of the price, but is a tax collection 1,548
for the benefit of the state and of counties levying an 1,549
additional sales tax pursuant to section 5739.021 or 5739.026 of 1,550
the Revised Code and of transit authorities levying an additional 1,551
sales tax pursuant to section 5739.023 of the Revised Code. 1,552
Except for the discount authorized in section 5739.12 of the 1,553
Revised Code, no person other than the state or such a county or 1,554
transit authority shall derive any benefit from the collection or 1,555
payment of such tax. 1,556
(2) In the case of a sale of any new motor vehicle by a 1,558
new motor vehicle dealer, as defined in section 4517.01 of the 1,559
Revised Code, in which another motor vehicle is accepted by the 1,560
dealer as part of the consideration received, "price" has the 1,561
same meaning as in division (H)(1) of this section, reduced by 1,562
the credit afforded the consumer by the dealer for the motor 1,563
vehicle received in trade. 1,564
(3) In the case of a sale of any watercraft or outboard 1,566
motor by a watercraft dealer licensed in accordance with section 1,567
1547.543 of the Revised Code, in which another watercraft, 1,568
watercraft and trailer, or outboard motor is accepted by the 1,569
dealer as part of the consideration received, "price" has the 1,570
same meaning as in division (H)(1) of this section, reduced by 1,571
the credit afforded the consumer by the dealer for the 1,572
watercraft, watercraft and trailer, or outboard motor received in 1,573
trade. As used in division (H)(3) of this section, "watercraft" 1,574
includes an outdrive unit attached to the watercraft. 1,575
(I) "Receipts" means the total amount of the prices of the 1,577
sales of vendors, provided that cash discounts allowed and taken 1,578
on sales at the time they are consummated are not included, minus 1,579
any amount deducted as a bad debt pursuant to section 5739.121 of 1,580
the Revised Code. "Receipts" does not include the sale price of 1,581
38
property returned or services rejected by consumers when the full 1,582
sale price and tax are refunded either in cash or by credit. 1,583
(J) "Place of business" means any location at which a 1,585
person engages in business. 1,586
(K) "Premises" includes any real property or portion 1,588
thereof upon which any person engages in selling tangible 1,589
personal property at retail or making retail sales and also 1,590
includes any real property or portion thereof designated for, or 1,591
devoted to, use in conjunction with the business engaged in by 1,592
such person. 1,593
(L) "Casual sale" means a sale of an item of tangible 1,595
personal property which was obtained by the person making the 1,596
sale, through purchase or otherwise, for the person's own use in 1,597
this state and which was previously subject to the state's taxing 1,598
jurisdiction on its sale or use, and includes such items acquired 1,599
for the seller's use which are sold by an auctioneer employed 1,600
directly by the person for such purpose, provided the location of 1,601
such sales is not the auctioneer's permanent place of business. 1,602
As used in this division, "permanent place of business" includes 1,603
any location where such auctioneer has conducted more than two 1,604
auctions during the year. 1,605
(M) "Hotel" means every establishment kept, used, 1,607
maintained, advertised or held out to the public to be a place 1,608
where sleeping accommodations are offered to guests, in which 1,609
five or more rooms are used for the accommodation of such guests, 1,610
whether such rooms are in one or several structures. 1,611
(N) "Transient guests" means persons occupying a room or 1,613
rooms for sleeping accommodations for less than thirty 1,614
consecutive days. 1,615
(O) "Making retail sales" means the effecting of 1,617
transactions wherein one party is obligated to pay the price and 1,618
the other party is obligated to provide a service or to transfer 1,619
title to or possession of the item sold. "Making retail sales" 1,620
does not include the preliminary acts of promoting or soliciting 1,621
39
the retail sales, other than the distribution of printed matter 1,622
which displays or describes and prices the item offered for sale, 1,623
nor does it include delivery of a predetermined quantity of 1,624
tangible personal property or transportation of property or 1,625
personnel to or from a place where a service is performed, 1,626
regardless of whether the vendor is a delivery vendor. 1,627
(P) "Used directly in the rendition of a public utility 1,629
service" means that property which is to be incorporated into and 1,630
will become a part of the consumer's production, transmission, 1,631
transportation, or distribution system and which retains its 1,632
classification as tangible personal property after such 1,633
incorporation; fuel or power used in the production, 1,634
transmission, transportation, or distribution system; and 1,635
tangible personal property used in the repair and maintenance of 1,636
the production, transmission, transportation or distribution 1,637
system, including only such motor vehicles as are specially 1,638
designed and equipped for such use. Tangible personal property 1,639
and services used primarily in providing highway transportation 1,640
for hire are not used in providing a public utility service as 1,641
defined in this division. 1,642
(Q) "Refining" means removing or separating a desirable 1,644
product from raw or contaminated materials by distillation or 1,645
physical, mechanical, or chemical processes. 1,646
(R) "Assembly" and "assembling" mean attaching or fitting 1,648
together parts to form a product, but do not include packaging a 1,649
product. 1,650
(S) "Manufacturing operation" means a process in which 1,652
materials are changed, converted, or transformed into a different 1,653
state or form from which they previously existed and includes 1,654
refining materials, assembling parts, and preparing raw materials 1,655
and parts by mixing, measuring, blending, or otherwise committing 1,656
such materials or parts to the manufacturing process. 1,657
"Manufacturing operation" does not include packaging. 1,658
(T) "Fiscal officer" means, with respect to a regional 1,660
40
transit authority, the secretary-treasurer thereof, and with 1,661
respect to a county which is a transit authority, the fiscal 1,662
officer of the county transit board if one is appointed pursuant 1,663
to section 306.03 of the Revised Code or the county auditor if 1,664
the board of county commissioners operates the county transit 1,665
system.
(U) "Transit authority" means a regional transit authority 1,667
created pursuant to section 306.31 of the Revised Code or a 1,668
county in which a county transit system is created pursuant to 1,669
section 306.01 of the Revised Code. For the purposes of this 1,670
chapter, a transit authority must extend to at least the entire 1,671
area of a single county. A transit authority which includes 1,672
territory in more than one county must include all the area of 1,673
the most populous county which is a part of such transit 1,674
authority. County population shall be measured by the most 1,675
recent census taken by the United States census bureau. 1,676
(V) "Legislative authority" means, with respect to a 1,678
regional transit authority, the board of trustees thereof, and 1,679
with respect to a county which is a transit authority, the board 1,680
of county commissioners. 1,681
(W) "Territory of the transit authority" means all of the 1,683
area included within the territorial boundaries of a transit 1,684
authority as they from time to time exist. Such territorial 1,685
boundaries must at all times include all the area of a single 1,686
county or all the area of the most populous county which is a 1,687
part of such transit authority. County population shall be 1,688
measured by the most recent census taken by the United States 1,689
census bureau. 1,690
(X) "Providing a service" means providing or furnishing 1,692
anything described in division (B)(3) of this section for 1,693
consideration. 1,694
(Y)(1)(a) "Automatic data processing" means processing of 1,696
others' data, including keypunching or similar data entry 1,697
services together with verification thereof, or providing access 1,698
41
to computer equipment for the purpose of processing data. 1,699
(b) "Computer services" means providing services 1,701
consisting of specifying computer hardware configurations and 1,702
evaluating technical processing characteristics, computer 1,703
programming, and training of computer programmers and operators, 1,704
provided in conjunction with and to support the sale, lease, or 1,705
operation of taxable computer equipment or systems. 1,706
(c) "Electronic information services" means providing 1,708
access to computer equipment by means of telecommunications 1,709
equipment for the purpose of either of the following: 1,710
(i) Examining or acquiring data stored in or accessible to 1,712
the computer equipment; 1,713
(ii) Placing data into the computer equipment to be 1,715
retrieved by designated recipients with access to the computer 1,716
equipment. 1,717
(d) "Automatic data processing, computer services, or 1,719
electronic information services" shall not include personal or 1,720
professional services. 1,721
(2) As used in divisions (B)(3)(e) and (Y)(1) of this 1,723
section, "personal and professional services" means all services 1,724
other than automatic data processing, computer services, or 1,725
electronic information services, including but not limited to: 1,726
(a) Accounting and legal services such as advice on tax 1,728
matters, asset management, budgetary matters, quality control, 1,729
information security, and auditing and any other situation where 1,730
the service provider receives data or information and studies, 1,731
alters, analyzes, interprets, or adjusts such material; 1,732
(b) Analyzing business policies and procedures; 1,734
(c) Identifying management information needs; 1,736
(d) Feasibility studies including economic and technical 1,738
analysis of existing or potential computer hardware or software 1,739
needs and alternatives; 1,740
(e) Designing policies, procedures, and custom software 1,742
for collecting business information, and determining how data 1,743
42
should be summarized, sequenced, formatted, processed, controlled 1,744
and reported so that it will be meaningful to management; 1,745
(f) Developing policies and procedures that document how 1,747
business events and transactions are to be authorized, executed, 1,748
and controlled; 1,749
(g) Testing of business procedures; 1,751
(h) Training personnel in business procedure applications; 1,753
(i) Providing credit information to users of such 1,755
information by a consumer reporting agency, as defined in the 1,756
"Fair Credit Reporting Act," 84 Stat. 1114, 1129 (1970), 15 1,757
U.S.C. 1681a(f), or as hereafter amended, including but not 1,758
limited to gathering, organizing, analyzing, recording, and 1,759
furnishing such information by any oral, written, graphic, or 1,760
electronic medium; 1,761
(j) Providing debt collection services by any oral, 1,763
written, graphic, or electronic means. 1,764
The services listed in divisions (Y)(2)(a) to (j) of this 1,766
section are not automatic data processing or computer services. 1,767
(Z) "Highway transportation for hire" means the 1,769
transportation of personal property belonging to others for 1,770
consideration by any of the following: 1,771
(1) The holder of a permit or certificate issued by this 1,773
state or the United States authorizing the holder to engage in 1,774
transportation of personal property belonging to others for 1,775
consideration over or on highways, roadways, streets, or any 1,776
similar public thoroughfare; 1,777
(2) A person who engages in the transportation of personal 1,779
property belonging to others for consideration over or on 1,780
highways, roadways, streets, or any similar public thoroughfare 1,781
but who could not have engaged in such transportation on December 1,782
11, 1985, unless the person was the holder of a permit or 1,783
certificate of the types described in division (Z)(1) of this 1,784
section;
(3) A person who leases a motor vehicle to and operates it 1,786
43
for a person described by division (Z)(1) or (2) of this section. 1,787
(AA) "Telecommunications service" means the transmission 1,789
of any interactive, two-way electromagnetic communications, 1,790
including voice, image, data, and information, through the use of 1,791
any medium such as wires, cables, microwaves, cellular radio, 1,792
radio waves, light waves, or any combination of those or similar 1,793
media. "Telecommunications service" includes message toll 1,794
service even though the vendor provides the message toll service 1,795
by means of wide area transmission type service or private 1,796
communications service purchased from another telecommunications 1,797
service provider, but does not include any of the following: 1,798
(1) Sales of incoming or outgoing wide area transmission 1,800
service or wide area transmission type service, including eight 1,801
hundred or eight-hundred-type service, to the person contracting 1,802
for the receipt of that service; 1,803
(2) Sales of private communications service to the person 1,805
contracting for the receipt of that service that entitles the 1,806
purchaser to exclusive or priority use of a communications 1,807
channel or group of channels between exchanges; 1,808
(3) Sales of telecommunications service by companies 1,810
subject to the excise tax imposed by Chapter 5727. of the Revised 1,811
Code; 1,812
(4) Sales of telecommunications service to a provider of 1,814
telecommunications service, including access services, for use in 1,815
providing telecommunications service; 1,816
(5) Value added nonvoice services in which computer 1,818
processing applications are used to act on the form, content, 1,819
code, or protocol of the information to be transmitted; 1,820
(6) Transmission of interactive video programming by a 1,822
cable television system as defined in section 505.90 of the 1,823
Revised Code, INCLUDING SUCH TRANSMISSION BY A CABLE OPERATOR OR 1,824
A GOVERNMENTAL CABLE OPERATOR AS THOSE TERMS ARE DEFINED IN 1,825
SECTION 1771.01 OF THE REVISED CODE. 1,826
(BB) "Industrial laundry cleaning services" means removing 1,828
44
soil or dirt from or supplying towels, linens, or articles of 1,829
clothing that belong to others and are used in a trade or 1,830
business. 1,831
(CC) "Magazines distributed as controlled circulation 1,833
publications" means magazines containing at least twenty-four 1,834
pages, at least twenty-five per cent editorial content, issued at 1,835
regular intervals four or more times a year, and circulated 1,836
without charge to the recipient, provided that such magazines are 1,837
not owned or controlled by individuals or business concerns which 1,838
conduct such publications as an auxiliary to, and essentially for 1,839
the advancement of the main business or calling of, those who own 1,840
or control them. 1,841
(DD) "Landscaping and lawn care service" means the 1,843
services of planting, seeding, sodding, removing, cutting, 1,844
trimming, pruning, mulching, aerating, applying chemicals, 1,845
watering, fertilizing, and providing similar services to 1,846
establish, promote, or control the growth of trees, shrubs, 1,847
flowers, grass, ground cover, and other flora, or otherwise 1,848
maintaining a lawn or landscape grown or maintained by the owner 1,849
for ornamentation or other nonagricultural purpose. However, 1,850
"landscaping and lawn care service" does not include the 1,851
providing of such services by a person who has less than five 1,852
thousand dollars in sales of such services during the calendar 1,853
year. 1,854
(EE) "Private investigation and security service" means 1,856
the performance of any activity for which the provider of such 1,857
service is required to be licensed pursuant to Chapter 4749. of 1,858
the Revised Code, or would be required to be so licensed in 1,859
performing such services in this state, and also includes the 1,860
services of conducting polygraph examinations and of monitoring 1,861
or overseeing the activities on or in, or the condition of, the 1,862
consumer's home, business, or other facility by means of 1,863
electronic or similar monitoring devices. "Private investigation 1,864
and security service" does not include special duty services 1,865
45
provided by off-duty police officers, deputy sheriffs, and other 1,866
peace officers regularly employed by the state or a political 1,867
subdivision. 1,868
(FF) "Information services" means providing conversation, 1,870
giving consultation or advice, playing or making a voice or other 1,871
recording, making or keeping a record of the number of callers, 1,872
and any other service provided to a consumer by means of a nine 1,873
hundred telephone call, except when the nine hundred telephone 1,874
call is the means by which the consumer makes a contribution to a 1,875
recognized charity. 1,876
(GG) "Research and development" means designing, creating, 1,878
or formulating new or enhanced products, equipment, or 1,879
manufacturing processes, and conducting scientific or 1,880
technological inquiry and experimentation in the physical 1,881
sciences with the goal of increasing scientific knowledge which 1,882
may reveal the bases for new or enhanced products, equipment, or 1,883
manufacturing processes. 1,884
(HH) "Qualified research and development equipment" means 1,886
capitalized tangible personal property, and leased personal 1,887
property that would be capitalized if purchased, used by a person 1,888
primarily to perform research and development. Tangible personal 1,889
property primarily used in testing, as defined in division (A)(4) 1,890
of section 5739.011 of the Revised Code, or used for recording or 1,891
storing test results, is not qualified research and development 1,892
equipment unless such property is primarily used by the consumer 1,893
in testing the product, equipment, or manufacturing process being 1,894
created, designed, or formulated by the consumer in the research 1,895
and development activity or in recording or storing such test 1,896
results. 1,897
(II) "Building maintenance and janitorial service" means 1,899
cleaning the interior or exterior of a building and any tangible 1,900
personal property located therein or thereon, including any 1,901
services incidental to such cleaning for which no separate charge 1,902
is made. However, "building maintenance and janitorial service" 1,903
46
does not include the providing of such service by a person who 1,904
has less than five thousand dollars in sales of such service 1,905
during the calendar year. 1,906
(JJ) "Employment service" means providing or supplying 1,908
personnel, on a temporary or long-term basis, to perform work or 1,909
labor under the supervision or control of another, when the 1,910
personnel so supplied receive their wages, salary, or other 1,911
compensation from the provider of the service. "Employment 1,912
service" does not include: 1,913
(1) Acting as a contractor or subcontractor, where the 1,915
personnel performing the work are not under the direct control of 1,916
the purchaser.; 1,917
(2) Medical and health care services.; 1,919
(3) Supplying personnel to a purchaser pursuant to a 1,921
contract of at least one year between the service provider and 1,922
the purchaser that specifies that each employee covered under the 1,923
contract is assigned to the purchaser on a permanent basis.; 1,924
(4) Transactions between members of an affiliated group, 1,926
as defined in division (B)(3)(e) of this section. 1,927
(KK) "Employment placement service" means locating or 1,929
finding employment for a person or finding or locating an 1,930
employee to fill an available position. 1,931
(LL) "Exterminating service" means eradicating or 1,933
attempting to eradicate vermin infestations from a building or 1,934
structure, or the area surrounding a building or structure, and 1,935
includes activities to inspect, detect, or prevent vermin 1,936
infestation of a building or structure. 1,937
(MM) "Physical fitness facility service" means all 1,939
transactions by which a membership is granted, maintained, or 1,940
renewed, including initiation fees, membership dues, renewal 1,941
fees, monthly minimum fees, and other similar fees and dues, by a 1,942
physical fitness facility such as an athletic club, health spa, 1,943
or gymnasium, which entitles the member to use the facility for 1,944
physical exercise. 1,945
47
(NN) "Recreation and sports club service" means all 1,947
transactions by which a membership is granted, maintained, or 1,948
renewed, including initiation fees, membership dues, renewal 1,949
fees, monthly minimum fees, and other similar fees and dues, by a 1,950
recreation and sports club, which entitles the member to use the 1,951
facilities of the organization. "Recreation and sports club" 1,952
means an organization that has ownership of, or controls or 1,953
leases on a continuing, long-term basis, the facilities used by 1,954
its members and includes an aviation club, gun or shooting club, 1,955
yacht club, card club, swimming club, tennis club, golf club, 1,956
country club, riding club, amateur sports club, or similar 1,957
organization. 1,958
(OO) "Livestock" means farm animals commonly raised for 1,960
food or food production, and includes, but is not limited to, 1,961
cattle, sheep, goats, swine, and poultry. "Livestock" does not 1,962
include invertebrates, fish, amphibians, reptiles, horses, 1,963
domestic pets, animals for use in laboratories or for exhibition, 1,964
or other animals not commonly raised for food or food production. 1,965
(PP) "Livestock structure" means a building or structure 1,967
used exclusively for the housing, raising, feeding, or sheltering 1,968
of livestock, and includes feed storage or handling structures 1,969
and structures for livestock waste handling. 1,970
(QQ) "Horticulture" means the growing, cultivation, and 1,972
production of flowers, fruits, herbs, vegetables, sod, mushrooms, 1,973
and nursery stock. As used in this division, "nursery stock" has 1,974
the same meaning as in section 927.51 of the Revised Code. 1,975
(RR) "Horticulture structure" means a building or 1,977
structure used exclusively for the commercial growing, raising, 1,978
or overwintering of horticultural products, and includes the area 1,979
used for stocking, storing, and packing horticultural products 1,980
when done in conjunction with the production of those products. 1,981
(SS) "Newspaper" means an unbound publication bearing a 1,983
title or name that is regularly published, at least as frequently 1,984
as biweekly, and distributed from a fixed place of business to 1,985
48
the public in a specific geographic area, and that contains a 1,986
substantial amount of news matter of international, national, or 1,987
local events of interest to the general public.
(TT) "Professional racing team" means a person that 1,990
employs at least twenty full-time employees for the purpose of 1,991
conducting a motor vehicle racing business for profit. The 1,992
person must conduct the business with the purpose of racing one 1,993
or more motor racing vehicles in at least ten competitive 1,994
professional racing events each year that comprise all or part of 1,995
a motor racing series sanctioned by one or more motor racing 1,996
sanctioning organizations. A "motor racing vehicle" means a 1,997
vehicle for which the chassis, engine, and parts are designed 1,998
exclusively for motor racing, and does not include a stock or 2,000
production model vehicle that may be modified for use in racing. 2,001
For the purposes of this division:
(1) A "competitive professional racing event" is a motor 2,003
vehicle racing event sanctioned by one or more motor racing 2,004
sanctioning organizations, at which aggregate cash prizes in 2,005
excess of eight hundred thousand dollars are awarded to the 2,007
competitors.
(2) "Full-time employee" means an individual who is 2,009
employed for consideration for thirty-five or more hours a week, 2,010
or who renders any other standard of service generally accepted 2,011
by custom or specified by contract as full-time employment. 2,013
Sec. 5739.02. For the purpose of providing revenue with 2,022
which to meet the needs of the state, for the use of the general 2,023
revenue fund of the state, for the purpose of securing a thorough 2,024
and efficient system of common schools throughout the state, for 2,025
the purpose of affording revenues, in addition to those from 2,026
general property taxes, permitted under constitutional 2,027
limitations, and from other sources, for the support of local 2,028
governmental functions, and for the purpose of reimbursing the 2,029
state for the expense of administering this chapter, an excise 2,030
tax is hereby levied on each retail sale made in this state. 2,031
49
(A) The tax shall be collected pursuant to the schedules 2,033
in section 5739.025 of the Revised Code. 2,034
The tax applies and is collectible when the sale is made, 2,036
regardless of the time when the price is paid or delivered. 2,037
In the case of a sale, the price of which consists in whole 2,039
or in part of rentals for the use of the thing transferred, the 2,040
tax, as regards such rentals, shall be measured by the 2,041
installments thereof. 2,042
In the case of a sale of a service defined under division 2,044
(MM) or (NN) of section 5739.01 of the Revised Code, the price of 2,045
which consists in whole or in part of a membership for the 2,046
receipt of the benefit of the service, the tax applicable to the 2,047
sale shall be measured by the installments thereof. 2,048
(B) The tax does not apply to the following: 2,050
(1) Sales to the state or any of its political 2,052
subdivisions, or to any other state or its political subdivisions 2,053
if the laws of that state exempt from taxation sales made to this 2,054
state and its political subdivisions;. NOTHING IN DIVISION 2,056
(B)(1) OF THIS SECTION EXEMPTS SALES TO A GOVERNMENTAL CABLE
OPERATOR AS DEFINED IN SECTION 1771.01 OF THE REVISED CODE. 2,057
(2) Sales of food for human consumption off the premises 2,059
where sold; 2,060
(3) Sales of food sold to students only in a cafeteria, 2,062
dormitory, fraternity, or sorority maintained in a private, 2,063
public, or parochial school, college, or university; 2,064
(4) Sales of newspapers, and of magazine subscriptions 2,066
shipped by second class mail, and sales or transfers of magazines 2,067
distributed as controlled circulation publications; 2,068
(5) The furnishing, preparing, or serving of meals without 2,070
charge by an employer to an employee provided the employer 2,071
records the meals as part compensation for services performed or 2,072
work done; 2,073
(6) Sales of motor fuel upon receipt, use, distribution, 2,076
or sale of which in this state a tax is imposed by the law of 2,077
50
this state, but this exemption shall not apply to the sale of 2,078
motor fuel on which a refund of the tax is allowable under 2,079
section 5735.14 of the Revised Code; and the tax commissioner may 2,080
deduct the amount of tax levied by this section applicable to the 2,081
price of motor fuel when granting a refund of motor fuel tax 2,082
pursuant to section 5735.14 of the Revised Code and shall cause 2,083
the amount deducted to be paid into the general revenue fund of 2,084
this state;
(7) Sales of natural gas by a natural gas company, of 2,086
electricity by an electric company, of water by a water-works 2,087
company, or of steam by a heating company, if in each case the 2,088
thing sold is delivered to consumers through wires, pipes, or 2,089
conduits, and all sales of communications services by a telephone 2,090
or telegraph company, all terms as defined in section 5727.01 of 2,091
the Revised Code; 2,092
(8) Casual sales by a person, or auctioneer employed 2,094
directly by the person to conduct such sales, except as to such 2,096
sales of motor vehicles, watercraft or outboard motors required 2,097
to be titled under section 1548.06 of the Revised Code, 2,098
watercraft documented with the United States coast guard, 2,099
snowmobiles, all-purpose vehicles as defined in section 4519.01 2,100
of the Revised Code, and manufactured homes; 2,101
(9) Sales of services or tangible personal property, other 2,103
than motor vehicles and manufactured homes, by churches or by 2,104
nonprofit organizations operated exclusively for charitable 2,105
purposes as defined in division (B)(12) of this section, provided 2,106
that the number of days on which such tangible personal property 2,107
or services, other than items never subject to the tax, are sold 2,108
does not exceed six in any calendar year. If the number of days 2,109
on which such sales are made exceeds six in any calendar year, 2,110
the church or organization shall be considered to be engaged in 2,111
business and all subsequent sales by it shall be subject to the 2,112
tax. In counting the number of days, all sales by groups within 2,113
a church or within an organization shall be considered to be 2,114
51
sales of that church or organization, except that sales made by 2,115
separate student clubs and other groups of students of a primary 2,116
or secondary school, and sales made by a parent-teacher 2,117
association, booster group, or similar organization that raises 2,118
money to support or fund curricular or extracurricular activities 2,119
of a primary or secondary school, shall not be considered to be 2,120
sales of such school, and sales by each such club, group, 2,121
association, or organization shall be counted separately for 2,122
purposes of the six-day limitation. This division does not apply 2,123
to sales by a noncommercial educational radio or television 2,124
broadcasting station. 2,125
NOTHING IN DIVISION (B)(9) OF THIS SECTION SHALL BE DEEMED 2,127
TO EXEMPT SALES BY A GOVERNMENTAL CABLE OPERATOR AS DEFINED IN 2,128
SECTION 1771.01 OF THE REVISED CODE. 2,129
(10) Sales not within the taxing power of this state under 2,131
the Constitution of the United States; 2,132
(11) The transportation of persons or property, unless the 2,134
transportation is by a private investigation and security 2,135
service; 2,136
(12) Sales of tangible personal property or services to 2,138
churches, to organizations exempt from taxation under section 2,139
501(c)(3) of the Internal Revenue Code of 1986, and to any other 2,140
nonprofit organizations operated exclusively for charitable 2,141
purposes in this state, no part of the net income of which inures 2,142
to the benefit of any private shareholder or individual, and no 2,143
substantial part of the activities of which consists of carrying 2,144
on propaganda or otherwise attempting to influence legislation; 2,145
sales to offices administering one or more homes for the aged or 2,146
one or more hospital facilities exempt under section 140.08 of 2,147
the Revised Code; and sales to organizations described in 2,148
division (D) of section 5709.12 of the Revised Code. 2,149
"Charitable purposes" means the relief of poverty; the 2,151
improvement of health through the alleviation of illness, 2,152
disease, or injury; the operation of an organization exclusively 2,154
52
for the provision of professional, laundry, printing, and 2,155
purchasing services to hospitals or charitable institutions; the 2,157
operation of a home for the aged, as defined in section 5701.13 2,158
of the Revised Code; the operation of a radio or television 2,159
broadcasting station that is licensed by the federal 2,160
communications commission as a noncommercial educational radio or 2,161
television station; the operation of a nonprofit animal adoption 2,163
service or a county humane society; the promotion of education by 2,164
an institution of learning that maintains a faculty of qualified 2,165
instructors, teaches regular continuous courses of study, and
confers a recognized diploma upon completion of a specific 2,166
curriculum; the operation of a parent teacher association, 2,167
booster group, or similar organization primarily engaged in the 2,168
promotion and support of the curricular or extracurricular 2,169
activities of a primary or secondary school; the operation of a 2,170
community or area center in which presentations in music, 2,171
dramatics, the arts, and related fields are made in order to 2,172
foster public interest and education therein; the production of 2,173
performances in music, dramatics, and the arts; or the promotion 2,175
of education by an organization engaged in carrying on research
in, or the dissemination of, scientific and technological 2,176
knowledge and information primarily for the public. 2,177
Nothing in this division shall be deemed to exempt sales to 2,179
any organization for use in the operation or carrying on of a 2,180
trade or business, or sales to a home for the aged for use in the 2,181
operation of independent living facilities as defined in division 2,182
(A) of section 5709.12 of the Revised Code. 2,183
NOTHING IN DIVISION (B)(12) OF THIS SECTION SHALL BE DEEMED 2,185
TO EXEMPT SALES BY A GOVERNMENTAL CABLE OPERATOR AS DEFINED IN 2,186
SECTION 1771.01 OF THE REVISED CODE. 2,187
(13) Building and construction materials and services sold 2,189
to construction contractors for incorporation into a structure or 2,190
improvement to real property under a construction contract with 2,191
this state or a political subdivision thereof, or with the United 2,192
53
States government or any of its agencies; building and 2,193
construction materials and services sold to construction 2,194
contractors for incorporation into a structure or improvement to 2,195
real property that are accepted for ownership by this state or 2,197
any of its political subdivisions, or by the United States 2,198
government or any of its agencies at the time of completion of 2,199
such structures or improvements; building and construction 2,200
materials sold to construction contractors for incorporation into 2,201
a horticulture structure or livestock structure for a person 2,202
engaged in the business of horticulture or producing livestock; 2,203
building materials and services sold to a construction contractor 2,204
for incorporation into a house of public worship or religious 2,205
education, or a building used exclusively for charitable purposes 2,206
under a construction contract with an organization whose purpose 2,207
is as described in division (B)(12) of this section; building and 2,208
construction materials sold for incorporation into the original 2,209
construction of a sports facility under section 307.696 of the 2,210
Revised Code; and building and construction materials and 2,211
services sold to a construction contractor for incorporation into 2,212
real property outside this state if such materials and services, 2,213
when sold to a construction contractor in the state in which the 2,214
real property is located for incorporation into real property in 2,215
that state, would be exempt from a tax on sales levied by that 2,216
state; 2,217
(14) Sales of ships or vessels or rail rolling stock used 2,219
or to be used principally in interstate or foreign commerce, and 2,220
repairs, alterations, fuel, and lubricants for such ships or 2,221
vessels or rail rolling stock; 2,222
(15) Sales to persons engaged in any of the activities 2,224
mentioned in division (E)(2) or (9) of section 5739.01 of the 2,225
Revised Code, to persons engaged in making retail sales, or to 2,226
persons who purchase for sale from a manufacturer tangible 2,227
personal property that was produced by the manufacturer in 2,228
accordance with specific designs provided by the purchaser, of 2,229
54
packages, including material and parts for packages, and of 2,230
machinery, equipment, and material for use primarily in packaging 2,231
tangible personal property produced for sale by or on the order 2,232
of the person doing the packaging, or sold at retail. "Packages" 2,233
includes bags, baskets, cartons, crates, boxes, cans, bottles, 2,234
bindings, wrappings, and other similar devices and containers, 2,235
and "packaging" means placing therein. 2,236
(16) Sales of food to persons using food stamp coupons to 2,238
purchase the food. As used in division (B)(16) of this section, 2,239
"food" has the same meaning as in the "Food Stamp Act of 1977," 2,240
91 Stat. 958, 7 U.S.C. 2012, as amended, and federal regulations 2,241
adopted pursuant to that act. 2,242
(17) Sales to persons engaged in farming, agriculture, 2,244
horticulture, or floriculture, of tangible personal property for 2,245
use or consumption directly in the production by farming, 2,246
agriculture, horticulture, or floriculture of other tangible 2,247
personal property for use or consumption directly in the 2,248
production of tangible personal property for sale by farming, 2,249
agriculture, horticulture, or floriculture; or material and parts 2,250
for incorporation into any such tangible personal property for 2,251
use or consumption in production; and of tangible personal 2,252
property for such use or consumption in the conditioning or 2,253
holding of products produced by and for such use, consumption, or 2,254
sale by persons engaged in farming, agriculture, horticulture, or 2,255
floriculture, except where such property is incorporated into 2,256
real property; 2,257
(18) Sales of drugs dispensed by a licensed pharmacist 2,260
upon the order of a licensed health professional authorized to 2,262
prescribe drugs to a human being, as the term "licensed health 2,263
professional authorized to prescribe drugs" is defined in section 2,264
4729.01 of the Revised Code; insulin as recognized in the 2,266
official United States pharmacopoeia; urine and blood testing 2,267
materials when used by diabetics or persons with hypoglycemia to 2,268
test for glucose or acetone; hypodermic syringes and needles when 2,269
55
used by diabetics for insulin injections; epoetin alfa when 2,270
purchased for use in the treatment of persons with end-stage 2,271
renal disease; hospital beds when purchased for use by persons 2,273
with medical problems for medical purposes; and oxygen and 2,274
oxygen-dispensing equipment when purchased for use by persons 2,275
with medical problems for medical purposes;
(19) Sales of artificial limbs or portion thereof, breast 2,277
prostheses, and other prosthetic devices for humans; braces or 2,278
other devices for supporting weakened or nonfunctioning parts of 2,279
the human body; wheelchairs; devices used to lift wheelchairs 2,280
into motor vehicles and parts and accessories to such devices; 2,281
crutches or other devices to aid human perambulation; and items 2,282
of tangible personal property used to supplement impaired 2,283
functions of the human body such as respiration, hearing, or 2,284
elimination. No exemption under this division shall be allowed 2,285
for nonprescription drugs, medicines, or remedies; items or 2,286
devices used to supplement vision; items or devices whose 2,287
function is solely or primarily cosmetic; or physical fitness 2,288
equipment. This division does not apply to sales to a physician 2,289
or medical facility for use in the treatment of a patient. 2,290
(20) Sales of emergency and fire protection vehicles and 2,292
equipment to nonprofit organizations for use solely in providing 2,293
fire protection and emergency services for political subdivisions 2,294
of the state; 2,295
(21) Sales of tangible personal property manufactured in 2,297
this state, if sold by the manufacturer in this state to a 2,298
retailer for use in the retail business of the retailer outside 2,299
of this state and if possession is taken from the manufacturer by 2,301
the purchaser within this state for the sole purpose of 2,302
immediately removing the same from this state in a vehicle owned 2,303
by the purchaser;
(22) Sales of services provided by the state or any of its 2,305
political subdivisions, agencies, instrumentalities, 2,306
institutions, or authorities, or by governmental entities of the 2,307
56
state or any of its political subdivisions, agencies, 2,308
instrumentalities, institutions, or authorities;. 2,309
NOTHING IN DIVISION (B)(22) OF THIS SECTION SHALL BE DEEMED 2,311
TO EXEMPT SALES BY A GOVERNMENTAL CABLE OPERATOR AS DEFINED IN 2,312
SECTION 1771.01 OF THE REVISED CODE. 2,313
(23) Sales of motor vehicles to nonresidents of this state 2,315
upon the presentation of an affidavit executed in this state by 2,316
the nonresident purchaser affirming that the purchaser is a 2,317
nonresident of this state, that possession of the motor vehicle 2,318
is taken in this state for the sole purpose of immediately 2,319
removing it from this state, that the motor vehicle will be 2,320
permanently titled and registered in another state, and that the 2,321
motor vehicle will not be used in this state; 2,322
(24) Sales to persons engaged in the preparation of eggs 2,324
for sale of tangible personal property used or consumed directly 2,325
in such preparation, including such tangible personal property 2,326
used for cleaning, sanitizing, preserving, grading, sorting, and 2,327
classifying by size; packages, including material and parts for 2,328
packages, and machinery, equipment, and material for use in 2,329
packaging eggs for sale; and handling and transportation 2,330
equipment and parts therefor, except motor vehicles licensed to 2,331
operate on public highways, used in intraplant or interplant 2,332
transfers or shipment of eggs in the process of preparation for 2,333
sale, when the plant or plants within or between which such 2,334
transfers or shipments occur are operated by the same person. 2,335
"Packages" includes containers, cases, baskets, flats, fillers, 2,336
filler flats, cartons, closure materials, labels, and labeling 2,337
materials, and "packaging" means placing therein. 2,338
(25)(a) Sales of water to a consumer for residential use, 2,340
except the sale of bottled water, distilled water, mineral water, 2,341
carbonated water, or ice; 2,342
(b) Sales of water by a nonprofit corporation engaged 2,344
exclusively in the treatment, distribution, and sale of water to 2,345
consumers, if such water is delivered to consumers through pipes 2,346
57
or tubing. 2,347
(26) Fees charged for inspection or reinspection of motor 2,349
vehicles under section 3704.14 of the Revised Code; 2,350
(27) Sales of solar, wind, or hydrothermal energy systems 2,352
that meet the guidelines established under division (B) of 2,353
section 1551.20 of the Revised Code, components of such systems 2,354
that are identified under division (B) or (D) of that section, or 2,355
charges for the installation of such systems or components, made 2,356
during the period from August 14, 1979, through December 31, 2,357
1985; 2,358
(28) Sales to persons licensed to conduct a food service 2,360
operation pursuant to section 3732.03 of the Revised Code, of 2,361
tangible personal property primarily used directly for the 2,362
following:
(a) To prepare food for human consumption for sale; 2,364
(b) To preserve food that has been or will be prepared for 2,367
human consumption for sale by the food service operator, not
including tangible personal property used to display food for 2,368
selection by the consumer; 2,369
(c) To clean tangible personal property used to prepare or 2,371
serve food for human consumption for sale. 2,372
(29) Sales of animals by nonprofit animal adoption 2,374
services or county humane societies; 2,375
(30) Sales of services to a corporation described in 2,377
division (A) of section 5709.72 of the Revised Code, and sales of 2,378
tangible personal property that qualifies for exemption from 2,379
taxation under section 5709.72 of the Revised Code; 2,380
(31) Sales and installation of agricultural land tile, as 2,382
defined in division (B)(5)(a) of section 5739.01 of the Revised 2,383
Code; 2,384
(32) Sales and erection or installation of portable grain 2,386
bins, as defined in division (B)(5)(b) of section 5739.01 of the 2,387
Revised Code; 2,388
(33) The sale, lease, repair, and maintenance of; parts 2,390
58
for; or items attached to or incorporated in motor vehicles that 2,391
are primarily used for transporting tangible personal property by 2,392
a person engaged in highway transportation for hire; 2,393
(34) Sales to the state headquarters of any veterans' 2,395
organization in Ohio that is either incorporated and issued a 2,396
charter by the congress of the United States or is recognized by 2,397
the United States veterans administration, for use by the 2,398
headquarters; 2,399
(35) Sales to a telecommunications service vendor of 2,401
tangible personal property and services used directly and 2,402
primarily in transmitting, receiving, switching, or recording any 2,403
interactive, two-way electromagnetic communications, including 2,404
voice, image, data, and information, through the use of any 2,405
medium, including, but not limited to, poles, wires, cables, 2,406
switching equipment, computers, and record storage devices and 2,407
media, and component parts for the tangible personal property. 2,408
The exemption provided in division (B)(35) of this section shall 2,409
be in lieu of all other exceptions under division (E)(2) of 2,410
section 5739.01 of the Revised Code to which a telecommunications 2,411
service vendor may otherwise be entitled based upon the use of 2,412
the thing purchased in providing the telecommunications service. 2,413
(36) Sales of investment metal bullion and investment 2,415
coins. "Investment metal bullion" means any elementary precious 2,416
metal that has been put through a process of smelting or 2,417
refining, including, but not limited to, gold, silver, platinum, 2,418
and palladium, and which is in such state or condition that its 2,419
value depends upon its content and not upon its form. 2,420
"Investment metal bullion" does not include fabricated precious 2,421
metal that has been processed or manufactured for one or more 2,423
specific and customary industrial, professional, or artistic 2,424
uses. "Investment coins" means numismatic coins or other forms 2,425
of money and legal tender manufactured of gold, silver, platinum, 2,426
palladium, or other metal under the laws of the United States or 2,427
any foreign nation with a fair market value greater than any 2,428
59
statutory or nominal value of such coins. 2,429
(37)(a) Sales where the purpose of the consumer is to use 2,431
or consume the things transferred in making retail sales and 2,432
consisting of newspaper inserts, catalogues, coupons, flyers, 2,433
gift certificates, or other advertising material that prices and 2,435
describes tangible personal property offered for retail sale. 2,436
(b) Sales to direct marketing vendors of preliminary 2,438
materials such as photographs, artwork, and typesetting that will 2,439
be used in printing advertising material; of printed matter that 2,440
offers free merchandise or chances to win sweepstake prizes and 2,441
that is mailed to potential customers with advertising material 2,442
described in division (B)(37)(a) of this section; and of 2,443
equipment such as telephones, computers, facsimile machines, and 2,444
similar tangible personal property primarily used to accept 2,445
orders for direct marketing retail sales. 2,446
(c) Sales of automatic food vending machines that preserve 2,448
food with a shelf life of forty-five days or less by 2,449
refrigeration and dispense it to the consumer. 2,450
For purposes of division (B)(37) of this section, "direct 2,452
marketing" means the method of selling where consumers order 2,453
tangible personal property by United States mail, delivery 2,454
service, or telecommunication and the vendor delivers or ships 2,455
the tangible personal property sold to the consumer from a 2,456
warehouse, catalogue distribution center, or similar fulfillment 2,457
facility by means of the United States mail, delivery service, or 2,458
common carrier. 2,459
(38) Sales to a person engaged in the business of 2,461
horticulture or producing livestock of materials to be 2,462
incorporated into a horticulture structure or livestock 2,463
structure; 2,464
(39) The sale of a motor vehicle that is used exclusively 2,466
for a vanpool ridesharing arrangement to persons participating in 2,467
the vanpool ridesharing arrangement when the vendor is selling 2,468
the vehicle pursuant to a contract between the vendor and the 2,469
60
department of transportation;
(40) Sales of personal computers, computer monitors, 2,471
computer keyboards, modems, and other peripheral computer 2,472
equipment to an individual who is licensed or certified to teach 2,473
in an elementary or a secondary school in this state for use by 2,474
that individual in preparation for teaching elementary or
secondary school students; 2,475
(41) Sales to a professional racing team of any of the 2,477
following: 2,478
(a) Motor racing vehicles; 2,480
(b) Repair services for motor racing vehicles; 2,483
(c) Items of property that are attached to or incorporated 2,486
in motor racing vehicles, including engines, chassis, and all 2,487
other components of the vehicles, and all spare, replacement, and 2,488
rebuilt parts or components of the vehicles; except not including 2,489
tires, consumable fluids, paint, and accessories consisting of 2,490
instrumentation sensors and related items added to the vehicle to 2,491
collect and transmit data by means of telemetry and other forms 2,492
of communication.
For the purpose of the proper administration of this 2,494
chapter, and to prevent the evasion of the tax, it is presumed 2,495
that all sales made in this state are subject to the tax until 2,496
the contrary is established. 2,497
As used in this section, except in division (B)(16) of this 2,499
section, "food" includes cereals and cereal products, milk and 2,500
milk products including ice cream, meat and meat products, fish 2,501
and fish products, eggs and egg products, vegetables and 2,502
vegetable products, fruits, fruit products, and pure fruit 2,503
juices, condiments, sugar and sugar products, coffee and coffee 2,504
substitutes, tea, and cocoa and cocoa products. It does not 2,505
include: spirituous or malt liquors; soft drinks; sodas and 2,506
beverages that are ordinarily dispensed at bars and soda 2,507
fountains or in connection therewith, other than coffee, tea, and 2,508
cocoa; root beer and root beer extracts; malt and malt extracts; 2,509
61
mineral oils, cod liver oils, and halibut liver oil; medicines, 2,510
including tonics, vitamin preparations, and other products sold 2,511
primarily for their medicinal properties; and water, including 2,512
mineral, bottled, and carbonated waters, and ice. 2,513
(C) The levy of an excise tax on transactions by which 2,515
lodging by a hotel is or is to be furnished to transient guests 2,516
pursuant to this section and division (B) of section 5739.01 of 2,517
the Revised Code does not prevent any of the following: 2,518
(1) A municipal corporation or township from levying an 2,520
excise tax for any lawful purpose not to exceed three per cent on 2,521
transactions by which lodging by a hotel is or is to be furnished 2,522
to transient guests in addition to the tax levied by this 2,523
section. If a municipal corporation or township repeals a tax 2,524
imposed under division (C)(1) of this section and a county in 2,525
which the municipal corporation or township has territory has a 2,526
tax imposed under division (C) of section 5739.024 of the Revised 2,527
Code in effect, the municipal corporation or township may not 2,528
reimpose its tax as long as that county tax remains in effect. A 2,529
municipal corporation or township in which a tax is levied under 2,530
division (B)(2) of section 351.021 of the Revised Code may not 2,531
increase the rate of its tax levied under division (C)(1) of this 2,532
section to any rate that would cause the total taxes levied under 2,533
both of those divisions to exceed three per cent on any lodging 2,534
transaction within the municipal corporation or township. 2,535
(2) A municipal corporation or a township from levying an 2,537
additional excise tax not to exceed three per cent on such 2,538
transactions pursuant to division (B) of section 5739.024 of the 2,539
Revised Code. Such tax is in addition to any tax imposed under 2,540
division (C)(1) of this section. 2,541
(3) A county from levying an excise tax pursuant to 2,543
division (A) of section 5739.024 of the Revised Code. 2,544
(4) A county from levying an excise tax not to exceed 2,546
three per cent of such transactions pursuant to division (C) of 2,547
section 5739.024 of the Revised Code. Such a tax is in addition 2,548
62
to any tax imposed under division (C)(3) of this section. 2,549
(5) A convention facilities authority, as defined in 2,551
division (A) of section 351.01 of the Revised Code, from levying 2,552
the excise taxes provided for in division (B) of section 351.021 2,553
of the Revised Code. 2,554
(6) A county from levying an excise tax not to exceed one 2,556
and one-half per cent of such transactions pursuant to division 2,557
(D) of section 5739.024 of the Revised Code. Such tax is in 2,558
addition to any tax imposed under division (C)(3) or (4) of this 2,559
section. 2,560
(7) A county from levying an excise tax not to exceed one 2,562
and one-half per cent of such transactions pursuant to division 2,563
(E) of section 5739.024 of the Revised Code. Such a tax is in 2,564
addition to any tax imposed under division (C)(3), (4), or (6) of 2,565
this section. 2,566
(D) The levy of this tax on retail sales of recreation and 2,568
sports club service shall not prevent a municipal corporation 2,569
from levying any tax on recreation and sports club dues or on any 2,570
income generated by recreation and sports club dues. 2,571
Section 2. That existing sections 324.01, 718.01, 5701.08, 2,574
5709.08, 5709.10, 5709.11, 5709.12, 5709.121, 5733.01, 5739.01, 2,575
and 5739.02 of the Revised Code are hereby repealed.
Section 3. A political subdivision or its affiliate that 2,577
is a cable operator on the effective date of sections 1771.01 to 2,578
1771.11 of the Revised Code, as enacted by this act, shall comply 2,579
with section 1771.04 of the Revised Code, and shall file an 2,581
application for a franchise under section 1771.10 of the Revised 2,582
Code, no later than six months after the effective date of 2,583
sections 1771.01 to 1771.11 of the Revised Code. Notwithstanding 2,584
division (B) of section 1771.10 of the Revised Code, a 2,585
governmental cable operator providing cable service over a cable 2,586
system within this state on the effective date of sections 2,587
1771.01 to 1771.11 of the Revised Code may continue to provide 2,588
that service until such time as the Public Utilities Commission 2,589
63
issues an order granting or denying the application under section 2,590
1771.10 of the Revised Code or, if appealed, until a final order 2,591
is issued pursuant to a judgment of the court as authorized under 2,593
that section.
As used in this section, "affiliate," "cable service," 2,595
"cable system," "governmental cable operator," and "political 2,596
subdivision" have the same meanings as in section 1771.01 of the 2,597
Revised Code. 2,598