As Reported by the Senate Ways and Means Committee

124th General Assembly
Regular Session
2001-2002
Sub. S. B. No. 200


SENATOR Spada



A BILL
To amend sections 323.152, 2935.01, 3317.026,1
3734.905, 3734.907, 3769.088, 3924.66, 4305.131,2
4307.05, 4307.07, 4503.065, 5117.071, 5703.05,3
5703.21, 5703.37, 5703.51, 5711.31, 5715.49,4
5715.50, 5717.02, 5727.26, 5727.28, 5727.39,5
5727.47, 5727.471, 5727.89, 5727.91, 5727.93,6
5728.01, 5728.02, 5728.03, 5728.04, 5728.06,7
5728.061, 5728.07, 5728.08, 5728.09, 5728.10,8
5728.11, 5728.13, 5733.021, 5733.04, 5733.05,9
5733.11, 5733.12, 5733.28, 5735.06, 5735.11,10
5735.12, 5735.122, 5735.13, 5735.14, 5735.141,11
5735.142, 5735.18, 5735.311, 5739.01, 5739.011,12
5739.02, 5739.026, 5739.031, 5739.033, 5739.05,13
5739.104, 5739.13, 5739.17, 5739.31, 5739.99,14
5741.01, 5741.13, 5743.05, 5743.081, 5743.53,15
5743.56, 5745.11, 5745.12, 5747.025, 5747.06,16
5747.08, 5747.13, 5749.07, and 5749.08; to amend,17
for the purpose of adopting a new section number as18
indicated in parentheses, section 5735.31119
(5728.05); to enact new sections 5739.07 and20
5741.10 and sections 5703.60 and 5703.70; and to21
repeal sections 5728.05, 5735.31, 5739.07, 5741.10,22
and 5747.181 of the Revised Code to amend the23
procedures for determining the amounts of, and24
hearing challenges to, various tax assessments and25
refunds, to alter the method of adjusting26
eligibility criteria for the homestead exemption,27
energy subsidies, the credit for installation of28
emergency telephone systems, the personal29
exemption, and the deduction for medical savings30
accounts, to authorize the release by public31
officials of certain information relating to32
vendors, to increase the loss carryover period for33
corporations, to change record-keeping requirements34
for certain taxpayers, to conform state law to35
federal law with regard to taxation of mobile36
telecommunications service, to increase protection37
of tax department employees from assault, and to38
make other changes relating to the administration39
of the tax laws by the Department of Taxation; and40
to amend the versions of sections 5733.021 and41
5733.12 of the Revised Code that are scheduled to42
take effect July 1, 2002, and the versions of43
sections 5727.26, 5728.08, and 5735.06 of the44
Revised Code that are scheduled to take effect45
January 1, 2003, to continue the provisions of this46
act on and after those dates.47


BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1. That sections 323.152, 2935.01, 3317.026,48
3734.905, 3734.907, 3769.088, 3924.66, 4305.131, 4307.05, 4307.07,49
4503.065, 5117.071, 5703.05, 5703.21, 5703.37, 5703.51, 5711.31,50
5715.49, 5715.50, 5717.02, 5727.26, 5727.28, 5727.39, 5727.47,51
5727.471, 5727.89, 5727.91, 5727.93, 5728.01, 5728.02, 5728.03,52
5728.04, 5728.06, 5728.061, 5728.07, 5728.08, 5728.09, 5728.10,53
5728.11, 5728.13, 5733.021, 5733.04, 5733.05, 5733.11, 5733.12,54
5733.28, 5735.06, 5735.11, 5735.12, 5735.122, 5735.13, 5735.14,55
5735.141, 5735.142, 5735.18, 5735.311, 5739.01, 5739.011, 5739.02,56
5739.026, 5739.031, 5739.033, 5739.05, 5739.104, 5739.13, 5739.17,57
5739.31, 5739.99, 5741.01, 5741.13, 5743.05, 5743.081, 5743.53,58
5743.56, 5745.11, 5745.12, 5747.025, 5747.06, 5747.08, 5747.13,59
5749.07, and 5749.08 be amended; that section 5735.311 (5728.05)60
be amended for the purpose of adopting a new section number as61
indicated in parentheses; and that new sections 5739.07 and62
5741.10 and sections 5703.60 and 5703.70 of the Revised Code be63
enacted to read as follows:64

       Sec. 323.152.  In addition to the reduction in taxes required65
under section 319.302 of the Revised Code, taxes shall be reduced66
as provided in divisions (A) and (B) of this section.67

       (A)(1) Division (A) of this section applies to any of the68
following:69

       (a) A person who is permanently and totally disabled;70

       (b) A person who is sixty-five years of age or older;71

       (c) A person who is the surviving spouse of a deceased72
person who was permanently and totally disabled or sixty-five73
years of age or older and who applied and qualified for a74
reduction in taxes under this division in the year of death,75
provided the surviving spouse is at least fifty-nine but not76
sixty-five or more years of age on the date the deceased spouse77
dies.78

       (2) Real property taxes on a homestead owned and occupied,79
or a homestead in a housing cooperative occupied, by a person to80
whom division (A) of this section applies shall be reduced for81
each year for which the owner obtains a certificate of reduction82
from the county auditor under section 323.154 of the Revised Code83
or for which the occupant obtains a certificate of reduction in84
accordance with section 323.159 of the Revised Code. The85
reduction shall equal the amount obtained by multiplying the tax86
rate for the tax year for which the certificate is issued by the87
reduction in taxable value shown in the following schedule:88

Reduce Taxable Value 89
Total Income by the Lesser of: 90

$11,900 or less $5,000 or seventy-five per cent 91
More than $11,900 but not more than $17,500 $3,000 or sixty per cent 92
More than $17,500 but not more than $23,000 $1,000 or twenty-five per cent 93
More than $23,000 -0- 94

       (3) Each calendar year beginning in 1999, the tax95
commissioner shall adjust the foregoing schedule by completing the96
following stepscalculations in September of each year:97

       (a) Determine the percentage increase in the gross domestic98
product deflator determined by the bureau of economic analysis of99
the United States department of commerce from the first day of100
JulyJanuary of the preceding calendar year to the last day of101
JuneDecember of the currentpreceding calendar year;102

       (b) Multiply that percentage increase by each of the total103
income amounts, and by each dollar amount by which taxable value104
is reduced, for the current tax year;105

       (c) Add the resulting product to each of the total income106
amounts, and to each of the dollar amounts by which taxable value107
is reduced, for the current tax year;108

       (d) Round the resulting sum to the nearest multiple of one109
hundred dollars.110

       The commissioner shall certify the amounts resulting from the111
adjustment to each county auditor not later than the first day of112
December each year. The certified amounts apply to the following113
tax year. The commissioner shall not make the adjustment in any114
calendar year in which the amounts resulting from the adjustment115
would be less than the total income amounts, or less than the116
dollar amounts by which taxable value is reduced, for the current117
tax year.118

       (B) Real property taxes on any homestead, and manufactured119
home taxes on any manufactured or mobile home on which a120
manufactured home tax is assessed pursuant to division (D)(2) of121
section 4503.06 of the Revised Code, shall be reduced for each122
year for which the owner obtains a certificate of reduction from123
the county auditor under section 323.154 of the Revised Code. The124
amount of the reduction shall equal one-fourth of the amount by125
which the taxes charged and payable on the homestead or the126
manufactured or mobile home are reduced for such year under127
section 319.302 of the Revised Code.128

       (C) The reductions granted by this section do not apply to129
special assessments or respread of assessments levied against the130
homestead, and if there is a transfer of ownership subsequent to131
the filing of an application for a reduction in taxes, such132
reductions are not forfeited for such year by virtue of such133
transfer.134

       (D) The reductions in taxable value referred to in this135
section shall be applied solely as a factor for the purpose of136
computing the reduction of taxes under this section and shall not137
affect the total value of property in any subdivision or taxing138
district as listed and assessed for taxation on the tax lists and139
duplicates, or any direct or indirect limitations on indebtedness140
of a subdivision or taxing district. If after application of141
sections 5705.31 and 5705.32 of the Revised Code, including the142
allocation of all levies within the ten-mill limitation to debt143
charges to the extent therein provided, there would be144
insufficient funds for payment of debt charges not provided for by145
levies in excess of the ten-mill limitation, the reduction of146
taxes provided for in sections 323.151 to 323.159 of the Revised147
Code, shall be proportionately adjusted to the extent necessary to148
provide such funds from levies within the ten-mill limitation.149

       (E) No reduction shall be made on the taxes due on the150
homestead of any person convicted of violating division (C) or (D)151
of section 323.153 of the Revised Code for a period of three years152
following the conviction.153

       Sec. 2935.01.  As used in this chapter:154

       (A) "Magistrate" has the same meaning as in section 2931.01155
of the Revised Code.156

       (B) "Peace officer" includes, except as provided in section157
2935.081 of the Revised Code, a sheriff; deputy sheriff; marshal;158
deputy marshal; member of the organized police department of any159
municipal corporation, including a member of the organized police160
department of a municipal corporation in an adjoining state161
serving in Ohio under a contract pursuant to section 737.04 of the162
Revised Code; member of a police force employed by a metropolitan163
housing authority under division (D) of section 3735.31 of the164
Revised Code; member of a police force employed by a regional165
transit authority under division (Y) of section 306.05 of the166
Revised Code; state university law enforcement officer appointed167
under section 3345.04 of the Revised Code; enforcement agent of168
the department of public safety designated under section 5502.14169
of the Revised Code; employee of the department of taxation to170
whom investigation powers have been delegated under section171
5743.45 of the Revised Code; employee of the department of natural172
resources who is a natural resources law enforcement staff officer173
designated pursuant to section 1501.013 of the Revised Code, a174
forest officer designated pursuant to section 1503.29 of the175
Revised Code, a preserve officer designated pursuant to section176
1517.10 of the Revised Code, a wildlife officer designated177
pursuant to section 1531.13 of the Revised Code, a park officer178
designated pursuant to section 1541.10 of the Revised Code, or a179
state watercraft officer designated pursuant to section 1547.521180
of the Revised Code; individual designated to perform law181
enforcement duties under section 511.232, 1545.13, or 6101.75 of182
the Revised Code; Ohio veterans' home police officer appointed183
under section 5907.02 of the Revised Code; special police officer184
employed by a port authority under section 4582.04 or 4582.28 of185
the Revised Code; police constable of any township; police186
officer of a township or joint township police district; the house187
sergeant at arms if the house sergeant at arms has arrest188
authority pursuant to division (E)(1) of section 101.311 of the189
Revised Code; and an assistant house sergeant at arms; and, for190
the purpose of arrests within those areas, and for the purposes of191
Chapter 5503. of the Revised Code, and the filing of and service192
of process relating to those offenses witnessed or investigated by193
them, includes the superintendent and troopers of the state194
highway patrol.195

       (C) "Prosecutor" includes the county prosecuting attorney196
and any assistant prosecutor designated to assist the county197
prosecuting attorney, and, in the case of courts inferior to198
courts of common pleas, includes the village solicitor, city199
director of law, or similar chief legal officer of a municipal200
corporation, any such officer's assistants, or any attorney201
designated by the prosecuting attorney of the county to appear for202
the prosecution of a given case.203

       (D) "Offense," except where the context specifically204
indicates otherwise, includes felonies, misdemeanors, and205
violations of ordinances of municipal corporations and other206
public bodies authorized by law to adopt penal regulations.207

       Sec. 3317.026.  (A) As used in this section, "refunded208
taxes" means taxes charged and payable from real and tangible209
personal property, including public utility property, that have210
been found to have been overpaid as the result of reductions in211
the taxable value of such property and that have been refunded,212
including any interest or penalty refunded with those taxes. If213
taxes are refunded over a period of time pursuant to division214
(B)(2), (3), or (4) of section 319.36 or division (C) of section215
5727.471 of the Revised Code, the total amount of taxes required216
to be refunded, excluding any interest accruing after the day the217
undertaking is entered into, shall be considered to have been218
refunded on the day the first portion of the overpayment is paid219
or credited.220

       (B) Not later than the last day of February each year, each221
county auditor shall certify to the tax commissioner, for each222
school district in the county, the amount of refunded taxes223
refunded in the preceding calendar year and the reductions in224
taxable value that resulted in those refunds, except for225
reductions in taxable value that previously have been reported to226
the tax commissioner on an abstract. If the tax commissioner227
determines that the amount of refunded taxes certified for a228
school district exceeds three per cent of the total taxes charged229
and payable for current expenses of the school district for the230
calendar year in which those taxes were refunded, the tax231
commissioner shall certify the reductions in taxable value that232
resulted in those refunds on or before the first day of June to233
the department of education. Upon receiving the certification by234
the tax commissioner, the department of education shall reduce the235
total taxable value of the school district, as defined in section236
3317.02 of the Revised Code, by the total amount of the reductions237
in taxable value that resulted in those refunds for the purpose of238
computing the state aid for the school district for the current239
fiscal year under section 3317.022 of the Revised Code. The240
increase in the amount of such aid resulting from the adjustment241
required by this section shall be paid to the school district on242
or before the thirtieth day of June of the current year.243

       (C) If an adjustment is made under this sectiondivision in244
the amount of state aid paid to a school district, the tax value245
reductions from which that adjustment results shall not be used in246
recomputing aid to a school district under section 3317.027 of the247
Revised Code.248

       (C) Not later than the first day of June each year, the tax249
commissioner shall certify to the department of education for each250
school district the total of the increases in taxable value above251
the amount of taxable value on which tax was paid, as provided in252
division (B)(1) or (2) of section 5727.47 of the Revised Code, as253
determined by the commissioner, and for which a notification was254
sent pursuant to section 5727.471 of the Revised Code, in the255
preceding calendar year. Upon receiving the certification, the256
department shall increase the total taxable value, as defined in257
section 3317.02 of the Revised Code, of the school district by the258
total amount of the increase in taxable value certified by the259
commissioner for the school district for the purpose of computing260
the school district's state aid for the following fiscal year261
under sections 3317.022 and 3317.0212 of the Revised Code.262

       Sec. 3734.905.  (A) The treasurer of state shall refund the263
fee imposed by section 3734.901 of the Revised Code paid illegally264
or erroneously, or paid on an illegal or erroneous assessment.265
Applications for refund shall be filed with the tax commissioner266
on a form prescribed by himthe commissioner, within four years of267
the illegal or erroneous payment of the fee. Upon268

       On the filing of the application, the commissioner shall269
determine the amount of refund due andto which the applicant is270
entitled. If the amount is not less than that claimed, the271
commissioner shall certify thatthe amount to the director of272
budget and management and treasurer of state for payment from the273
tax refund fund created by section 5703.052 of the Revised Code.274
If the amount is less than that claimed, the commissioner shall275
proceed in accordance with section 5703.70 of the Revised Code.276

       If the application for refund is for fees paid on an illegal277
or erroneous assessment, the certified amount shall include278
interest calculated at the rate per annum pursuant toprescribed279
by section 5703.47 of the Revised Code from the date of280
overpayment to the date of the commissioner's certification.281

       (B) When the fee imposed pursuant to section 3734.901 of the282
Revised Code has been paid on tires that are sold by a retail283
dealer or wholesale distributor to a motor vehicle manufacturer,284
or to a wholesale distributor or retail dealer for the purpose of285
resale outside this state, the seller in this state is entitled to286
a refund of the amount of the fee actually paid on the tires. To287
obtain a refund under this division, the seller shall apply to the288
tax commissioner, shall furnish documentary evidence satisfactory289
to the tax commissioner that the price paid by the purchaser did290
not include the fee, and shall provide the name and address of the291
purchaser to the tax commissioner. The seller shall apply on the292
form prescribed by the tax commissioner, within four years after293
the date of the sale. Upon receipt of an application, the tax294
commissioner shall determine the amount of any refund due and295
shall certify that amount to the director of budget and management296
and the treasurer of state for payment from the tax refund fund297
created in section 5703.052 of the Revised Code.298

       (C) If any person entitled to a refund of fees under this299
section, or section 5703.70 of the Revised Code, is indebted to300
the state for any tax administered by the tax commissioner, or any301
charge, penalties, or interest arising from such tax, the amount302
allowable on the application for refund first shall be applied in303
satisfaction of the debt.304

       Sec. 3734.907.  (A) Any person required to pay the fee305
imposed by section 3734.901 of the Revised Code is personally306
liable for the fee. The tax commissioner may make an assessment,307
based upon any information in the commissioner's possession,308
against any person who fails to file a return or pay any fee,309
interest, or additional charge as required by sections 3734.90 to310
3734.9014 of the Revised Code. The commissioner shall give the311
person assessed written notice of the assessment asin the manner312
provided in section 5703.37 of the Revised Code. With the notice,313
the commissioner shall provide instructions on how to petition for314
reassessment and request a hearing on the petition.315

       (B) When the information in the possession of the tax316
commissioner indicates that a person liable for the fee imposed by317
section 3734.901 of the Revised Code has not paid the full amount318
of fee due, the commissioner may audit a representative sample of319
the person's business and may issue an assessment based on the320
audit.321

       (C) A penalty of up to fifteen per cent may be added to all322
amounts assessed under this section. The commissioner may adopt323
rules providing for the imposition and remission of the penalties.324

       (D) Unless the person assessed files with the tax325
commissioner within sixty days after service of the notice of326
assessment, either personally or by certified mail as provided in327
section 5703.056 of the Revised Code, a written petition for328
reassessment in writingsigned by the person assessed or thethat329
person's authorized agent having knowledge of the facts, the330
assessment becomes final and the amount of the assessment is due331
and payable from the person assessed to the treasurer of state. A332
The petition shall indicate the objections to the assessment of333
the person assessed, but additional objections may be raised in334
writing if received by the commissioner prior to the date shown on335
the final determination of the person assessed, but additional336
objections may be raised in writing prior to the date shown on the337
final determination of the tax commissioner. The commissioner338
shall grant the petitioner a hearing on the petition, unless339
waived by the petitioner.340

       The commissioner may make any correction to the assessment341
that the commissioner finds proper and shall issue a final342
determination thereon. The commissioner shall serve a copy of343
the final determination on the petitioner either by personal344
service or by certified mail, and the commissioner's decision in345
the matter is final, subject to appeal under section 5717.02 of346
the Revised Code. If the petition has been properly filed, the347
commissioner shall proceed under section 5703.60 of the Revised348
Code.349

       (E) After an assessment becomes final, if any portion of the350
assessment, including accrued interest, remains unpaid, a351
certified copy of the tax commissioner's entry making the352
assessment final may be filed in the office of the clerk of the353
court of common pleas in the county in which the person assessed354
resides or in which the person's business is conducted. If the355
person assessed maintains no place of business in this state and356
is not a resident of this state, the certified copy of the entry357
may be filed in the office of the clerk of the court of common358
pleas of Franklin county.359

       The clerk, immediatelyImmediately upon the filing of the360
entry, the clerk shall enter a judgment for the state against the361
person assessed in the amount shown to be dueon the entry. The362
judgment may be filed by the clerk in a loose-leaf book entitled363
"special judgments for state tire fee," and shall have the same364
effect as other judgments. Execution shall issue upon the365
judgment upon the request of the tax commissioner, and all laws366
applicable to sales on execution shall apply to sales made under367
the judgment.368

       The portion of the assessment not paid within sixty days369
after the day the assessment was issued shall bear interest at the370
rate per annum prescribed by section 5703.47 of the Revised Code371
from the day the tax commissioner issues the assessment until the372
day the assessment is paid. Interest shall be paid in the same373
manner as the fee and may be collected by the issuance of an374
assessment under this section.375

       (F) If the tax commissioner believes that collection of the376
fee will be jeopardized unless proceedings to collect or secure377
collection of the fee are instituted without delay, the378
commissioner may issue a jeopardy assessment against the person379
liable for the fee. UponImmediately upon the issuance of the380
jeopardy assessment, the commissioner immediately shall file an381
entry with the clerk of the court of common pleas in the manner382
prescribed by division (E) of this section. Notice of the383
jeopardy assessment shall be served on the person assessed or the384
person's legal representative, as provided in section 5703.37 of385
the Revised Code, within five days of the filing of the entry with386
the clerk. The total amount assessed is immediately due and387
payable, unless the person assessed files a petition for388
reassessment in accordance with division (D) of this section and389
provides security in a form satisfactory to the commissioner and390
in an amount sufficient to satisfy the unpaid balance of the391
assessment. Full or partial payment of the assessment does not392
prejudice the commissioner's consideration of the petition for393
reassessment.394

       (G) All money collected by the tax commissioner under this395
section shall be paid to the treasurer of state as revenue arising396
from the fee imposed by section 3734.901 of the Revised Code.397

       Sec. 3769.088.  (A) If any permit holder required by this398
chapter to pay the taxes levied by sections 3769.08, 3769.087,399
3769.26, and 3769.28 of the Revised Code fails to pay the taxes,400
the tax commissioner may make an assessment against the permit401
holder based upon any information in the commissioner's402
possession.403

       A penalty of up to fifteen per cent may be added to the404
amount of every assessment made under this section. The405
commissioner may adopt rules providing for the imposition and406
remission of penalties added to assessments made under this407
section.408

       The commissioner shall give the party assessed written notice409
of the assessment asin the manner provided in section 5703.37 of410
the Revised Code. With the notice, the commissioner shall provide411
instructions on how to petition for reassessment and request a412
hearing on the petition.413

       (B) Unless the party to whom the notice of assessment is414
directedassessed files with the tax commissioner within sixty415
days after service of the notice of assessment, either personally416
or by certified mail, a written petition for reassessment in417
writing, signed by the party assessed, or by thethat party's418
authorized agent having knowledge of the facts, the assessment419
shall becomebecomes final and the amount of the assessment shall420
beis due and payable from the party assessed to the tax421
commissioner. The petition shall indicate the objections of the422
party assessed, but additional objections may be raised in writing423
if received by the commissioner prior to the date shown on the424
final determination by the commissioner.425

       Unless the petitioner waives a hearing, the commissioner426
shall assign a time and place for the hearing on the petition and427
notify the petitioner of the time and place of the hearing by428
personal service or certified mail, but the commissioner may429
continue the hearing from time to time if necessary.430

       The commissioner may make such correction to the assessment431
as the commissioner finds proper. The commissioner shall serve a432
copy of the commissioner's final determination on the petitioner433
by personal service or certified mail, and the commissioner's434
decision in the matter shall be final, subject to appeal as435
provided in section 5717.02 of the Revised Code. Only objections436
decided on the merits by the board of tax appeals or a court shall437
be given collateral estoppel or res judicata effect in considering438
an application for refund of amounts paid pursuant to the439
assessment. If the petition has been properly filed, the440
commissioner shall proceed under section 5703.60 of the Revised441
Code.442

       (C) After an assessment becomes final, if any portion of the443
assessment remains unpaid, including accrued interest, a certified444
copy of the tax commissioner's entry making the assessment final445
may be filed in the office of the clerk of the court of common446
pleas in the county in which the place, track, or enclosure for447
which the permit was issued is located or the county in which the448
party assessed resides or has its principal place of business. If449
the party assessed maintains no place of business in this state450
and is not a resident of this state, the certified copy of the451
entry may be filed in the office of the clerk of the court of452
common pleas of Franklin county.453

       The clerk, immediatelyImmediately upon the filing of such454
the entry, the clerk shall enter a judgment for the state against455
the party assessed in the amount shown on the entry. The judgment456
may be filed by the clerk in a loose-leaf book entitled "special457
judgments for state horse racing tax," and shall have the same458
effect as other judgments. Execution shall issue upon the judgment459
upon the request of the tax commissioner, and all laws applicable460
to sales on execution shall apply to sales made under the461
judgment.462

       The portion of the assessment not paid within sixty days463
after the day the assessment was issued shall bear interest at the464
rate per annum prescribed by section 5703.47 of the Revised Code465
from the day the tax commissioner issues the assessment until the466
day the assessment is paid. Interest shall be paid in the same467
manner as the tax and may be collected by the issuance of an468
assessment under this section.469

       (D) All money collected by the tax commissioner under this470
section shall be treated as revenue arising from the taxes imposed471
by sections 3769.08, 3769.087, 3769.26, and 3769.28 of the Revised472
Code.473

       Sec. 3924.66.  (A) In determining Ohio adjusted gross income474
under Chapter 5747. of the Revised Code, an account holder may475
deduct an amount equaling the total of the deposits that the476
account holder, the account holder's spouse, or the account477
holder's employer made to the account during the taxable year, to478
the extent that the funds for the deposits have not otherwise been479
deducted or excluded in determining the account holder's federal480
adjusted gross income. The amount deducted by an account holder481
for a taxable year shall not exceed three thousand dollars. If482
two married persons each have an account, each spouse may claim483
the deduction described in this section, and the amount deducted484
by each spouse shall not exceed three thousand dollars, whether485
the spouses file returns jointly or separately.486

       (B) The maximum deduction allowed under division (A) of this487
section shall be adjusted annually by the department of taxation488
to reflect increases in the consumer price index for all items for489
all urban consumers for the north centralmidwest region, as490
publisheddetermined by the United States bureau of labor491
statistics for the period of the first day of January of the492
preceding calendar year to the last day of December of the493
preceding calendar year. The department of taxation shall494
determine in September of each tax year the adjustment that will495
be effective for the succeeding tax year. The department shall496
not make the adjustment in any tax year in which the maximum497
deduction resulting from the adjustment is less than the maximum498
deduction allowed for the previous tax year.499

       (C) In determining Ohio adjusted gross income under Chapter500
5747. of the Revised Code, an account holder may deduct the501
investment earnings of a medical savings account from the account502
holder's federal adjusted gross income, to the extent that these503
earnings have been included in the account holder's federal504
adjusted gross income.505

       (D) In determining Ohio adjusted gross income under Chapter506
5747. of the Revised Code, an account holder shall add to the507
account holder's federal adjusted gross income an amount equal to508
the sum of the amounts described in divisions (D)(1) and (2) of509
this section to the extent that those amounts were included in the510
account holder's federal adjusted gross income and previously511
deducted in determining the account holder's Ohio adjusted gross512
income. In determining the extent to which amounts withdrawn from513
the account shall be included in the account holder's Ohio514
adjusted gross income, the tax commissioner shall be guided by the515
provisions of sections 72 and 408 of the Internal Revenue Code516
governing the determination of the amount of withdrawals from an517
individual retirement account to be included in federal gross518
income.519

       (1) Amounts withdrawn from the account during the taxable520
year used for any purpose other than to reimburse the account521
holder for, or to pay, the eligible medical expenses of the522
account holder or the account holder's spouse or dependents;523

       (2) Investment earnings during the taxable year on amounts524
withdrawn from the account that are described in division (D)(1)525
of this section.526

       (E) Amounts withdrawn from a medical savings account to527
reimburse the account holder for, or to pay, the account holder's528
eligible medical expenses, or the eligible medical expenses of the529
account holder's spouse or dependents, shall not be included in530
the account holder's Ohio adjusted gross income in determining531
taxes due under Chapter 5747. of the Revised Code.532

       (F) If a dependent of an account holder becomes ineligible533
to continue to participate in the account holder's policy, plan,534
or contract of health coverage, the account holder may withdraw535
funds from the account holder's account and use those funds to pay536
the premium for the first year of a policy, plan, or contract of537
health coverage for the dependent and to pay any deductible for538
the first year of that policy, plan, or contract. Funds withdrawn539
and used for that purpose shall not be included in the account540
holder's Ohio adjusted gross income in determining taxes due under541
Chapter 5747. of the Revised Code.542

       Sec. 4305.131.  (A) If any permit holder fails to pay the543
taxes levied inby section 4301.42, 4301.43, 4301.432, or 4305.01544
of the Revised Code in the manner prescribed by section 4303.33 of545
the Revised Code, or inby section 4301.421 or 4301.424 of the546
Revised Code in the manner prescribed in section 4301.422 of the547
Revised Code, and by the rules of the tax commissioner, the548
commissioner may make an assessment against the permit holder549
based upon any information in the commissioner's possession.550

       No assessment shall be made against any permit holder for any551
taxes imposed by section 4301.42, 4301.421, 4301.424, 4301.43,552
4301.432, or 4305.01 of the Revised Code more than three years553
after the last day of the calendar month in which the sale was554
made or more than three years after the return for that period is555
filed, whichever is later. This section does not bar an556
assessment against any permit holder or registrant as provided in557
section 4303.331 of the Revised Code who fails to file a return as558
required by section 4301.422 or 4303.33 of the Revised Code, or559
who files a fraudulent return.560

       A penalty of up to thirty per cent may be added to the amount561
of every assessment made under this section. The commissioner may562
adopt rules providing for the imposition and remission of563
penalties added to assessments made under this section.564

       The commissioner shall give the party assessed written notice565
of the assessment asin the manner provided in section 5703.37 of566
the Revised Code. With the notice, the commissioner shall provide567
instructions on how to petition for reassessment and request a568
hearing on the petition.569

       (B) Unless the party to whom the notice of assessment is570
directedassessed files with the tax commissioner within sixty571
days after service of the notice of assessment, either personally572
or by certified mail as provided in section 5703.056 of the573
Revised Code, a written petition for reassessment in writing,574
signed by the party assessed, or by that party's authorized agent575
having knowledge of the facts, the assessment shall becomebecomes576
final and the amount of the assessment shall beis due and payable577
from the party assessed to the treasurer of state. The petition578
shall indicate the objections of the party assessed, but579
additional objections may be raised in writing if received by the580
commissioner prior to the date shown on the final determination by581
the commissioner.582

       Unless the petitioner waives a hearing, the commissioner583
shall assign a time and place for the hearing on the petition and584
notify the petitioner of the time and place of the hearing by585
personal service or certified mail, but the commissioner may586
continue the hearing from time to time if necessary.587

        The commissioner may make such correction to the assessment588
as the commissioner finds proper. The commissioner shall serve a589
copy of the final determination on the petitioner by personal590
service or certified mail, and the commissioner's decision in the591
matter shall be final, subject to appeal as provided in section592
5717.02 of the Revised Code. Only objections decided on the merits593
by the board of tax appeals or a court shall be given collateral594
estoppel or res judicata effect in considering an application for595
refund of amounts paid pursuant to the assessment. If the petition596
has been properly filed, the commissioner shall proceed under597
section 5703.60 of the Revised Code.598

       (C) After an assessment becomes final, if any portion of the599
assessment remains unpaid, including accrued interest, a certified600
copy of the tax commissioner's entry making the assessment final601
may be filed in the office of the clerk of the court of common602
pleas in the county in which the permit holder's place of business603
is located or the county in which the party assessed resides. If604
the party assessed maintains no place of business in this state605
and is not a resident of this state, the certified copy of the606
entry may be filed in the office of the clerk of the court of607
common pleas of Franklin county.608

       The clerk, immediatelyImmediately upon the filing of the609
entry, the clerk shall enter a judgment for the state against the610
party assessed in the amount shown on the entry. The judgment may611
be filed by the clerk in a loose-leaf book entitled "special612
judgments for state beer and liquor sales taxes," and shall have613
the same effect as other judgments. Execution shall issue upon614
the judgment upon the request of the tax commissioner, and all615
laws applicable to sales on execution shall apply to sales made616
under the judgment, except as otherwise provided in this chapter617
and Chapters 4301. and 4307. of the Revised Code.618

       The portion of the assessment not paid within sixty days619
after the day the assessment was issued shall bear interest at the620
rate per annum prescribed by section 5703.47 of the Revised Code621
from the day the tax commissioner issues the assessment until it622
is paid. Interest shall be paid in the same manner as the tax and623
may be collected by the issuance of an assessment under this624
section.625

       (D) All money collected under this section shall be626
considered as revenue arising from the taxes imposed by sections627
4301.42, 4301.421, 4301.424, 4301.43, 4301.432, and 4305.01 of the628
Revised Code.629

       Sec. 4307.05.  (A) The tax commissioner shall refund to630
persons required to pay the tax levied under section 4301.42,631
4301.421, 4301.424, 4301.43, 4301.432, 4303.33, or 4305.01 of the632
Revised Code the amount of tax paid illegally or erroneously or633
paid on an illegal or erroneous assessment. Applications for634
refund shall be filed with the commissioner, on the form635
prescribed by the commissioner, within three years from the date636
of the illegal or erroneous payment of the tax or assessment. Upon637

       On the filing of the application, the commissioner shall638
determine the amount of the refund due andto which the applicant639
is entitled. If the amount is not less than that claimed, the640
commissioner shall certify the amount to the director of budget641
and management and treasurer of state for payment from the tax642
refund fund created by section 5703.052 of the Revised Code. If643
the amount is less than that claimed, the commissioner shall644
proceed in accordance with section 5703.70 of the Revised Code.645



       (B) The holder of a B-3 permit is entitled to a refund of647
the actual amount of tax paid on wine sold for sacramental648
purposes, upon conditionthe conditions that the permit holder649
make affidavit that the wine was so sold, that the tax had been650
paid on the wine, and that the permit holder furnish both of the651
following:652

       (1) A written acknowledgment from the purchaser that the653
purchaser has received the wine and that the price paid did not654
include the tax;655

       (2) The name and address of the purchaser.656

       Application for a refund shall be made as an application for657
refund of tax erroneously paid and shall be subject to the658
requirements and procedures of division (A) of this section. On659
the filing of the application, the commissioner shall determine660
the amount of refund due and certify that amount to the director661
of budget and management and treasurer of state for payment from662
the tax refund fund. When a refund is granted for payment of an663
illegal or erroneous assessment issued by the commissioner, the664
refund shall include interest on the amount of the refund from the665
date of the overpayment. The interest shall be computed at the666
rate per annum prescribed by section 5703.47 of the Revised Code.667

       Sec. 4307.07.  When tax has been paid on bottled beverages668
and such bottled beverages are sold and shipped in interstate or669
foreign commerce, or transported by either the purchaser or seller670
out of the state for the purpose of resale outside the state, the671
seller in this state is entitled to a refund of the actual amount672
of tax paid, upon condition that hethe seller furnishes673
documentary evidence satisfactory to the tax commissioner, which674
may be from the usual business records of the taxpayer, that the675
price paid did not include the tax, together with the name and676
address of the purchaser. The commissioner may adopt rules677
providing for refund to manufacturers or dealers of the amount of678
tax paid on such bottled beverage whichthat becomes unfit for679
sale, or any similar loss whichthat may occur, on proof of such680
loss. An application shall be filed with the commissioner, on the681
form prescribed by himthe commissioner for such purpose, within682
ninety days from the date such beverages are sold and shipped in683
interstate or foreign commerce, or from the date that such684
beverages become unfit for sale or any similar loss occurs. On685

       On the filing of suchthe application, the commissioner686
shall determine the amount of refund due andto which the687
applicant is entitled. If the amount is not less than that688
claimed, the commissioner shall certify suchthe amount to the689
director of budget and management and treasurer of state for690
payment from the tax refund fund created by section 5703.052 of691
the Revised Code.692

       If the amount is less than that claimed, the commissioner693
shall proceed in accordance with section 5703.70 of the Revised694
Code.695

       Sec. 4503.065.  (A) This section applies to any of the696
following:697

       (1) An individual who is permanently and totally disabled;698

       (2) An individual who is sixty-five years of age or older;699

       (3) An individual who is the surviving spouse of a deceased700
person who was permanently and totally disabled or sixty-five701
years of age or older and who applied and qualified for a702
reduction in assessable value under this section in the year of703
death, provided the surviving spouse is at least fifty-nine but704
not sixty-five or more years of age on the date the deceased705
spouse dies.706

       (B)(1) The manufactured home tax on a manufactured or mobile707
home that is paid pursuant to division (C) of section 4503.06 of708
the Revised Code and that is owned and occupied as a home by an709
individual whose domicile is in this state and to whom this710
section applies, shall be reduced for any tax year for which the711
owner obtains a certificate of reduction from the county auditor712
under section 4503.067 of the Revised Code, provided the713
individual did not acquire ownership from a person, other than the714
individual's spouse, related by consanguinity or affinity for the715
purpose of qualifying for the reduction in assessable value. An716
owner includes a settlor of a revocable inter vivos trust holding717
the title to a manufactured or mobile home occupied by the settlor718
as of right under the trust. The reduction shall equal the amount719
obtained by multiplying the tax rate for the tax year for which720
the certificate is issued by the reduction in assessable value721
shown in the following schedule.722

Reduce Assessable Value 723
Total Income by the Lesser of: 724
Column A             Column B 725

$11,900 or less $5,000 or seventy-five per cent 726
More than $11,900 but not more than $17,500 $3,000 or sixty per cent 727
More than $17,500 but not more than $23,000 $1,000 or twenty-five per cent 728
More than $23,000 -0- 729

       (2) Each calendar year beginning in 1999, the tax730
commissioner shall adjust the foregoing schedule by completing the731
following stepscalculations in September of each year:732

       (a) Determine the percentage increase in the gross domestic733
product deflator determined by the bureau of economic analysis of734
the United States department of commerce from the first day of735
JulyJanuary of the preceding calendar year to the last day of736
JuneDecember of the currentpreceding calendar year;737

       (b) Multiply that percentage increase by each of the total738
income amounts, and by each dollar amount by which assessable739
value is reduced, for the ensuing tax year;740

       (c) Add the resulting product to each of the total income741
amounts, and to each of the dollar amounts by which assessable742
value is reduced, for the ensuing tax year;743

       (d) Round the resulting sum to the nearest multiple of one744
hundred dollars.745

       The commissioner shall certify the amounts resulting from the746
adjustment to each county auditor not later than the first day of747
December each year. The certified amounts apply to the second748
ensuing tax year. The commissioner shall not make the adjustment749
in any calendar year in which the amounts resulting from the750
adjustment would be less than the total income amounts, or less751
than the dollar amounts by which assessable value is reduced, for752
the ensuing tax year.753

       (C) If the owner or the spouse of the owner of a754
manufactured or mobile home is eligible for a homestead exemption755
on the land upon which the home is located, the reduction in756
assessable value to which the owner or spouse is entitled under757
this section shall not exceed the difference between the reduction758
in assessable value to which the owner or spouse is entitled under759
column A of the above schedule and the amount of the reduction in760
taxable value that was used to compute the homestead exemption.761

       (D) No reduction shall be made on the assessable value of762
the home of any person convicted of violating division (C) or (D)763
of section 4503.066 of the Revised Code for a period of three764
years following the conviction.765

       Sec. 5117.071.  (A) EachIn September of each year, the tax766
commissioner shall adjust the total income amounts set forth in767
sections 5117.07 and 5117.09 of the Revised Code to be used for768
applications submitted for the heating season commencing in the769
next calendar year, by completing the following steps:770

       (1) Determine the percentage increase in the gross domestic771
product deflator determined by the bureau of economic analysis of772
the United States department of commerce for the preceding year;773

       (2) Multiply that percentage increase by each of the total774
income amounts for the preceding year;775

       (3) Add the resulting products to each of the total income776
amounts for the preceding year;777

       (4) Round the resulting sums upward to the nearest multiple778
of ten dollars.779

       The commissioner shall not make the adjustment in any year in780
which the amounts resulting from the adjustment would be less than781
the total income amounts for the preceding year.782

       (B) EachIn September of each year, the tax commissioner also783
shall adjust the current total income amounts set forth in784
sections 5117.07 and 5117.09 of the Revised Code. For any year,785
the current total income amounts shall equal one-half of the786
respective total income amounts set forth in those sections and787
adjusted under division (A) of this section for that year.788

       (C) Each year, the tax commissioner shall provide both the789
adjusted total income amounts referred to in division (A) of this790
section and the current total income amounts referred to in791
division (B) of this section to the director of development.792

       (D) The director of development and each energy company and793
energy dealer shall use the adjusted total income amounts and the794
current total income amounts determined under divisions (A) and795
(B) of this section in performing their duties under sections796
5117.01 to 5117.12 of the Revised Code.797

       Sec. 5703.05.  All powers, duties, and functions of the798
department of taxation are vested in and shall be performed by the799
tax commissioner, which powers, duties, and functions shall800
include, but shall not be limited to, the following:801

       (A) Prescribing all blank forms which the department is802
authorized to prescribe, and to provide such forms and distribute803
the same as required by law and the rules of the department. The804
tax commissioner shall include a mail-in registration form805
prescribed in section 3503.14 of the Revised Code within the806
return and instructions for the tax levied in odd-numbered years807
under section 5747.02 of the Revised Code, beginning with the tax808
levied for 1995. The secretary of state shall bear all costs for809
the inclusion of the mail-in registration form. That form shall810
be addressed for return to the office of the secretary of state.811

       (B) Exercising the authority provided by law, including812
orders from bankruptcy courts, relative to remitting or refunding813
taxes or assessments, including penalties and interest thereon,814
illegally or erroneously assessed or collected, or for any other815
reason overpaid, and in addition, the commissioner may on written816
application of any person, firm, or corporation claiming to have817
overpaid to the treasurer of state at any time within five years818
prior to the making of such application any tax payable under any819
law which the department of taxation is required to administer820
which does not contain any provision for refund, or on the821
commissioner's own motion investigate the facts and make in822
triplicate a written statement of the commissioner's findings,823
and, if the commissioner finds that there has been an overpayment,824
issue in triplicate a certificate of abatement payable to the825
taxpayer, the taxpayer's assigns, or legal representative which826
shows the amount of the overpayment and the kind of tax overpaid.827
One copy of such statement shall be entered on the journal of the828
commissioner, one shall be certified to the attorney general, and829
one certified copy shall be delivered to the taxpayer. All copies830
of the certificate of abatement shall be transmitted to the831
attorney general, and if the attorney general finds it to be832
correct the attorney general shall so certify on each copy, and833
deliver one copy to the taxpayer, one copy to the commissioner,834
and the third copy to the treasurer of state. Except as provided835
in sections 5725.08 and 5725.16 of the Revised Code the taxpayer's836
copy of any certificates of abatement may be tendered by the payee837
or transferee thereof to the treasurer of state as payment, to the838
extent of the amount thereof, of any tax payable to the treasurer839
of state.840

       (C) Exercising the authority provided by law relative to841
consenting to the compromise and settlement of tax claims;842

       (D) Exercising the authority provided by law relative to the843
use of alternative tax bases by taxpayers in the making of844
personal property tax returns;845

       (E) Exercising the authority provided by law relative to846
authorizing the prepayment of taxes on retail sales of tangible847
personal property or on the storage, use, or consumption of848
personal property, and waiving the collection of such taxes from849
the consumers;850

       (F) Exercising the authority provided by law to revoke851
licenses;852

       (G) Maintaining a continuous study of the practical853
operation of all taxation and revenue laws of the state, the854
manner in which and extent to which such laws provide revenues for855
the support of the state and its political subdivisions, the856
probable effect upon such revenue of possible changes in existing857
laws, and the possible enactment of measures providing for other858
forms of taxation. For this purpose the commissioner may859
establish and maintain a division of research and statistics, and860
may appoint necessary employees who shall be in the unclassified861
civil service; the results of such study shall be available to the862
members of the general assembly and the public.863

       (H) Making all tax assessments, valuations, findings,864
determinations, computations, and orders the department of865
taxation is by law authorized and required to make and, pursuant866
to time limitations provided by law, on the commissioner's own867
motion, reviewing, redetermining, or correcting any tax868
assessments, valuations, findings, determinations, computations,869
or orders the commissioner has made, but the commissioner shall870
not review, redetermine, or correct any tax assessment, valuation,871
finding, determination, computation, or order which the872
commissioner has made as to which an appeal or application for873
rehearing, review, redetermination, or correction has been filed874
with the board of tax appeals, unless such appeal or application875
is withdrawn by the appellant or applicant or dismissed;876

       (I) Appointing not more than five deputy tax commissioners,877
who, under such regulations as the rules of the department of878
taxation prescribe, may act for the commissioner in the879
performance of such duties as the commissioner prescribes in the880
administration of the laws which the commissioner is authorized881
and required to administer, and who shall serve in the882
unclassified civil service at the pleasure of the commissioner,883
but if a person who holds a position in the classified service is884
appointed, it shall not affect the civil service status of such885
person. The commissioner may designate not more than two of the886
deputy commissioners to act as commissioner in case of the887
absence, disability, or recusal of the commissioner or vacancy in888
the office of commissioner. The commissioner may adopt rules889
relating to the order of precedence of such designated deputy890
commissioners and to their assumption and administration of the891
office of commissioner.892

       (J) Appointing and prescribing the duties of all other893
employees of the department of taxation necessary in the894
performance of the work of the department which the tax895
commissioner is by law authorized and required to perform, and896
creating such divisions or sections of employees as, in the897
commissioner's judgment, is proper;898

       (K) Organizing the work of the department, which the899
commissioner is by law authorized and required to perform, so900
that, in the commissioner's judgment, an efficient and economical901
administration of the laws will result;902

       (L) Maintaining a journal, which is open to public903
inspection, in which the tax commissioner shall keep a record of904
all actions taken byfinal determinations of the commissioner905
relating to assessments and the reasons therefor;906

       (M) Adopting and promulgating, in the manner provided by907
section 5703.14 of the Revised Code, all rules of the department,908
including rules for the administration of sections 3517.16,909
3517.17, and 5747.081 of the Revised Code;910

       (N) Destroying any or all returns or assessment certificates911
in the manner authorized by law;912

       (O) Adopting rules, in accordance with division (B) of913
section 325.31 of the Revised Code, governing the expenditure of914
moneys from the real estate assessment fund under that division.915

       Sec. 5703.21.  (A) Except as provided in divisions (B) and916
(C) of this section, no agent of the department of taxation,917
except in the agent's report to the department or when called on918
to testify in any court or proceeding, shall divulge any919
information acquired by the agent as to the transactions,920
property, or business of any person while acting or claiming to921
act under orders of the department. Whoever violates this922
provision shall thereafter be disqualified from acting as an923
officer or employee or in any other capacity under appointment or924
employment of the department.925

       (B)(1) For purposes of an audit pursuant to section 117.15926
of the Revised Code, or an audit of the department pursuant to927
Chapter 117. of the Revised Code, or an audit, pursuant to that928
chapter, the objective of which is to express an opinion on a929
financial report or statement prepared or issued pursuant to930
division (A)(7) or (9) of section 126.21 of the Revised Code, the931
officers and employees of the auditor of state charged with932
conducting the audit shall have access to and the right to examine933
any state tax returns and state tax return information in the934
possession of the department to the extent that the access and935
examination are necessary for purposes of the audit. Any936
information acquired as the result of that access and examination937
shall not be divulged for any purpose other than as required for938
the audit or unless the officers and employees are required to939
testify in a court or proceeding under compulsion of legal940
process. Whoever violates this provision shall thereafter be941
disqualified from acting as an officer or employee or in any other942
capacity under appointment or employment of the auditor of state.943

       (2) As provided by section 6103(d)(2) of the Internal944
Revenue Code, any federal tax returns or federal tax information945
that the department has acquired from the internal revenue946
service, through federal and state statutory authority, may be947
disclosed to the auditor of state solely for purposes of an audit948
of the department.949

       (C) Division (A) of this section does not prohibit any of950
the following:951

       (1) Divulging information contained in applications,952
complaints, and related documents filed with the department under953
section 5715.27 of the Revised Code or in applications filed with954
the department under section 5715.39 of the Revised Code;955

       (2) Providing information to the office of child support956
within the department of job and family services pursuant to957
section 3125.43 of the Revised Code;958

       (3) Disclosing to the board of motor vehicle collision959
repair registration any information in the possession of the960
department that is necessary for the board to verify the existence961
of an applicant's valid vendor's license and current state tax962
identification number under section 4775.07 of the Revised Code;963

       (4) Providing information to the administrator of workers'964
compensation pursuant to section 4123.591 of the Revised Code;965

       (5) Providing to the attorney general information the966
department obtains under division (J) of section 1346.01 of the967
Revised Code;968

       (6) Permitting properly authorized officers, employees, or969
agents of a municipal corporation from inspecting reports or970
information pursuant to rules adopted under section 5745.16 of the971
Revised Code.972

       (7) Providing information regarding the name, account973
number, or business address of a holder of a vendor's license974
issued pursuant to section 5739.17 of the Revised Code, a holder975
of a direct payment permit issued pursuant to section 5739.031 of976
the Revised Code, or a seller having a use tax account maintained977
pursuant to section 5741.17 of the Revised Code, or information978
regarding the active or inactive status of a vendor's license,979
direct payment permit, or seller's use tax account.980

       Sec. 5703.37. Except as otherwise provided by section981
5711.28, 5711.31, 5727.47, or 5731.27 of the Revised CodeWhenever982
service of a notice or order is required in the manner provided in983
this section, a certified copy of everythe order or notice,984
service of which is required, shall be served upon the person985
affected thereby either by personal deliveryservice or by986
certified mail. Within the time specified in thean order of the987
department of taxation, every person upon whom it is served, if988
required by the order, shall notify the department, in like manner989
by personal service, certified mail, or a delivery service990
authorized under section 5703.056 of the Revised Code, whether the991
terms of the order are accepted and will be obeyed.992

       Sec. 5703.51.  (A) The tax commissioner shall include in the993
instruction booklet for filing the annual return of personal994
property taxes a general description of the method by which the995
tax is assessed and collected and the rights and responsibilities996
of taxpayers in that process.997

       (B) At or before the commencement of an audit, the tax998
commissioner shall provide to the taxpayer a written description999
of the roles of the department of taxation and of the taxpayer1000
during an audit and a statement of the taxpayer's rights,1001
including any right to obtain a refund of an overpayment of a tax.1002
At or before the commencement of an audit, the commissioner shall1003
inform the taxpayer when the audit is considered to have1004
commenced.1005

       (C) With or before the issuance of an assessment, the tax1006
commissioner or county auditor shall provide to the taxpayer:1007

       (1) A written description of the basis for the assessment1008
and any penalty required to be imposed with the assessment;1009

       (2) A written description of the taxpayer's right to appeal1010
the assessment and an explanation of the steps required to request1011
administrative review by the tax commissioner;1012

       (3) A written description of the collection remedies1013
available to the state, including a statement that if the taxpayer1014
fails to pay an amount owed to the stateassessment within thirty1015
sixty days after it is due, the tax commissioner will certify the1016
amount to the attorney general for collection, and a summary of1017
the provisions contained in section 131.02 of the Revised Code.1018

       (D) With or before the issuance of a final determination of1019
the tax commissioner, the commissioner or county auditor shall1020
provide to the taxpayer a written description of the steps1021
required to perfect an appeal to the board of tax appeals.1022

       (E) Except in cases involving suspected criminal violations1023
of the tax law or other criminal activity, the tax commissioner1024
shall conduct an audit of a taxpayer during regular business hours1025
and after providing reasonable notice to the taxpayer. A taxpayer1026
who is unable to comply with a proposed time for an audit on the1027
grounds that the proposed audit would cause inconvenience or1028
hardship must offer reasonable alternative dates for the audit.1029

       (F) At all stages of an audit or the administrative review1030
of the audit by the tax commissioner or county auditor, a taxpayer1031
is entitled to be assisted or represented by an attorney,1032
accountant, bookkeeper, or other tax practitioner. The tax1033
commissioner shall prescribe a form by which a taxpayer may1034
designate such a person to assist or represent himthe taxpayer in1035
the conduct of any proceedings resulting from actions by the tax1036
commissioner or county auditor. In the absence of this form, the1037
commissioner or auditor may accept such other evidence as hethe1038
commissioner considers appropriate that a person is the authorized1039
representative of a taxpayer.1040

       A taxpayer may refuse to answer any questions asked by the1041
person conducting the audit until hethe taxpayer has an1042
opportunity to consult with histhe taxpayer's attorney,1043
accountant, bookkeeper, or other tax practitioner. This division1044
does not authorize the practice of law by a person who is not an1045
attorney.1046

       (G) A taxpayer may record, electronically or otherwise, the1047
audit examination.1048

       (H) The failure of the tax commissioner or county auditor to1049
comply with a provision of this section shall neither excuse a1050
taxpayer from payment of any taxes shown to be owed by himthe1051
taxpayer nor cure any procedural defect in a taxpayer's case.1052

       (I) If the tax commissioner or county auditor fails to1053
substantially comply with the provisions of this section, the1054
commissioner, on application by the taxpayer, shall excuse the1055
taxpayer from penalties and interest arising from the audit or1056
assessment.1057

       A taxpayer shall make application to the commissioner under1058
this division within one year of the date the taxpayer knows of or1059
should have known that the commissioner or county auditor failed1060
to substantially comply with the provisions of this section.1061

       Sec. 5703.60. (A) If a petition for reassessment has been1062
properly filed under a law that specifies that this section1063
applies, the tax commissioner shall proceed as follows:1064

       (1) Except as provided in division (D) of this section, the1065
commissioner may correct the assessment by issuing a corrected1066
assessment. The corrected assessment may reduce or increase the1067
previous assessment, as the commissioner finds proper. The1068
commissioner shall send the corrected assessment by ordinary mail1069
to the address to which the original assessment was sent, unless1070
the petitioner notifies the commissioner of a different address.1071
The commissioner's mailing of the corrected assessment is an1072
assessment timely made and issued to the extent that the original1073
assessment was timely made and issued, notwithstanding any time1074
limitation otherwise imposed by law.1075

       Within sixty days after the mailing of the corrected1076
assessment, the petitioner may file a new petition for1077
reassessment. The petition shall be filed in the same manner as1078
provided by law for filing the original petition. If a new1079
petition is properly filed within the sixty-day period, the1080
commissioner shall proceed under division (A)(2) or (3) of this1081
section. If a new petition is not properly filed within the1082
sixty-day period, the corrected assessment becomes final, and the1083
amount of the corrected assessment is due and payable from the1084
person assessed.1085

       The issuance of a corrected assessment under this division1086
nullifies the petition for reassessment filed before such1087
issuance, and that petition shall not be subject to further1088
administrative review or appeal. The commissioner may issue to1089
the person assessed only one corrected assessment under this1090
division.1091

       (2) The commissioner may cancel the assessment by issuing1092
either a corrected assessment or a final determination. The1093
commissioner may mail the cancellation in the same manner as a1094
corrected assessment under division (A)(1) of this section.1095
Cancellation of an assessment pursuant to this division is not1096
subject to further administrative review or appeal.1097

       (3) If no corrected assessment or final determination is1098
issued under division (A)(1) or (2) of this section, or if a new1099
petition for reassessment is properly filed under division (A)(1)1100
of this section, the commissioner shall review the assessment or1101
corrected assessment petition that is still pending. If the1102
petitioner requests a hearing, the commissioner shall assign a1103
time and place for the hearing and notify the petitioner of such1104
time and place, but the commissioner may continue the hearing from1105
time to time as necessary. Upon completion of the review and1106
hearing, if requested by the person assessed, the commissioner1107
shall either cancel the assessment or corrected assessment by1108
issuing a corrected assessment or final determination under1109
division (A)(2) of this section, or issue a final determination1110
that reduces, affirms, or increases the assessment or corrected1111
assessment, as the commissioner finds proper. If a final1112
determination is issued under this division, a copy of it shall be1113
served on the petitioner in the manner provided by section 5703.371114
of the Revised Code, and it is subject to appeal under section1115
5717.02 of the Revised Code. Only objections decided on the1116
merits by the board of tax appeals or a court shall be given the1117
effect of collateral estoppel or res judicata in considering an1118
application for refund of amounts paid pursuant to the assessment1119
or corrected assessment.1120

       (B) Except as provided in division (D) of this section, in1121
addition to the authority provided in division (A) of this section1122
and division (H) of section 5703.05 of the Revised Code, the tax1123
commissioner, on the commissioner's own motion, may issue a1124
corrected assessment with regard to the assessment of any tax for1125
which a properly filed petition for reassessment would be subject1126
to division (A) of this section. A corrected assessment may be1127
issued under this division only if the original assessment has not1128
been certified to the attorney general for collection under1129
section 131.02 of the Revised Code, or is not an appeal pursuant1130
to section 5717.02 of the Revised Code. The corrected assessment1131
shall not increase the amount of tax, penalty, or additional1132
charge if the statute of limitations to issue a new assessment for1133
such increase has expired. The corrected assessment shall be1134
issued and reviewed in the same manner as a corrected assessment1135
under division (A)(1) of this section.1136

       (C) If the tax commissioner issues a corrected assessment or1137
final determination under this section that reduces an assessment1138
below the amount paid thereon, and the reduction is made at the1139
written request of the party assessed, either through the filing1140
of a proper petition for reassessment or otherwise, the1141
commissioner shall certify any overpayment as a refund due only to1142
the extent a refund could have been timely claimed when the1143
request was made. If the reduction is made on the commissioner's1144
own motion, the commissioner shall certify any overpayment as a1145
refund due only to the extent a refund could have been timely1146
claimed at the time the reduction was made.1147

       (D) The tax commissioner shall not issue a corrected1148
assessment under division (A)(1) or (B) of this section after the1149
party assessed has requested in writing that the commissioner not1150
use that procedure.1151

       (E) This section does not require the tax commissioner to1152
issue a corrected assessment. 1153

       Sec. 5703.70. (A) On the filing of an application for refund1154
under section 3734.905, 4307.05, 4307.07, 5727.28, 5727.91,1155
5728.061, 5733.12, 5735.122, 5735.13, 5735.14, 5735.141, 5735.142,1156
5735.18, 5739.07, 5739.071, 5739.104, 5741.10, 5743.05, 5743.53,1157
or 5749.08 of the Revised Code, if the tax commissioner determines1158
that the amount of the refund to which the applicant is entitled1159
is less than the amount claimed in the application, the1160
commissioner shall give the applicant written notice by ordinary1161
mail of the amount. The notice shall be sent to the address shown1162
on the application for a refund unless the applicant notifies the1163
commissioner of a different address. The applicant shall have1164
sixty days from the date the commissioner mails the notice to1165
provide additional information to the commissioner or request a1166
hearing, or both.1167

       (B) If the applicant neither requests a hearing nor provides1168
additional information to the tax commissioner within the time1169
prescribed by division (A) of this section, the commissioner shall1170
take no further action, and the refund amount denied becomes1171
final.1172

       (C)(1) If the applicant requests a hearing within the time1173
prescribed by division (A) of this section, the tax commissioner1174
shall assign a time and place for the hearing and notify the1175
applicant of such time and place, but the commissioner may1176
continue the hearing from time to time as necessary. After the1177
hearing, the commissioner may make such adjustments to the refund1178
as the commissioner finds proper, and shall issue a final1179
determination thereon.1180

       (2) If the applicant does not request a hearing, but1181
provides additional information, within the time prescribed by1182
division (A) of this section, the commissioner shall review the1183
information, make such adjustments to the refund as the1184
commissioner finds proper, and issue a final determination1185
thereon.1186

       (3) The commissioner shall serve a copy of the final1187
determination made under division (C)(1) or (2) of this section on1188
the applicant in the manner provided in section 5703.37 of the1189
Revised Code, and the decision is final, subject to appeal under1190
section 5717.02 of the Revised Code.1191

       (D) The tax commissioner shall certify to the director of1192
budget and management and treasurer of state for payment from the1193
tax refund fund created by section 5703.052 of the Revised Code,1194
the amount to be refunded under division (B) or (C) of this1195
section.1196

       Sec. 5711.31.  Whenever the assessor assesses any property1197
not listed in or omitted from a return, or whenever the assessor1198
assesses any item or class of taxable property listed in a return1199
by the taxpayer in excess of the value or amount thereof as so1200
listed, or without allowing a claim duly made for deduction from1201
the net book value of accounts receivable, or depreciated book1202
value of personal property used in business, so listed, the1203
assessor shall give notice of such assessment to the taxpayer by1204
mail. The mailing of suchthe notice of assessment shall be1205
prima-facie evidence of the receipt of the same by the person to1206
whom such notice is addressed. With the notice, the assessor shall1207
provide instructions on how to petition for reassessment and1208
request a hearing on the petition.1209

       Within sixty days after the mailing of the notice of1210
assessment prescribed in this section, the party assessed may file1211
with the tax commissioner, in person or by certified mail, a1212
written petition for reassessment in writing, signed by the party1213
assessed, or by thethat party's authorized agent having knowledge1214
of the facts. If the petition is filed by certified mail, the1215
date of the United States postmark placed on the sender's receipt1216
by the postal employee to whom the petition is presented shall be1217
treated as the date of filing. The petition shall have attached1218
thereto and incorporated therein by reference a true copy of the1219
notice of assessment complained of, but the failure to attach a1220
copy of such notice and incorporate it by reference does not1221
invalidate the petition. The petition also shall indicate the1222
objections of the party assessed, but additional objections may be1223
raised in writing if received prior to the date shown on the final1224
determination by the commissioner.1225

       Upon receipt of a properly filed petition, the commissioner1226
shall notify the treasurer of state or the auditor and treasurer1227
of each county having any part of the assessment entered on the1228
tax list or duplicate.1229

       UnlessIf the petitioner waivesrequests a hearing on the1230
petition, the commissioner shall assign a time and place for the1231
hearing on the petition and notify the petitioner of thesuch time1232
and place of the hearing by personal service or certified mail,1233
but the commissioner may continue the hearing from time to time if1234
as necessary.1235

       The commissioner may make such correctioncorrections to the1236
assessment, as the commissioner finds proper. The commissioner1237
shall serve a copy of the commissioner's final determination on1238
the petitioner by personal service or by certified mail, andin1239
the manner provided in section 5703.37 of the Revised Code. The1240
commissioner's decision in the matter shall beis final, subject1241
to appeal as provided inunder section 5717.02 of the Revised1242
Code. The commissioner also shall transmit a copy of the1243
commissioner's final determination to the treasurer of state or1244
applicable county auditor. In the absence of any further appeal,1245
or when a decision of the board of tax appeals or of any court to1246
which the decision has been appealed becomes final, the1247
commissioner shall notify the treasurer of state or the proper1248
county auditor of such final determination. If the final1249
determination orders correction of the assessment, the1250
notification may be in the form of a corrected assessment1251
certificate. Upon receipt of the notification, the treasurer of1252
state or the proper county auditor shall make any corrections to1253
the treasurer's or auditor's records and tax lists and duplicates1254
required in accordance therewith and proceed as prescribed by1255
section 5711.32 or 5725.22 of the Revised Code.1256

       The decision of the commissioner upon such petition for1257
reassessment shall be final with respect to the assessment of all1258
taxable property listed in the return of the taxpayer and shall1259
constitute to that extent the final determination of the1260
commissioner with respect to such assessment. Neither this1261
section nor a final judgment of the board of tax appeals or any1262
court to which such final determination may be appealed shall1263
preclude the subsequent assessment in the manner authorized by law1264
of any taxable property which such taxpayer failed to list in such1265
return, or which the assessor has not theretofore assessed.1266

       As used in this section, "taxpayer" includes financial1267
institutions, dealers in intangibles, and domestic insurance1268
companies as defined in section 5725.01 of the Revised Code.1269

       Sec. 5715.49. No(A) Except as provided in division (B) of1270
this section, no former or present county auditor or member of a1271
county board of revision shall divulge, except in the performance1272
of hisofficial duties or upon the order of the department of1273
taxation, or when called upon to testify in any court or1274
proceeding, any information acquired by him in the exercise of the1275
powers vested in him by the laws relating to taxation, or while1276
claiming to exercise any such powers, as to the transactions,1277
property, or business of any person, company, firm, corporation,1278
association, or partnership. Whoever violates this section shall1279
thereafter be disqualified from acting in any official capacity in1280
connection with the assessment or collection of taxes or1281
recoupment charges.1282

       (B) Division (A) of this section does not prohibit a county1283
auditor from divulging the name and business address of a vendor,1284
a vendor's license number, or information regarding the active or1285
inactive status of a vendor's license issued by the county auditor1286
pursuant to section 5739.17 of the Revised Code.1287

       Sec. 5715.50. No(A) Except as provided in division (B) of1288
this section, no former or present expert, clerk, or employee of a1289
county auditor, county board of revision, or the tax commissioner,1290
and no former or present deputy, assistant, or agent of the tax1291
commissioner shall divulge, except in the performance of his1292
official duties or in hisany report to the county auditor, the1293
county board of revision, or the tax commissioner, or when called1294
upon to testify in any court or proceeding, any information1295
acquired by him in the exercise of the powers vested in him1296
therein by any law, or while claiming to exercise such powers, as1297
to the transactions, property, or business of any person, company,1298
firm, corporation, association, or partnership. Whoever violates1299
this section shall thereafter be disqualified from acting in any1300
official capacity in connection with the assessment or collection1301
of taxes or recoupment charges. The1302

       (B) Division (A) of this section does not prohibit the1303
divulgence of:1304

       (1) The name and address of the statutory agent in this1305
state and the names of officers and directors of any corporation1306
are not within the prohibition of this section;1307

       (2) The name and business address of a vendor, vendor's1308
license number, or information regarding the active or inactive1309
status of a vendor's license issued by the county auditor pursuant1310
to section 5739.17 of the Revised Code.1311

       Sec. 5717.02.  Except as otherwise provided by law, appeals1312
from final determinations by the tax commissioner of any1313
preliminary, amended, or final tax assessments, reassessments,1314
valuations, determinations, findings, computations, or orders made1315
by the commissioner may be taken to the board of tax appeals by1316
the taxpayer, by the person to whom notice of the tax assessment,1317
reassessment, valuation, determination, finding, computation, or1318
order by the commissioner is required by law to be given, by the1319
director of budget and management if the revenues affected by such1320
decision would accrue primarily to the state treasury, or by the1321
county auditors of the counties to the undivided general tax funds1322
of which the revenues affected by such decision would primarily1323
accrue. Appeals from the redetermination by the director of1324
development under division (B) of section 5709.64 or division (A)1325
of section 5709.66 of the Revised Code may be taken to the board1326
of tax appeals by the enterprise to which notice of the1327
redetermination is required by law to be given. Appeals from a1328
decision of the tax commissioner concerning an application for a1329
property tax exemption may be taken to the board of tax appeals by1330
a school district that filed a statement concerning such1331
application under division (C) of section 5715.27 of the Revised1332
Code. Appeals from a redetermination by the director of job and1333
family services under section 5733.42 of the Revised Code may be1334
taken by the person to which the notice of the redetermination is1335
required by law to be given under that section.1336

       Such appeals shall be taken by the filing of a notice of1337
appeal with the board, and with the tax commissioner if the tax1338
commissioner's action is the subject of the appeal, with the1339
director of development if that director's action is the subject1340
of the appeal, or with the director of job and family services if1341
that director's action is the subject of the appeal. The notice1342
of appeal shall be filed within sixty days after service of the1343
notice of the tax assessment, reassessment, valuation,1344
determination, finding, computation, or order by the commissioner1345
or redetermination by the director has been given as provided in1346
section 5703.37, 5709.64, 5709.66, or 5733.42 of the Revised Code.1347
The notice of such appeal may be filed in person or by certified1348
mail, express mail, or authorized delivery service. If the notice1349
of such appeal is filed by certified mail, express mail, or1350
authorized delivery service as provided in section 5703.056 of the1351
Revised Code, the date of the United States postmark placed on the1352
sender's receipt by the postal service ofor the date of receipt1353
recorded by the authorized delivery service shall be treated as1354
the date of filing. The notice of appeal shall have attached1355
thereto and incorporated therein by reference a true copy of the1356
notice sent by the commissioner or director to the taxpayer,1357
enterprise, or other person of the final determination or1358
redetermination complained of, and shall also specify the errors1359
therein complained of, but failure to attach a copy of such notice1360
and incorporate it by reference in the notice of appeal does not1361
invalidate the appeal.1362

       Upon the filing of a notice of appeal, the tax commissioner1363
or the director, as appropriate, shall certify to the board a1364
transcript of the record of the proceedings before the1365
commissioner or director, together with all evidence considered by1366
the commissioner or director in connection therewith. Such1367
appeals or applications may be heard by the board at its office in1368
Columbus or in the county where the appellant resides, or it may1369
cause its examiners to conduct such hearings and to report to it1370
their findings for affirmation or rejection. The board may order1371
the appeal to be heard upon the record and the evidence certified1372
to it by the commissioner or director, but upon the application of1373
any interested party the board shall order the hearing of1374
additional evidence, and it may make such investigation concerning1375
the appeal as it considers proper.1376

       Sec. 5727.26.  (A) The tax commissioner may make an1377
assessment, based on any information in the commissioner's1378
possession, against any natural gas company or combined company1379
that fails to file a return or pay any tax, interest, or1380
additional charge as required by sections 5727.24 to 5727.29 of1381
the Revised Code. The commissioner shall give the company1382
assessed written notice of the assessment asin the manner1383
provided in section 5703.37 of the Revised Code. With the notice,1384
the commissioner shall provide instructions on how to petition for1385
reassessment and request a hearing on the petition. A penalty of1386
up to fifteen per cent may be added to all amounts assessed under1387
this section. The tax commissioner may adopt rules providing for1388
the imposition and remission of the penalty.1389

       (B) If a party to whom the notice of assessment is directed1390
objects to the assessment, the party may file a petition for1391
reassessmentUnless the company assessed, within sixty days after1392
service of the notice of assessment, files with the tax1393
commissioner. The, either personally or by certified mail, a1394
written petition must be made in writing, signed by the party or1395
the party'scompany's authorized agent having knowledge of the1396
facts, and filed with the commissioner, either personally or by1397
certified mail, within sixty days after service of the notice of1398
assessment becomes final, and the amount of the assessment is due1399
and payable from the company assessed to the treasurer of state.1400
The petition shall indicate the objections of the company1401
assessed, but additional objections may be raised in writing if1402
received by the commissioner prior to the date shown on the final1403
determination of the commissioner. Upon receipt of1404

       If a petition for reassessment has been properly filed1405
petition, the commissioner shall notify the treasurer of state.1406

       Unless the petitioner waives a hearing, the commissioner1407
shall grant the petitioner a hearing on the petition, assign a1408
time and place for the hearing, and notify the petitioner of the1409
time and place of the hearing as provided inproceed under section1410
5703.375703.60 of the Revised Code. The commissioner may continue1411
the hearing from time to time, if necessary.1412

       If the party to whom the notice of assessment is directed1413
does not file a petition for reassessment, the assessment is final1414
and the amount of the assessment is due and payable from the1415
company assessed to the treasurer of state.1416

       (C) The tax commissioner may make any correction to the1417
assessment that the commissioner finds proper and shall issue a1418
final determination thereon. The commissioner shall serve a copy1419
of the final determination on the petitioner as provided in1420
section 5703.37 of the Revised Code, and the commissioner's1421
decision in the matter is final, subject to appeal under section1422
5717.02 of the Revised Code. The commissioner also shall transmit1423
a copy of the final determination to the treasurer of state. Only1424
objections decided on the merits by the board of tax appeals or a1425
court shall be given collateral estoppel or res judicata effect in1426
considering an application for refund of an amount paid pursuant1427
to the assessment.1428

       (D)(C) After an assessment becomes final, if any portion of1429
the assessment, including accrued interest, remains unpaid, a1430
certified copy of the tax commissioner's entry making the1431
assessment final may be filed in the office of the clerk of the1432
court of common pleas in the county in which the natural gas1433
company's or combined company's principal place of business is1434
located, or in the office of the clerk of court of common pleas of1435
Franklin county.1436

       The clerk, immediately onImmediately upon the filing of the1437
entry, mustthe clerk shall enter judgment for the state against1438
the company assessed in the amount shown on the entry. The1439
judgment may be filed by the clerk in a loose-leaf book entitled,1440
"special judgments for the public utility excise tax on natural1441
gas and combined companies," and shall have the same effect as1442
other judgments. Execution shall issue upon the judgment at the1443
request of the tax commissioner, and all laws applicable to sales1444
on execution shall apply to sales made under the judgment.1445

       The portion of the assessment not paid within sixty days1446
after the day the assessment was issued shall bear interest at the1447
rate per annum prescribed by section 5703.47 of the Revised Code1448
from the day the tax commissioner issues the assessment until it1449
is paid. Interest shall be paid in the same manner as the tax and1450
may be collected by the issuance of an assessment under this1451
section.1452

       (E)(D) If the tax commissioner believes that collection of1453
the tax will be jeopardized unless proceedings to collect or1454
secure collection of the tax are instituted without delay, the1455
commissioner may issue a jeopardy assessment against the person1456
company liable for the tax. OnImmediately upon the issuance of1457
the jeopardy assessment, the commissioner immediately shall file1458
an entry with the clerk of the court of common pleas in the manner1459
prescribed by division (D)(C) of this section. Notice of the1460
jeopardy assessment shall be served on the partycompany assessed1461
or the party's legal representative ascompany's authorized agent1462
in the manner provided in section 5703.37 of the Revised Code1463
within five days of the filing of the entry with the clerk. The1464
total amount assessed is immediately due and payable, unless the1465
personcompany assessed files a petition for reassessment in1466
accordance with division (B) of this section and provides security1467
in a form satisfactory to the commissioner and in an amount1468
sufficient to satisfy the unpaid balance of the assessment. Full1469
or partial payment of the assessment does not prejudice the1470
commissioner's consideration of the petition for reassessment.1471

       (F)(E) All interest collected by the tax commissioner under1472
this section shall be paid to the treasurer of state, and when1473
paid shall be considered revenue arising from the tax imposed by1474
section 5727.24 of the Revised Code.1475

       (G)(F) No assessment shall be made or issued against a1476
natural gas company or combined company for the tax imposed by1477
section 5727.24 of the Revised Code more than four years after the1478
return date for the period in which the tax was reported, or more1479
than four years after the return for the period was filed,1480
whichever is later.1481

       Sec. 5727.28.  (A) The treasurer of state shall refund to a1482
natural gas company or combined company subject to the tax imposed1483
by section 5727.24 of the Revised Code, the amount of tax paid1484
illegally or erroneously, or paid on an illegal or erroneous1485
assessment. Applications for a refund shall be filed with the tax1486
commissioner, on a form prescribed by the commissioner, within1487
four years of the illegal or erroneous payment of the tax.1488

       On the filing of the application for a refund, the1489
commissioner shall determine the amount of refund due andto which1490
the applicant is entitled. If the amount is not less than that1491
claimed, the commissioner shall certify thatthe amount to the1492
director of budget and management and treasurer of state for1493
payment from the tax refund fund under section 5703.052 of the1494
Revised Code. If the amount is less than that claimed, the1495
commissioner shall proceed in accordance with section 5703.70 of1496
the Revised Code.1497



       If the application for refund is for taxes paid on an illegal1499
or erroneous assessment, the tax commissioner shall include in the1500
certified amount interest calculated at the rate per annum1501
prescribed underby section 5703.47 of the Revised Code from the1502
date of overpayment to the date of the commissioner's1503
certification.1504

       (B) If a natural gas company or combined company entitled to1505
a refund of taxes under this section, or section 5703.70 of the1506
Revised Code, is indebted to the state for any tax or fee1507
administered by the tax commissioner that is paid to the state, or1508
any charge, penalty, or interest arising from such a tax or fee,1509
the amount refundable may be applied in satisfaction of that debt.1510
If the amount refundable is less than the amount of the debt, it1511
may be applied in partial satisfaction of the debt. If the amount1512
refundable is greater than the amount of the debt, the amount1513
remaining after satisfaction of the debt shall be refunded.1514

       (C) In lieu of granting a refund under division (A) or (B)1515
of this section, the tax commissioner may allow a natural gas1516
company or combined company to claim a credit of the amount of the1517
tax refund on the return for the period during which the tax1518
became refundable. The commissioner may require the company to1519
submit information to support a claim for a credit under this1520
division, and the commissioner may disallow the credit if the1521
information is not provided.1522

       Sec. 5727.39.  (A) As used in this section:1523

       (1) "9-1-1 system" has the meaning given in section 4931.401524
of the Revised Code.1525

       (2) "Nonrecurring 9-1-1 charges" means nonrecurring charges1526
approved by the public utilities commission for the telephone1527
network portion of a 9-1-1 system pursuant to section 4931.47 of1528
the Revised Code.1529

       (3) "Eligible nonrecurring 9-1-1 charges" means all1530
nonrecurring 9-1-1 charges for a 9-1-1 system except:1531

       (a) Charges for a system that was not established pursuant1532
to a plan adopted under section 4931.44 of the Revised Code or an1533
agreement under section 4931.48 of the Revised Code; or1534

       (b) Charges for that part of a system established pursuant1535
to such a plan or agreement that are excluded from the credit by1536
division (C)(2) of section 4931.47 of the Revised Code.1537

       (4) "Current year's percentage change in the consumer price1538
index" means the greater of one or one plus the percentage1539
increase in the consumer price index for all urban consumers (U.S.1540
city average, all items), prepared by the United States department1541
of labor, bureau of labor statistics, for JuneDecember of the1542
currentpreceding year over the index for JuneDecember of the1543
immediatelysecond preceding year.1544

       (B) A telephone company shall be allowed a credit against1545
the tax computed under section 5727.38 of the Revised Code equal1546
to the amount of its eligible nonrecurring 9-1-1 charges.1547

       The credit shall be claimed in the company's annual statement1548
required under division (A) of section 5727.31 of the Revised Code1549
that covers the twelve-month period in which the 9-1-1 service for1550
which the credit is claimed becomes available for use. If the tax1551
commissioner determines the credit claimed equals the amount of1552
the company's eligible nonrecurring 9-1-1 charges, hethe1553
commissioner shall credit such amount against the total taxes1554
shown to be due from the company for the current year and shall1555
refund the amount of any overpayment of taxes resulting from the1556
application of such credit. If the credit allowed under this1557
section exceeds the total taxes due for the current year, hethe1558
commissioner shall credit such excess against taxes due for1559
succeeding years until the full amount of the credit is granted.1560

       The estimated taxes required to be paid by section 5727.31 of1561
the Revised Code shall be based on the taxes for the preceding1562
year prior to any credit allowed under this section for that year.1563

       (C)(1) Within thirty days after June 18, 1985, the tax1564
commissioner shall compute the amount that represents twenty-five1565
per cent of the total taxes for all telephone companies computed1566
under section 5727.38 of the Revised Code based on the annual1567
statements required to be filed with the commissioner in1568
September, 1984, under section 5727.31 of the Revised Code. Such1569
amount shall constitute the credit ceiling for 1985.1570

       (2) Each OctoberSeptember, beginning in 19862001, the1571
commissioner shall multiplydetermine the credit ceiling by1572
multiplying the preceding year's credit ceiling by the current1573
preceding calendar year's percentage change in the consumer price1574
index for all urban consumers for the midwest region, as1575
determined by the United States bureau of labor statistics. The1576
product thus obtained shall constitute the credit ceiling for the1577
current year.1578

       (D) After the last day a return may be filed by any1579
telephone company that is eligible to claim a credit under this1580
section, the commissioner shall determine whether the sum of the1581
credits allowed for all prior years plus the sum of the credits1582
claimed for the current year exceeds the current year's credit1583
ceiling. If it does, the credits allowed under this section for1584
the current year shall be reduced by a uniform percentage such1585
that the sum of the credits allowed for the current year plus the1586
sum of the credits allowed for all prior years equals the current1587
year's credit ceiling. Thereafter, no credit shall be granted1588
under this division, except for the remaining portions of any1589
credits allowed in the current or any prior years but that have1590
not been granted.1591

       Sec. 5727.47.  (A) A copyNotice of each assessment certified1592
pursuant to section 5727.23 or 5727.38 of the Revised Code shall1593
be mailed to the public utility, and its mailing shall be1594
prima-facie evidence of its receipt by the public utility to which1595
it is addressed. With the notice, the tax commissioner shall1596
provide instructions on how to petition for reassessment and1597
request a hearing on the petition. If a public utility objects to1598
any assessment certified to it pursuant to such sections, it may1599
file a petition for reassessment with the tax commissioner. The1600
petition must be made in writing, signed by the authorized agent1601
of the utility having knowledge of the facts, and filed with the1602
tax commissioner, in personeither personally or by certified1603
mail, within sixty days fromafter the date thatmailing of the1604
notice of assessment was maileda written petition for1605
reassessment signed by the utility's authorized agent having1606
knowledge of the facts. If the petition is filed by certified1607
mail, the date of the United States postmark placed on the1608
sender's receipt by the postal employee to whom the petition is1609
presented shall be treated as the date of filing. The petition1610
shall indicate the utility's objections, but additional objections1611
may be raised in writing if received by the commissioner prior to1612
the date shown on the final determination by the commissioner.1613

       In the case of a petition seeking a reduction in taxable1614
value filed with respect to an assessment issued under section1615
5727.23 of the Revised Code, the petitioner shall state in the1616
petition the total amount of reduction in taxable value sought by1617
the petitioner. If the petitioner objects to the percentage of1618
true value at which taxable property is assessed by the tax1619
commissioner, the petitioner shall state in the petition the total1620
amount of reduction in taxable value sought both with and without1621
regard to the objection pertaining to the percentage of true value1622
at which its taxable property is assessed. If a petitioner1623
objects to the tax commissioner's apportionment of the taxable1624
value of the petitioner's taxable property, the petitioner shall1625
distinctly state in the petition that the petitioner objects to1626
the tax commissioner's apportionment, and, within forty-five days1627
after filing the petition for reassessment, shall submit the1628
petitioner's proposed apportionment of the taxable value of its1629
taxable property among taxing districts. If a petitioner that1630
objects to the tax commissioner's apportionment fails to state its1631
objections to that apportionment in its petition for reassessment1632
or fails to submit its proposed apportionment within forty-five1633
days after filing the petition for reassessment, the tax1634
commissioner shall dismiss the petitioner's objection to the tax1635
commissioner's apportionment, and the taxable value of the1636
petitioner's taxable property, subject to any adjustment to1637
taxable value pursuant to the petition or appeal, shall be1638
apportioned in the manner used by the tax commissioner in the1639
preliminary or amended preliminary assessment issued under section1640
5727.23 of the Revised Code.1641

       If an additional objection seeking a reduction in taxable1642
value in excess of the reduction stated in the original petition1643
is properly and timely raised with respect to an assessment issued1644
under section 5727.23 of the Revised Code, the petitioner shall1645
state the total amount of the reduction in taxable value sought in1646
the additional objection both with and without regard to any1647
reduction in taxable value pertaining to the percentage of true1648
value at which taxable property is assessed. If a petitioner1649
fails to state the reduction in taxable value sought in the1650
original petition or in additional objections properly raised1651
after the petition is filed, the tax commissioner shall notify the1652
petitioner of the failure by certified mail. If the petitioner1653
fails to notify the tax commissioner in writing of the reduction1654
in taxable value sought in the petition or in an additional1655
objection within thirty days after receiving the tax1656
commissioner's notice, the tax commissioner shall dismiss the1657
petition or the additional objection in which that reduction is1658
sought.1659

       (B)(1) Subject to divisions (B)(2) and (3) of this section,1660
a public utility filing a petition for reassessment regarding an1661
assessment issued under section 5727.23 or 5727.38 of the Revised1662
Code shall pay the tax with respect to the assessment objected to1663
as required by law. The acceptance of any tax payment by the1664
treasurer of state or any county treasurer shall not prejudice any1665
claim for taxes on final determination by the tax commissioner or1666
final decision by the board of tax appeals or any court.1667

       (2) If a public utility properly and timely files a petition1668
for reassessment regarding an assessment issued under section1669
5727.23 of the Revised Code, the petitioner shall pay the tax as1670
prescribed by divisions (B)(2)(a), (b), and (c) of this section:1671

       (a) If the petitioner does not object to the tax1672
commissioner's apportionment of the taxable value of the1673
petitioner's taxable property, the petitioner is not required to1674
pay the part of the tax otherwise due on the taxable value that1675
the petitioner seeks to have reduced, subject to division1676
(B)(2)(c) of this section.1677

       (b) If the petitioner objects to the tax commissioner's1678
apportionment of the taxable value of the petitioner's taxable1679
property, the petitioner is not required to pay the tax otherwise1680
due on the part of the taxable value apportioned to any taxing1681
district that the petitioner objects to, subject to division1682
(B)(2)(c) of this section. If, pursuant to division (A) of this1683
section, the petitioner has, in a proper and timely manner,1684
apportioned taxable value to a taxing district to which the tax1685
commissioner did not apportion the petitioner's taxable value, the1686
petitioner shall pay the tax due on the taxable value that the1687
petitioner has apportioned to the taxing district, subject to1688
division (B)(2)(c) of this section.1689

       (c) If a petitioner objects to the percentage of true value1690
at which taxable property is assessed by the tax commissioner, the1691
petitioner shall pay the tax due on the basis of the percentage of1692
true value at which the public utility's taxable property is1693
assessed by the tax commissioner. In any case, the petitioner's1694
payment of tax shall not be less than the amount of tax due based1695
on the taxable value reflected on the last appeal notice issued by1696
the tax commissioner under division (C) of this section. Until1697
the county auditor receives notification under division (E) of1698
this section and proceeds under section 5727.471 of the Revised1699
Code to issue any refund that is found to be due, the county1700
auditor shall not issue a refund for any increase in the reduction1701
in taxable value that is sought by a petitioner later than1702
forty-five days after the petitioner files the original petition1703
as required under division (A) of this section.1704

       (3) Any part of the tax that, under division (B)(2)(a)) or1705
(b) of this section, is not paid shall be collected upon receipt1706
of the notification as provided in section 5727.471 of the Revised1707
Code with interest thereon computed in the same manner as interest1708
is computed under division (E) of section 5715.19 of the Revised1709
Code, subject to any correction of the assessment by the tax1710
commissioner under division (E) of this section or the final1711
judgment of the board of tax appeals or a court to which the1712
board's final judgment is appealed. The penalty imposed under1713
section 323.121 of the Revised Code shall apply only to the unpaid1714
portion of the tax if the petitioner's tax payment is less than1715
the amount of tax due based on the taxable value reflected on the1716
last appeal notice issued by the tax commissioner under division1717
(C) of this section.1718

       (C) Upon receipt of a properly filed petition for1719
reassessment, the tax commissioner shall notify the treasurer of1720
state or the auditor of each county to which the assessment1721
objected to has been certified. In the case of a petition with1722
respect to an assessment issued under section 5727.23 of the1723
Revised Code, the tax commissioner shall issue an appeal notice1724
within thirty days after receiving the amount of the taxable value1725
reduction and apportionment changes sought by the petitioner in1726
the original petition or in any additional objections properly and1727
timely raised by the petitioner. The appeal notice shall indicate1728
the amount of the reduction in taxable value sought in the1729
petition or in the additional objections and the extent to which1730
the reduction in taxable value and any change in apportionment1731
requested by the petitioner would affect the tax commissioner's1732
apportionment of the taxable value among taxing districts in the1733
county as shown in the assessment. If a petitioner is seeking a1734
reduction in taxable value on the basis of a lower percentage of1735
true value than the percentage at which the tax commissioner1736
assessed the petitioner's taxable property, the appeal notice1737
shall indicate the reduction in taxable value sought by the1738
petitioner without regard to the reduction sought on the basis of1739
the lower percentage and shall indicate that the petitioner is1740
required to pay tax on the reduced taxable value determined1741
without regard to the reduction sought on the basis of a lower1742
percentage of true value, as provided under division (B)(2)(c) of1743
this section. The appeal notice shall include a statement that1744
the reduced taxable value and the apportionment indicated in the1745
notice are not final and are subject to adjustment by the tax1746
commissioner or by the board of tax appeals or a court on appeal. 1747
If the tax commissioner finds an error in the appeal notice, the1748
tax commissioner may amend the notice, but the notice is only for1749
informational and tax payment purposes; the notice is not subject1750
to appeal by any person. The tax commissioner also shall mail a1751
copy of the appeal notice to the petitioner. Upon the request of1752
a taxing authority, the county auditor may disclose to the taxing1753
authority the extent to which a reduction in taxable value sought1754
by a petitioner would affect the apportionment of taxable value to1755
the taxing district or districts under the taxing authority's1756
jurisdiction, but such a disclosure does not constitute a notice1757
required by law to be given for the purpose of section 5717.02 of1758
the Revised Code.1759

       (D) UnlessIf the petitioner waivesrequests a hearing on the1760
petition, the tax commissioner shall assign a time and place for1761
the hearing on the petition and notify the petitioner of thesuch1762
time and place of the hearing by personal service or certified1763
mail, but the commissioner may continue the hearing from time to1764
time ifas necessary.1765

       (E) The tax commissioner may make such correction1766
corrections to the assessment as the tax commissioner finds1767
proper. The tax commissioner shall serve a copy of the1768
commissioner's final determination on the petitioner by personal1769
service or certified mail, andin the taxmanner provided in1770
section 5703.37 of the Revised Code. The commissioner's decision1771
in the matter shall be final, subject to appeal as provided in1772
under section 5717.02 of the Revised Code. The tax commissioner1773
also shall transmit a copy of the final determination to the1774
treasurer of state or applicable county auditor. In the absence1775
of any further appeal, or when a decision of the board of tax1776
appeals or of any court to which the decision has been appealed1777
becomes final, the tax commissioner shall notify the public1778
utility and, as appropriate, the treasurer of state who shall1779
proceed under section 5727.42 of the Revised Code, or the1780
applicable county auditor who shall proceed under section 5727.4711781
of the Revised Code. In any notification regarding an assessment1782
issued under section 5727.23 of the Revised Code, the tax1783
commissioner shall include a notice of the amount of any state1784
basic aid overpayment, as defined in section 5727.471 of the1785
Revised Code, to a school district affected by the notification.1786
Upon the tax commissioner's request, the department of education1787
shall certify to the tax commissioner the amount of any state1788
basic aid overpayment to a school district.1789

       The notification made under this division is not subject to1790
further appeal.1791

       (F) On appeal, no adjustment shall be made in the tax1792
commissioner's assessment issued under section 5727.23 of the1793
Revised Code that reduces the taxable value of a petitioner's1794
taxable property by an amount that exceeds the reduction sought by1795
the petitioner in its petition for reassessment or in any1796
additional objections properly and timely raised after the1797
petition is filed with the tax commissioner.1798

       Sec. 5727.471.  (A) As used in this section:1799

       (1) "Notification", "notification" means notification1800
required by section 5727.47 of the Revised Code to be sent by the1801
tax commissioner to the county auditor as to the disposition of a1802
petition for reassessment, or of a decision of the board of tax1803
appeals or any court with respect to an assessment of public1804
utility property taxes.1805

       (2) "State basic aid overpayment" for a school district means1806
the amount by which the payment computed for a fiscal year under1807
section 3317.022 of the Revised Code exceeds the amount that would1808
have been computed for that fiscal year if the taxable value1809
certified under division (A)(2) and (B) of section 3317.021 of the1810
Revised Code for the tax year preceding that fiscal year had been1811
the taxable value shown in the notification for that tax year.1812

       (B) On receipt of the notification, the auditor shall1813
determine whether there has been an underpayment or overpayment of1814
taxes by the public utility. In the case of an underpayment of1815
taxes, the auditor shall notify the county treasurer of the1816
amount, and the treasurer shall proceed to collect the1817
underpayment as required by law. From the proceeds of the1818
underpayment so collected that are otherwise payable to a city,1819
local, or exempted village school district, the county treasurer1820
shall deduct and withhold an amount equal to the state basic aid1821
overpayment, if any, to the school district, plus interest on that1822
amount at the rate prescribed by section 5703.47 of the Revised1823
Code from the last day of the fiscal year for which the state1824
basic aid payment was made to the day the underpayment is1825
collected. The county treasurer shall pay the amount deducted and1826
withheld to the treasurer of state, who shall credit the payment1827
to the general revenue fund. If the state basic aid overpayment1828
and interest exceeds the amount of the tax underpayment collected1829
that is otherwise payable to the school district, the county1830
treasurer shall collect the difference from the school district or1831
deduct and withhold the difference from the next distribution or1832
advance payment of property taxes to the district, and shall pay1833
that difference to the treasurer of state, who shall credit the1834
payment to the general revenue fund.1835

       In the case of an overpayment of taxes, the auditor shall do1836
any one of the following:1837

       (1) Refund the full amount of the overpayment;1838

       (2) Refund a portion of the overpayment and prorate the1839
remaining balance as a credit against future taxes that may be1840
charged to the public utility;1841

       (3) Prorate the full amount of the overpayment as a credit1842
against future taxes that may be charged to the public utility.1843

       (C)(1) The auditor shall have discretion as to which method1844
to use and shall advise the public utility of the auditor's1845
decision within sixty days after receipt of the notification. The1846
auditor shall make payment of any refund under division (B)(1) or1847
(2) of this section within ninety days after receipt of the1848
notification. Except as otherwise provided in division (C)(2) of1849
this section, any amount to be credited under division (B)(2) or1850
(3) of this section shall be applied to all or a part of the taxes1851
otherwise due from the public utility on real and public utility1852
property tax installment due dates after the date on which the1853
notification was received, but shall not be spread over more than1854
the next ten ensuing installment due dates. If any portion of the1855
overpayment has not been refunded or credited by the tenth such1856
tax installment due date after the date on which the notification1857
was received, the auditor immediately shall refund that portion.1858

       (2) The tax commissioner may certify to a county auditor, in1859
writing, that a public utility is no longer required to file a1860
report under section 5727.08 of the Revised Code. Within ninety1861
days of the date of such certification, the auditor shall refund1862
to the utility, with applicable interest, the portion of any1863
overpayment that has not been refunded or credited to the utility1864
under this section.1865

       (D) The auditor shall add interest to the amount of any1866
overpayment of taxes at the rate per calendar month, rounded to1867
the nearest one-hundredth of one per cent, equal to one-twelfth of1868
the rate per annum prescribed by section 5703.47 of the Revised1869
Code. The interest shall begin to accrue from the first day of1870
the month following the date of the overpayment until the last day1871
of the month preceding the date the overpayment or portion of the1872
overpayment is refunded or credited, and shall be computed1873
separately on each amount actually refunded or credited. In1874
computing interest on credits, when an overpayment is credited1875
against an installment of current taxes due from the utility1876
pursuant to this section, the overpayment shall be considered to1877
have been credited on the last date on which those taxes may be1878
paid without penalty.1879

       (E) The refund and crediting of any overpayment, including1880
interest, shall be paid from or credited against the fund or funds1881
and the taxing districts to which the overpayment originally was1882
paid, in proportion to the amount of the overpayment received. The1883
auditor shall correct the auditor's tax lists in accordance with1884
the refund or credit, and shall certify corrections in the tax1885
duplicates to the county treasurer. At each settlement affected1886
by a refund or credit under this section, the amount of the refund1887
or credit shall be deducted from the amount of any taxes or1888
assessments distributable to the county or any taxing unit in the1889
county that has received the benefit of the taxes or assessment1890
previously overpaid, in proportion to the overpayment previously1891
received.1892

       Sec. 5727.89.  (A) The tax commissioner may make an1893
assessment, based on any information in the commissioner's1894
possession, against any natural gas distribution company, electric1895
distribution company, self-assessing purchaser, or qualified end1896
user that fails to file a return or pay any tax, interest, or1897
additional charge as required by sections 5727.80 to 5727.95 of1898
the Revised Code.1899

       When information in the possession of the tax commissioner1900
indicates that a person liable for the tax imposed by section1901
5727.81 or 5727.811 of the Revised Code has not paid the full1902
amount of tax due, the commissioner may audit a representative1903
sample of the person's business and may issue an assessment based1904
on the audit. The commissioner shall give the person assessed1905
written notice of the assessment by personal service or certified1906
mailin the manner provided in section 5703.37 of the Revised1907
Code. With the notice, the commissioner shall provide instructions1908
on how to petition for reassessment and request a hearing on the1909
petition.1910

       The tax commissioner may issue an assessment for which the1911
tax imposed by section 5727.81 or 5727.811 of the Revised Code was1912
due and unpaid on the date the person was informed by an agent of1913
the tax commissioner of an investigation or audit of the person.1914
Any payment of the tax for the period covered by the assessment,1915
after the person is so informed, shall be credited against the1916
assessment.1917

       A penalty of up to fifteen per cent may be added to all1918
amounts assessed under this section. The commissioner may adopt1919
rules providing for the imposition and remission of penalties.1920

       (B) Unless the party assessed files with the tax1921
commissioner within sixty days after service of the notice of1922
assessment, either personally or by certified mail, a written1923
petition for reassessment signed by the party assessed or thethat1924
party's authorized agent having knowledge of the facts, the1925
assessment isbecomes final and the amount of the assessment is1926
due and payable from the party assessed to the treasurer of state.1927
The petition shall indicate the objections of the party assessed,1928
but additional objections may be raised in writing if received by1929
the commissioner prior to the date shown on the final1930
determination of the tax commissioner. The commissioner shall1931
grant the petitioner a hearing on the petition, unless waived by1932
the petitioner.1933

       (C) The commissioner may make any correction to the1934
assessment that the commissioner finds proper and shall issue a1935
final determination thereon. The commissioner shall serve a copy1936
of the final determination on the petitioner either by personal1937
service or by certified mail as provided in section 5703.37 of the1938
Revised Code, and the commissioner's decision in the matter is1939
final, subject to appeal under section 5717.02 of the Revised1940
Code. If the petition has been properly filed, the commissioner1941
shall proceed under section 5703.60 of the Revised Code.1942

       (D)(C) After an assessment becomes final, if any portion of1943
the assessment, including accrued interest, remains unpaid, a1944
certified copy of the tax commissioner's entry making the1945
assessment final may be filed in the office of the clerk of the1946
court of common pleas in the county in which the party assessed1947
resides or in which the party's business is conducted. If the1948
party assessed maintains no place of business in this state and is1949
not a resident of this state, the certified copy of the entry may1950
be filed in the office of the clerk of the court of common pleas1951
of Franklin county.1952

       The clerk, immediatelyImmediately upon the filing of the1953
entry, the clerk shall enter a judgment for the state against the1954
person assessed in the amount shown on the entry. The judgment1955
may be filed by the clerk in a loose-leaf book entitled "special1956
judgments for the distribution excise taxes," and shall have the1957
same effect as other judgments. Execution shall issue upon the1958
judgment at the request of the tax commissioner, and all laws1959
applicable to sales on execution shall apply to sales made under1960
the judgment.1961

       The portion of the assessment not paid within sixty days1962
after the day the assessment was issued shall bear interest at the1963
rate per annum prescribed by section 5703.47 of the Revised Code1964
from the day the tax commissioner issues the assessment until the1965
day the assessment is paid. Interest shall be paid in the same1966
manner as the tax and may be collected by the issuance of an1967
assessment under this section.1968

       (E)(D) If the tax commissioner believes that collection of1969
the tax imposed by section 5727.81 or 5727.811 of the Revised Code1970
will be jeopardized unless proceedings to collect or secure1971
collection of the tax are instituted without delay, the1972
commissioner may issue a jeopardy assessment against the person1973
liable for the tax. UponImmediately upon the issuance of the1974
jeopardy assessment, the commissioner immediately shall file an1975
entry with the clerk of the court of common pleas in the manner1976
prescribed by division (D)(C) of this section. Notice of the1977
jeopardy assessment shall be served on the party assessed or the1978
party's legal representative within five days of the filing of the1979
entry with the clerk. The total amount assessed is immediately1980
due and payable, unless the party assessed files a petition for1981
reassessment in accordance with division (B) of this section and1982
provides security in a form satisfactory to the commissioner and1983
in an amount sufficient to satisfy the unpaid balance of the1984
assessment. Full or partial payment of the assessment does not1985
prejudice the commissioner's consideration of the petition for1986
reassessment.1987

       (F)(E) All money collected by the tax commissioner under1988
this section shall be paid to the treasurer of state, and when1989
paid shall be considered as revenue arising from the taxes imposed1990
by sections 5727.81 and 5727.811 of the Revised Code.1991

       Sec. 5727.91.  (A) The treasurer of state shall refund the1992
amount of tax paid under section 5727.81 or 5727.811 of the1993
Revised Code that was paid illegally or erroneously, or paid on an1994
illegal or erroneous assessment. A natural gas distribution1995
company, an electric distribution company, or a self-assessing1996
purchaser shall file an application for a refund with the tax1997
commissioner on a form prescribed by the commissioner, within four1998
years of the illegal or erroneous payment of the tax.1999

       UponOn the filing of the application, the commissioner shall2000
determine the amount of refund due andto which the applicant is2001
entitled. If the amount is not less than that claimed, the2002
commissioner shall certify that amount to the director of budget2003
and management and the treasurer of state for payment from the tax2004
refund fund under section 5703.052 of the Revised Code. If the2005
amount is less than that claimed, the commissioner shall proceed2006
in accordance with section 5703.70 of the Revised Code.2007

       If the application for refund is for taxes paid on an illegal2008
or erroneous assessment, the tax commissioner shall include in the2009
certified amount interest calculated at the rate per annum under2010
prescribed by section 5703.47 of the Revised Code from the date of2011
overpayment to the date of the commissioner's certification.2012

       (B) If a natural gas distribution company or an electric2013
distribution company entitled to a refund of taxes under this2014
section, or section 5703.70 of the Revised Code, is indebted to2015
the state for any tax or fee administered by the tax commissioner2016
that is paid to the state, or any charge, penalty, or interest2017
arising from such a tax or fee, the amount refundable may be2018
applied in satisfaction of the debt. If the amount refundable is2019
less than the amount of the debt, it may be applied in partial2020
satisfaction of the debt. If the amount refundable is greater2021
than the amount of the debt, the amount remaining after2022
satisfaction of the debt shall be refunded. If the natural gas2023
distribution company or electric distribution company has more2024
than one such debt, any debt subject to section 5739.33 or2025
division (G) of section 5747.07 of the Revised Code shall be2026
satisfied first. This section applies only to debts that have2027
become final.2028

       (C)(1) Any electric distribution company that can2029
substantiate to the tax commissioner that the tax imposed by2030
section 5727.81 of the Revised Code was paid on electricity2031
distributed via wires and consumed at a location outside of this2032
state may claim a refund in the manner and within the time period2033
prescribed in division (A) of this section.2034

       (2) Any natural gas distribution company that can2035
substantiate to the tax commissioner that the tax imposed by2036
section 5727.811 of the Revised Code was paid on natural gas2037
distributed via its facilities and consumed at a location outside2038
of this state may claim a refund in the manner and within the time2039
period prescribed in division (A) of this section.2040

       (D) Before a refund is issued under this section or section2041
5703.70 of the Revised Code, a natural gas company or an electric2042
distribution company shall certify, as prescribed by the tax2043
commissioner, that it either did not include the tax imposed by2044
section 5727.81 of the Revised Code in the case of an electric2045
distribution company, or the tax imposed by section 5727.811 of2046
the Revised Code in the case of a natural gas distribution2047
company, in its distribution charge to its customer upon which a2048
refund of the tax is claimed, or it has refunded or credited to2049
the customer the excess distribution charge related to the tax2050
that was erroneously included in the customer's distribution2051
charge.2052

       Sec. 5727.93.  (A) No person shall distribute electricity or2053
natural gas to a meter of an end user in this state or to an2054
unmetered location in this state if that person is not registered2055
with the tax commissioner as an electric distribution company or a2056
natural gas distribution company.2057

       (B) Each person required to register under division (A) of2058
this section shall register prior to distributing electricity or2059
natural gas to a meter of an end user in this state or to an2060
unmetered location in this state. The tax commissioner shall2061
prescribe the form of the registration application. The2062
commissioner shall assign an identification number to each2063
registration and notify the registrant of that number. The2064
registration shall remain in effect until canceled in writing by2065
the registrant upon the cessation of distributing electricity or2066
natural gas to a meter of an end user in this state or to an2067
unmetered location in this state, or until such registration is2068
denied, revoked, or canceled by the commissioner. A registration2069
may be revoked or canceled by the tax commissioner as provided by2070
Chapter 119. of the Revised Code, for failure of an electric2071
distribution company to pay the tax imposed by section 5727.81 of2072
the Revised Code, failure of a natural gas distribution company to2073
pay the tax imposed by section 5727.811 of the Revised Code, or2074
failure of an electric distribution company or a natural gas2075
distribution company to comply with sections 5727.80 and 5727.822076
to 5727.95 of the Revised Code. A company whose registration is2077
denied may petition for a hearing, in accordance with the2078
procedures set forth in divisionsdivision (B) and (C) of section2079
5727.89 of the Revised Code, not later than thirty days after2080
receiving the denial, and the final determination is subject to2081
appeal under section 5717.02 of the Revised Code.2082

       (C) The tax commissioner shall maintain a list of the2083
companies registered under this section. The list shall contain2084
the name and address of each company registered by the2085
commissioner. The list and subsequent updates of it shall be open2086
to public inspection.2087

       Sec. 5728.01.  As used in sections 5728.02 to 5728.14 of the2088
Revised Code:2089

       (A) "Motor vehicle" means everything on wheels that is2090
self-propelled, other than by muscular power or power collected2091
from electric trolley wires and other than vehicles or machinery2092
not designed for or employed in general highway transportation,2093
used to transport or propel property over a public highway.2094

       (B) "Commercial car" means any motor vehicle used for2095
transporting property, wholly on its own structure on a public2096
highway.2097

       (C) "Commercial tractor" means any motor vehicle designed and2098
used to propel or draw a trailer or semi-trailer or both on a2099
public highway without having any provision for carrying loads2100
independently of such trailer or semi-trailer.2101

       (D) "Trailer" means everything on wheels that is not2102
self-propelled, except vehicles or machinery not designed for or2103
employed in general highway transportation, used for carrying2104
property wholly on its own structure and for being drawn by a2105
motor vehicle on a public highway, including any such vehicle when2106
formed by or operated as a combination of a semi-trailer and a2107
vehicle of the dolly type such as that commonly known as a trailer2108
dolly. "Trailer" does not include manufactured homes as defined in2109
division (C)(4) of section 3781.06 of the Revised Code or mobile2110
homes as defined in division (O) of section 4501.01 of the Revised2111
Code.2112

       (E) "Semi-trailer" means everything on wheels that is not2113
self-propelled, except vehicles or machinery not designed for or2114
employed in general highway transportation, designed and used for2115
carrying property on a public highway when being propelled or2116
drawn by a commercial tractor when part of its own weight or the2117
weight of its load, or both, rest upon and is carried by a2118
commercial tractor.2119

       (F) "Commercial tandem" means any commercial car and trailer2120
or any commercial tractor, semi-trailer, and trailer when fastened2121
together and used as one unit.2122

       (G) "Commercial tractor combination" means any commercial2123
tractor and semi-trailer when fastened together and used as one2124
unit.2125

       (H) "Axle" means two or more load carrying wheels mounted in2126
a single transverse vertical plane.2127

       (I) "Public highway" means any highway, road, or street2128
dedicated to public use except, including a highway under the2129
control and jurisdiction of the Ohio turnpike commission created2130
by the provisions of section 5537.02 of the Revised Code and land2131
and lots over which the public, either as user or owner, generally2132
has a right to pass even though such land or lots are closed2133
temporarily by public authorities for the purpose of construction,2134
reconstruction, maintenance, or repair.2135

       Sec. 5728.02.  (A) Except as provided in section 5728.03 of2136
the Revised Code, every person who is liable for the tax imposed2137
by section 5728.06 of the Revised Code on the operation of a2138
commercial car with three or more axles when operated alone or as2139
part of a commercial tandem, a commercial car with two axles that2140
is to be operated as part of a commercial tandem with a gross2141
vehicle weight or a registered gross vehicle weight exceeding2142
twenty-six thousand pounds, or a commercial tractor that is, or is2143
to be, operated or driven upon a public highway shall cause to be2144
filed annually with the tax commissioner a written application for2145
a highwayfuel use permit on blank forms to be furnished by the2146
commissioner for that purpose.2147

       Each application for a highwayfuel use permit for a2148
commercial car or a commercial tractor shall contain any2149
information the tax commissioner prescribes.2150

       (B) Upon receipt of the application, the tax commissioner2151
shall issue to the person making the application a highwayfuel2152
use permit and any identification device that the commissioner2153
considers necessary for the proper administration of this chapter.2154
The permit and the identification device shall be of a design and2155
contain any information the commissioner considers necessary. The2156
identification device shall be displayed on the commercial car or2157
commercial tractor for which it was issued at all times in the2158
manner the commissioner prescribes. The highwayfuel use permits2159
and the identification device shall not be transferable. In case2160
of the loss of a highwayfuel use permit or identification device,2161
the commissioner shall issue a duplicate of the permit or device.2162

       The highwayfuel use permit shall be valid until it expires2163
or is suspended or surrendered.2164

       Sec. 5728.03.  (A) In lieu of filing an application for an2165
annual highwayfuel use permit under section 5728.02 of the2166
Revised Code and in lieu of filing returns under section 5728.082167
of the Revised Code, a person who is the owner of a commercial car2168
with three or more axles when operated alone or as part of a2169
commercial tandem, a commercial car with two axles that is to be2170
operated as part of a commercial tandem with a gross vehicle2171
weight or a registered gross vehicle weight exceeding twenty-six2172
thousand pounds, or a commercial tractor that is, or is to be,2173
operated or driven upon a public highway, may file an application2174
with the tax commissioner for a single-trip highwayfuel use2175
permit. The application shall be based on rules adopted by the2176
tax commissioner and shall include an amount estimated to be2177
substantially equivalent to the highway use and motor vehicle fuel2178
use tax liability that the applicant will incur by driving on the2179
highways of this state during the period covered by the2180
single-trip permit. The amount so estimated shall be considered2181
to be the highway use tax and motor vehicle fuel use tax liability2182
so incurred.2183

       The commissioner may authorize independent permit services or2184
other persons to issue single-trip highwayfuel use permits.2185

       (B) The tax commissioner shall adopt rules establishing all2186
of the following:2187

       (1) Procedures for the issuance of single-trip permits;2188

       (2) The length of time the permits are effective;2189

       (3) Requirements that independent permit services or other2190
persons must meet to be authorized to issue single-trip highway2191
fuel use permits and procedures for obtaining that authorization;2192

       (4) Estimates of the amount substantially equivalent to the2193
highway use and motor vehicle fuel use tax liability that an2194
applicant will incur by driving on the highways of this state2195
during the period covered by the permit.2196

       (C) No person whose highwayfuel use permit issued under2197
section 5728.02 of the Revised Code is currently under suspension2198
in accordance with section 5728.11 of the Revised Code shall be2199
issued a single-trip highwayfuel use permit under this section.2200

       (D) All moneys collected pursuant to this section shall be2201
deposited in the state treasury in accordance with section 5728.082202
of the Revised Code.2203

       Sec. 5728.04.  It shall beis unlawful, on and after2204
September 30, 1955, for any person to operate a commercial car2205
with three or more axles when operated alone or as part of a2206
commercial tandem, a commercial car with two axles that is to be2207
operated as part of a commercial tandem with a gross vehicle2208
weight or a registered gross vehicle weight exceeding twenty-six2209
thousand pounds, or a commercial tractor when operated alone or as2210
part of a commercial tractor combination or commercial tandem on a2211
public highway without a valid highwayfuel use permit for such2212
commercial car or commercial tractor.2213

       The judge or magistrate of any court finding any person2214
guilty of unlawfully operating a commercial car or commercial2215
tractor as provided for in this section shall immediately notify2216
the tax commissioner of such violation and shall transmit to the2217
commissioner the name and the permanent address of the owner of2218
the commercial car or commercial tractor operated in violation of2219
this section, the registration number, the state of registration,2220
and the certificate of title number of the commercial car or2221
commercial tractor.2222

       Sec. 5735.311.        Sec. 5728.05.  The tax commissioner may enter into2223
cooperative reciprocal agreements providing for the imposition of2224
motor fuel use taxes on an apportionment or allocation basis with2225
the proper authority of any state, any commonwealth, the District2226
of Columbia, a state or province of a foreign country, or a2227
territory or possession of the United States or of a foreign2228
country. The agreement may provide for determining the base state2229
for fuel users, users' records requirements, audit procedures,2230
exchange of information, the definition of qualified motor2231
vehicles, bonding requirements, reporting requirements, reporting2232
periods, specifying uniform penalty and interest for late2233
reporting or payment, determining methods of collecting and2234
remitting fuel use taxes to member jurisdictions, and such other2235
provisions as will facilitate the administration of the agreement.2236

       To any extent provisions of the Revised Code governing the2237
administration of the tax levied by section 5735.315728.06 of the2238
Revised Code are irreconcilable with provisions of a reciprocal2239
agreement entered into pursuant to this section, the provisions of2240
the reciprocal agreement prevail.2241

       The agreement may provide for the tax commissioner to audit2242
the records of persons based in this state for purposes of the2243
agreement in order to determine whether the fuel use taxes due2244
each member jurisdiction are properly reported and paid. If any2245
person based in this state fails to properly report and pay fuel2246
use taxes as required by the agreement, the tax commissioner may2247
issue an assessment against that person pursuant to the provisions2248
of the agreement and section 5728.10 of the Revised Code.2249

       The tax commissioner may exchange with the proper officers of2250
other member jurisdictions and with the repository of the2251
agreement any information in the commissioner's possession2252
relative to the administration and enforcement of the agreement.2253
The exchange of information under this section is not a violation2254
of section 5703.21 or 5715.50 of the Revised Code. For purposes2255
of this section, "proper officers of other member jurisdictions"2256
includes officers of any agency, department, or instrumentality of2257
another member jurisdiction with authority under the laws of that2258
jurisdiction to administer or enforce motor vehicle or taxation2259
laws.2260

       The tax commissioner may adopt rules for the administration2261
and enforcement of the agreement entered into pursuant to this2262
section, and shall prescribe and supply necessary forms.2263

       The commissioner may provide information necessary for the2264
administration and enforcement of this chapter to persons who2265
collect such information for the purpose of providing it to other2266
persons that are responsible for the administration and2267
enforcement of motor vehicle or tax laws. The information2268
provided by the commissioner shall identify the taxpayer and the2269
status of the taxpayer's account obtained from the filings2270
required under sections 5728.01 to 5728.14 of the Revised Code.2271
Providing such information under this section is not a violation2272
of section 5703.21 or 5715.50 of the Revised Code.2273

       Sec. 5728.06. For the purpose of providing revenues to pay2274
the cost of administering and enforcing the laws pertaining to the2275
levy and collection of the tax imposed by this section, to provide2276
funds to pay the state's share of the cost of constructing or2277
reconstructing highways and eliminating railway grade crossings on2278
the major thoroughfares of the state highway system and urban2279
extensions thereof, and to pay the interest, principal, and2280
charges on highway obligations issued pursuant to Section 2i of2281
Article VIII, Ohio Constitution, and sections 5528.30 and 5528.312282
of the Revised Code, there is hereby levied a highway use tax upon2283
each commercial car with three or more axles when operated alone2284
or as part of a commercial tandem, each commercial car with two2285
axles used as a part of a commercial tandem with a gross vehicle2286
weight or a registered gross vehicle weight exceeding twenty-six2287
thousand pounds, and each commercial tractor operated alone or2288
used as part of a commercial tractor combination or commercial2289
tandem. Except as provided in section 5728.05 of the Revised2290
Code, the rates shall be as follows:2291

       (A) One-half cent for each mile traveled on a public highway2292
in Ohio by each commercial car with three or more axles;2293

       (B) One cent for each mile traveled on a public highway in2294
Ohio by a commercial tandem with three axles or a commercial2295
tractor operated alone or as part of a commercial tractor2296
combination with three axles;2297

       (C) One and one-half cents for each mile traveled on a2298
public highway in Ohio by a commercial tractor operated as a part2299
of a commercial tractor combination with four axles;2300

       (D) Two cents for each mile traveled on a public highway in2301
Ohio by a commercial tractor operated as part of a commercial2302
tractor combination with a total of five or more axles;2303

       (E) Two and one-half cents for each mile traveled on a2304
public highway in Ohio by each commercial car or commercial2305
tractor operated as part of a commercial tandem with four or more2306
axles.For the following purposes, an excise tax is hereby imposed2307
on the use of motor fuel to operate on the public highways of this2308
state a commercial car with three or more axles operated alone or2309
as part of a commercial tandem, a commercial car with two axles2310
operated as part of a commercial tandem having a gross vehicle2311
weight or registered gross vehicle weight exceeding twenty-six2312
thousand pounds, or a commercial tractor operated alone or as part2313
of a commercial tractor combination or commercial tandem: to2314
provide revenue for maintaining the state highway system, to widen2315
existing surfaces on such highways, to resurface such highways, to2316
enable the counties of the state properly to plan for, maintain,2317
and repair their roads, to enable the municipal corporations to2318
plan, construct, reconstruct, repave, widen, maintain, repair,2319
clear, and clean public highways, roads, and streets; to pay that2320
portion of the construction cost of a highway project that a2321
county, township, or municipal corporation normally would be2322
required to pay, but that the director of transportation, pursuant2323
to division (B) of section 5531.08 of the Revised Code, determines2324
instead will be paid from moneys in the highway operating fund; to2325
maintain and repair bridges and viaducts; to purchase, erect, and2326
maintain street and traffic signs and markers; to purchase, erect,2327
and maintain traffic lights and signals; to pay the costs2328
apportioned to the public under section 4907.47 of the Revised2329
Code; and to supplement revenue already available for such2330
purposes, to distribute equitably among those persons using the2331
privilege of driving motor vehicles upon such highways and streets2332
the cost of maintaining and repairing the same, and to pay the2333
interest, principal, and charges on bonds and other obligations2334
issued pursuant to Section 2i of Article VIII, Ohio Constitution,2335
and sections 5528.30 and 5528.31 of the Revised Code. The tax is2336
imposed in the same amount as the motor fuel tax imposed under2337
Chapter 5735. of the Revised Code plus an additional tax of three2338
cents per gallon, as determined by the gallons consumed while2339
operated on the public highways of this state. Payment of the2340
fuel use tax shall be made by the purchase of motor fuel within2341
Ohio of such gallons as is equivalent to the gallons consumed2342
while operating such a motor vehicle on the public highways of2343
this state, or by direct remittance to the treasurer of state with2344
the fuel use tax return filed pursuant to section 5728.08 of the2345
Revised Code.2346

       Any person subject to the tax imposed under this section who2347
purchases motor fuel in this state for use in another state in2348
excess of the amount consumed while operating such motor vehicle2349
on the public highways of this state shall be allowed a credit2350
against the tax imposed by this section or a refund equal to the2351
motor fuel tax paid to this state on such excess. No such credit2352
or refund shall be allowed for taxes paid to any state that2353
imposes a tax on motor fuel purchased or obtained in this state2354
and used on the highways of such other state but does not allow a2355
similar credit or refund for the tax paid to this state on motor2356
fuel purchased or acquired in the other state and used on the2357
public highways of this state.2358

       The tax commissioner is authorized to determine whether such2359
credits or refunds are available and to prescribe such rules as2360
are required for the purpose of administering this chapter.2361

       (B) Within sixty days after the last day of each month, the2362
tax commissioner shall determine the amount of motor fuel tax2363
allowed as a credit against the tax imposed by this section. The2364
commissioner shall certify the amount to the director of budget2365
and management and the treasurer of state, who shall credit the2366
amount in accordance with section 5728.08 of the Revised Code from2367
current revenue arising from the tax levied by section 5735.05 of2368
the Revised Code.2369

       (C) The owner of each commercial car and commercial tractor2370
subject to sections 5728.01 to 5728.14 of the Revised Code shall2371
beis liable for the payment of the full amount of the taxes2372
levied hereinimposed by this section.2373

       An owner who is a person regularly engaged, for compensation,2374
in the business of leasing or renting motor vehicles without2375
furnishing drivers may designate that the lessee of a motor2376
vehicle leased for a period of thirty days or more shall report2377
and pay the tax incurred during the duration of the lease. An2378
owner who is an independent contractor that furnishes both the2379
driver and motor vehicle, may designate that the person so2380
furnished with the driver and motor vehicle for a period of thirty2381
days or more shall report and pay the tax incurred during that2382
period. An independent contractor that is not an owner, but that2383
furnishes both the driver and motor vehicle and that has been2384
designated by the owner of the motor vehicle to report and pay the2385
tax, may designate that the person so furnished with driver and2386
motor vehicle for a period of thirty days or more shall report and2387
pay the tax incurred during that period.2388

       Sec. 5728.061.  The treasurer of state shall refund the2389
amount of highwayfuel use taxes overpaid, paid illegally or2390
erroneously, or paid on any illegal or erroneous assessment.2391
Applications for refund shall be filed with the tax commissioner,2392
on the form prescribed by himthe commissioner, within four years2393
from the date of the overpayment, the illegal or erroneous payment2394
of the tax, or the payment of the illegal or erroneous assessment.2395
An application shall be filed by the person who made payment of2396
the tax for which the refund is claimed. When a refund is granted2397
for payment of an illegal or erroneous assessment issued by the2398
commissioner, the refund shall include interest on the amount of2399
the refund from the date of the overpaymentpayment. The interest2400
shall be computed at the rate per annum prescribed by section2401
5703.47 of the Revised Code. On2402

       On the filing of the application, the commissioner shall2403
determine the amount of refund due andto which the applicant is2404
entitled. If the amount is not less than that claimed, the2405
commissioner shall certify thatthe amount to the director of2406
budget and management and treasurer of state for payment from the2407
tax refund fund created by section 5703.052 of the Revised Code.2408
Application for refund shall be filed by the person who made2409
payment of the tax for which refund is claimed.If the amount is2410
less than that claimed, the commissioner shall proceed in2411
accordance with section 5703.70 of the Revised Code.2412

       Sec. 5728.07.  Every person who is or becomes liable for the2413
payment of the tax levied in section 5728.06 of the Revised Code2414
shall keep a complete and accurate record, upon forms prescribed2415
by the tax commissioner, showing the total miles traveled on a2416
public highway in this state bymaintain detailed distance and2417
fuel records for each commercial car and commercial tractor owned,2418
leased, rented, or otherwise operated by such person, the number2419
of axles actually used while traveling said miles, the highway use2420
permit number for each commercial car and commercial tractor owned2421
or operated and such other information as the tax commissioner may2422
require. Such records shall be available at any time, during2423
normal business hours, for the inspection of the tax commissioner2424
or histhe commissioner's duly authorized agents and shall be2425
preserved for a period of four years from the date the return2426
required to be filed under section 5728.08 of the Revised Code was2427
due or filed, whichever is later.2428

       Sec. 5728.08.  Except as provided in section 5728.03 of the2429
Revised Code and except as otherwise provided in this section,2430
whoever is liable for the payment of the tax levied by section2431
5728.06 of the Revised Code, on or before the last day of each2432
January, April, July, and October, shall file with the treasurer2433
of state, on forms prescribed by the tax commissioner, a highway2434
fuel use tax return and make payment of the full amount of the tax2435
due for the operation of each commercial car and commercial2436
tractor for the next preceding three calendar months. If the2437
commercial cars or commercial tractors are farm trucks and the2438
amount of motor fuel used to operate the trucks during the next2439
preceding twelve calendar months was less than fifteen thousand2440
gallons, the highwayfuel use tax return shall be filed and the2441
full amount of tax due paid on or before the last day of each July2442
for the next preceding twelve calendar months. If the commercial2443
cars or commercial tractors are farm trucks and the amount of2444
motor fuel used to operate the trucks during the next preceding2445
twelve calendar months was fifteen thousand gallons or more, the2446
highwayfuel use tax return shall be filed and the full amount of2447
the tax due paid either on or before the last day of each July for2448
the next preceding twelve calendar months, or on or before the2449
last day of each January, April, July, and October for the next2450
preceding three calendar months, at the option of the person2451
liable for payment of the tax. If the commercial cars or2452
commercial tractors are not farm trucks, and if, in the estimation2453
of the tax commissioner, the amount of the tax due does not2454
warrant quarterly filing, the commissioner may authorize the2455
filing of the highwayfuel use tax return and payment of the full2456
amount due on or before the last day of each July for the next2457
preceding twelve months.2458

       Immediately upon the receipt of a highwayfuel use tax2459
return, the treasurer of state shall mark on the return the date2460
it was received by the treasurer of state and the amount of tax2461
payment accompanying the return and shall transmit the return to2462
the tax commissioner.2463

       The treasurer of state shall place to the credit of the tax2464
refund fund created by section 5703.052 of the Revised Code, out2465
of receipts from the taxes levied by section 5728.06 of the2466
Revised Code, amounts equal to the refund certified by the tax2467
commissioner pursuant to section 5728.061 of the Revised Code.2468
Receipts from the tax shall be used by the tax commissioner to2469
defray expenses incurred by the department of taxation in2470
administering sections 5728.01 to 5728.14 of the Revised Code.2471

       All moneys received in the state treasury from taxes levied2472
by section 5728.06 of the Revised Code and fees assessed under2473
sections 5728.02 andsection 5728.03 of the Revised Code which2474
that are not required to be placed to the credit of the tax refund2475
fund as provided by this section shall, during each calendar year,2476
be credited to the highway improvement bond retirement fund2477
created by section 5528.12 of the Revised Code until the2478
commissioners of the sinking fund certify to the treasurer of2479
state, as required by section 5528.17 of the Revised Code, that2480
there are sufficient moneys to the credit of the highway2481
improvement bond retirement fund to meet in full all payments of2482
interest, principal, and charges for the retirement of bonds and2483
other obligations issued pursuant to Section 2g of Article VIII,2484
Ohio Constitution, and sections 5528.10 and 5528.11 of the Revised2485
Code due and payable during the current calendar year and during2486
the next succeedingfollowing calendar year. From the date of the2487
receipt of the certification required by section 5528.17 of the2488
Revised Code by the treasurer of state until the thirty-first day2489
of December of the calendar year in which the certification is2490
made, all moneys received in the state treasury from taxes levied2491
under section 5728.06 of the Revised Code and fees assessed under2492
sections 5728.02 andsection 5728.03 of the Revised Code which2493
that are not required to be placed to the credit of the tax refund2494
fund as provided by this section shall be credited to the highway2495
obligations bond retirement fund created by section 5528.32 of the2496
Revised Code until the commissioners of the sinking fund certify2497
to the treasurer of state, as required by section 5528.38 of the2498
Revised Code, that there are sufficient moneys to the credit of2499
the highway obligations bond retirement fund to meet in full all2500
payments of interest, principal, and charges for the retirement of2501
bonds and other obligations issued pursuant to Section 2i of2502
Article VIII, Ohio Constitution, and sections 5528.30 and 5528.312503
of the Revised Code due and payable during the current calendar2504
year and during the next succeeding following calendar year. From2505
the date of the receipt of the certification required by section2506
5528.38 of the Revised Code by the treasurer of state until the2507
thirty-first day of December of the calendar year in which the2508
certification is made, all moneys received in the state treasury2509
from taxes levied under section 5728.06 of the Revised Code and2510
fees assessed under sections 5728.02 andsection 5728.03 of the2511
Revised Code whichthat are not required to be placed to the2512
credit of the tax refund fund as provided by this section shall be2513
credited to the highway operating fund created by section 5735.2912514
of the Revised Code, except as provided by the next succeeding2515
paragraph of this section.2516

       From the date of the receipt by the treasurer of state of2517
certifications from the commissioners of the sinking fund, as2518
required by sections 5528.18 and 5528.39 of the Revised Code,2519
certifying that the moneys to the credit of the highway2520
improvement bond retirement fund are sufficient to meet in full2521
all payments of interest, principal, and charges for the2522
retirement of all bonds and other obligations whichthat may be2523
issued pursuant to Section 2g of Article VIII, Ohio Constitution,2524
and sections 5528.10 and 5528.11 of the Revised Code, and to the2525
credit of the highway obligations bond retirement fund are2526
sufficient to meet in full all payments of interest, principal,2527
and charges for the retirement of all obligations issued pursuant2528
to Section 2i of Article VIII, Ohio Constitution, and sections2529
5528.30 and 5528.31 of the Revised Code, all moneys received in2530
the state treasury from the taxes levied under section 5728.06 and2531
fees assessed under sections 5728.02 andsection 5728.03 of the2532
Revised Code, whichthat are not required to be placed to the2533
credit of the tax refund fund as provided by this section, shall2534
be deposited to the credit of the highway operating fund.2535

       As used in this section, "farm truck" means any commercial2536
car or commercial tractor that is registered as a farm truck under2537
Chapter 4503. of the Revised Code.2538

       Sec. 5728.09.  (A) Any person who fails to file timely the2539
return required by section 5728.08 of the Revised Code may be2540
required to pay an additional charge equal to the greater of fifty2541
dollars or ten per cent of the tax due. The tax commissioner may2542
adopt rules providing for the imposition and remission of the2543
additional charges. Any additional charge imposed under this2544
section may be collected through an assessment as provided in2545
section 5728.10 of the Revised Code.2546

       (B) If the tax imposed by this chapter or section 5735.31 of2547
the Revised Code, or any portion of that tax, whether determined2548
by the tax commissioner or the taxpayer, is not paid on or before2549
the date prescribed in section 5728.08 of the Revised Code,2550
interest shall be collected and paid in the same manner as the2551
tax, upon that unpaid amount at the rate per annum prescribed by2552
section 5703.47 of the Revised Code from the date prescribed for2553
payment of the tax until it is paid or until the day an assessment2554
is issued under section 5728.10 of the Revised Code, whichever2555
occurs first. Any interest imposed under this chapter may be2556
collected through an assessment as provided in section 5728.10 of2557
the Revised Code.2558

       Sec. 5728.10.  (A) If any person required to file a highway2559
fuel use tax return by sections 5728.01 to 5728.14 of the Revised2560
Code, fails to file the return within the time prescribed by those2561
sections, files an incomplete return, files an incorrect return,2562
or fails to remit the full amount of the tax due for the period2563
covered by the return, the tax commissioner may make an assessment2564
against the person, based upon any information in the2565
commissioner's possession, for the period for which the tax was2566
due.2567

       No assessment shall be made against any person for any tax2568
imposed by this chapter more than four years after the last day of2569
the calendar year duringreturn date for the period for which the2570
tax was due or more than four years after the return for the2571
period was filed, whichever is later. This section does not bar2572
an assessment against any person who fails to file a highwayfuel2573
use tax return as required by this chapter, or who files a2574
fraudulent highwayfuel use tax return.2575

       A penalty of up to fifteen per cent may be added to the2576
amount of every assessment made pursuant to this section. The2577
commissioner may adopt rules providing for the imposition and2578
remission of penalties added to assessments made under this2579
section.2580

       The commissioner shall give the party assessed written notice2581
of the assessment asin the manner provided in section 5703.37 of2582
the Revised Code. With the notice, the commissioner shall provide2583
instructions on how to petition for reassessment and request a2584
hearing on the petition.2585

       (B) Unless the party to whom the notice of assessment is2586
directedassessed files with the tax commissioner within sixty2587
days after service of the notice of assessment, either personally2588
or by certified mail, a written petition for reassessment in2589
writing, signed by the party assessed, or by the party's2590
authorized agent having knowledge of the facts, the assessment2591
shall becomebecomes final and the amount of the assessment shall2592
beis due and payable from the party assessed to the treasurer of2593
state. The petition shall indicate the objections of the party2594
assessed, but additional objections may be raised in writing if2595
received by the commissioner prior to the date shown on the final2596
determination by the commissioner.2597

       Unless the petitioner waives a hearing, the commissioner2598
shall assign a time and place for the hearing on the petition and2599
notify the petitioner of the time and place of the hearing by2600
personal service or certified mail, but the commissioner may2601
continue the hearing from time to time if necessary.2602

       The commissioner may make such correction to the assessment2603
as the commissioner finds proper. The commissioner shall serve a2604
copy of the commissioner's final determination on the petitioner2605
by personal service or certified mail, and the commissioner's2606
decision in the matter shall be final, subject to appeal as2607
provided in section 5717.02 of the Revised Code. Only objections2608
decided on the merits by the board of tax appeals or a court shall2609
be given collateral estoppel or res judicata effect in considering2610
an application for refund of amounts paid pursuant to the2611
assessment. If the petition has been properly filed, the2612
commissioner shall proceed under section 5703.60 of the Revised2613
Code.2614

       (C) After an assessment becomes final, if any portion of the2615
assessment remains unpaid, including accrued interest, a certified2616
copy of the tax commissioner's entry making the assessment final2617
may be filed in the office of the clerk of the court of common2618
pleas in the county in which the party's place of business is2619
located or the county in which the party assessed resides. If the2620
party maintains no office in this state and is not a resident of2621
this state, the certified copy of the entry may be filed in the2622
office of the clerk of the court of common pleas of Franklin2623
county.2624

       The clerk, immediatelyImmediately upon the filing of the2625
entry, the clerk shall enter a judgment for the state of Ohio2626
against the party assessed in the amount shown on the entry. The2627
judgment may be filed by the clerk in a loose-leaf book entitled2628
"special judgments for state highwayfuel use tax," and shall have2629
the same effect as other judgments. Execution shall issue upon2630
the judgment upon the request of the tax commissioner, and all2631
laws applicable to sales on execution shall apply to sales made2632
under the judgment.2633

       The portion of the assessment not paid within sixty days2634
after the day the assessment was issued shall bear interest at the2635
rate per annum prescribed by section 5703.47 of the Revised Code2636
from the day the tax commissioner issues the assessment until it2637
is paid. Interest shall be paid in the same manner as the tax and2638
may be collected by the issuance of an assessment under this2639
section.2640

       (D) All money collected by the tax commissioner under this2641
section shall be paid into the state treasury in the same manner2642
as the revenues deriving from the taxes imposed by section 5728.062643
of the Revised Code.2644

       Sec. 5728.11.  (A) ThirtySixty days after service of an2645
assessment under section 5728.10 of the Revised Code, or when the2646
tax commissioner files a certified copy of an entry making an2647
assessment as provided in that section, hethe commissioner shall2648
suspend all highwayfuel use permits issued to the person against2649
whom the assessment was made, provided that no highwayfuel use2650
permit shall be suspended while an appeal is pending, except in2651
those cases in which no return has been filed, or where it is2652
alleged a fraudulent return has been filed.2653

       Upon suspension of a highwayfuel use permit, the2654
commissioner may require that the permit holder shall surrender to2655
the commissioner the permit and identification device.2656

       Upon payment in full of the assessment and interest, the tax2657
commissioner shall immediately reinstate all highwayfuel use2658
permits issued to the person against whom the assessment was made2659
which have been suspended.2660

       (B) If no returns have been filed within the time prescribed2661
for the filing of returns, or within any extension of time for2662
filing as the tax commissioner may grant in accordance with2663
section 5728.14 of the Revised Code, the commissioner, after2664
giving written notice of histhe commissioner's intention so to2665
do, immediately may suspend all highwayfuel use permits held by2666
the person failing to file a return. The notice shall be sent to2667
the last known address of the person. No permit which has been2668
suspended for failure to file a return shall be reinstated until2669
the person files complete and correct returns for all periods in2670
which no return has been filed and paid the full amount of the2671
tax, interest, and additional charges due.2672

       Sec. 5728.13. The provisions of sectionsSections 5728.02 to2673
5728.12, inclusive, of the Revised Code, do not apply to motor2674
vehicles, commercial cars, or commercial tractors owned and2675
operated by the United States, by this state, or any political2676
subdivisions thereof, nor to motor vehicles, commercial cars, or2677
commercial tractors owned by nonresidents of this state while2678
engaged solely in the interstate transportation of household goods2679
in Ohio, provided such owner has complied with the laws of the2680
state, district, or territory of his residence pertaining to the2681
registration and taxation of motor vehicles and complies with such2682
laws while operating and driving such motor vehicle upon the2683
public roads or highways of this state; provided that the owners2684
of motor vehicles similarly engaged and registered in this state2685
shall be exempt from all obligations pertaining to the2686
registration and taxation of motor vehicles in such other states,2687
districts, or territories. The provisions of this section do not2688
apply to vehicles, commercial cars, or commercial tractors owned2689
by nonresidents of this state when operated by a resident under2690
lease or any other arrangement. The tax commissioner shall be2691
authorized to determine whether or not such other states,2692
districts, or territories exempt such Ohio registered vehicles2693
from all obligations pertaining to the registration and taxation2694
of such motor vehicles and to prescribe such rules and regulations2695
as are required for the purpose of administering the provisions of2696
this section.2697

       Household goods means all goods consisting of personal2698
effects and property used or to be used in a dwelling when a part2699
of the equipment or supply of such dwellings and furniture,2700
fixtures, equipment, and the property of stores, offices, museums,2701
institutions, hospitals, or other establishments when part of the2702
stock, equipment, or supply of such stores, offices, museums,2703
institutions, hospitals, or other establishments, and articles2704
including objects of art, displays, and exhibits, which because of2705
their unusual nature or value require specialized handling and2706
equipment usually employed in moving household goodsor by any2707
other state or its political subdivisions if that state extends a2708
similar exemption to motor vehicles, commercial cars, or2709
commercial tractors owned and operated by this state or its2710
political subdivisions.2711

       Sec. 5733.021.  (A) Each taxpayer whichthat does not in the2712
month of January file the report and make the payment required by2713
section 5733.02 of the Revised Code shall make and file a2714
declaration of estimated tax report for the tax year.2715

       The declaration of estimated tax report shall be filed with2716
the treasurer of state on or before the last day of January in2717
such form as prescribed by the tax commissioner, and shall reflect2718
an estimate of the total amount due under this chapter for the tax2719
year.2720

       (B) A taxpayer required to file a declaration of estimated2721
tax report shall make remittance of such estimated tax to the2722
treasurer of state as follows:2723

       (1) The entire estimated tax at the time of filing the2724
declaration of estimated tax report, if such estimated tax is not2725
in excess of the minimum tax as provided in section 5733.06 of the2726
Revised Code;2727

       (2) If the estimated tax is in excess of the minimum tax:2728

       (a) One-third of the estimated tax at the time of filing the2729
declaration of estimated tax report;2730

       (b) Two-thirds of the estimated tax on or before the last2731
day of March of the tax year, unlessif the report and payment2732
required by section 5733.02 of the Revised Code is filed and paid2733
on or before the last day of March of the tax year;.2734

       (3) If the estimated tax due is in excess of the minimum2735
tax, and an extension of time for filing the report required by2736
section 5733.02 of the Revised Code has been granted pursuant to2737
section 5733.13 of the Revised Code;:2738

       (a) One-third of the estimated tax at the time of filing the2739
declaration of estimated tax report;2740

       (b) One-third of the estimated tax on or before the last day2741
of March of the tax year;2742

       (c) One-third of the estimated tax on or before the last day2743
of May of the tax year, unless the report and payments required by2744
section 5733.02 of the Revised Code are filed and paid on or2745
before the last day of May of the tax year.2746

       Remittance of the estimated tax shall be made in the form2747
prescribed by the treasurer of state, including electronic funds2748
transfer if required by section 5733.022 of the Revised Code.2749

       The treasurer of state shall credit all payments of such2750
estimated tax as provided in section 5733.12 of the Revised Code,2751
shall show on all reports the date each was filed and the amount2752
of payment remitted, and shall immediately transmit all reports2753
filed under this section to the tax commissioner.2754

       (C)(1) For any period of delinquency ending prior to the2755
first day of June of the tax year:2756

       (a) The penalty under division (A)(2) of section 5733.28 of2757
the Revised Code may only be imposed on the delinquent portion of2758
the estimated tax required to be paid under divisions (B)(2)(a)2759
and (b) and (B)(3)(a) and (b) of this section.2760

       (b) The interest under section 5733.26 of the Revised Code2761
shall only be imposed on the delinquent portion of estimated tax2762
required to be paid under divisions (B)(2)(a), (B)(2)(b),2763
(B)(3)(a), and (B)(3)(b) of this section.2764

       (c) If the taxpayer was not subject to tax for the2765
immediately preceding tax year, "estimated tax" for purposes of2766
division (C)(1) of this section is ninety per cent of the2767
qualifying tax for the current tax year. If the taxpayer was2768
subject to the tax for the immediately preceding tax year,2769
"estimated tax" for purposes of division (C)(1) of this section is2770
the lesser of one hundred per cent of the qualifying net tax for2771
the immediately preceding tax year or ninety per cent of the2772
qualifying net tax for the current tax year.2773

       (2) For any period of delinquency commencing the first day2774
of June of the tax year and concluding on the extended due date2775
pursuant to section 5733.13 of the Revised Code:2776

       (a) The penalty under division (A)(2) of section 5733.28 of2777
the Revised Code may only be imposed on the delinquent portion of2778
the estimated tax required to be paid under division (B)(3)(c) of2779
this section.2780

       (b) The interest under section 5733.26 of the Revised Code2781
shall be imposed on the delinquent portion of the amount in2782
division (C)(3)(a) of this section for the current tax year.2783

       (c) For purposes of division (C)(2) of this section,2784
"estimated tax" is ninety per cent of the qualifying net tax for2785
the current tax year.2786

       (3) If the taxpayer did not file a report under section2787
5733.02 of the Revised Code for the tax year or failed to prepare2788
and file the report in good faith for the tax year, "qualifying2789
net tax" as used in division (C) of this section for that tax year2790
means the amount described in division (C)(3)(a) of this division.2791
Otherwise, "qualifying net tax" as used in division (C) of this2792
section for that tax year means the lesser of the amount described2793
in division (C)(3)(a) or (b) of this section:2794

       (a) The tax imposed by sections 5733.06, 5733.065, and2795
5733.066 of the Revised Code for that tax year reduced by the2796
credits listed in section 5733.98 of the Revised Code. If the2797
credits exceed the total tax, the qualifying net tax is zero.2798

       (b) The lesser of the tax shown on the report, reduced by2799
the credits shown on that report, or the tax shown on an amended2800
report prepared and filed in good faith, reduced by the credits2801
shown on that amended report. If the credits shown exceed the2802
total tax shown, the qualifying net tax is zero.2803

       Sec. 5733.04.  As used in this chapter:2804

       (A) "Issued and outstanding shares of stock" applies to2805
nonprofit corporations, as provided in section 5733.01 of the2806
Revised Code, and includes, but is not limited to, membership2807
certificates and other instruments evidencing ownership of an2808
interest in such nonprofit corporations, and with respect to a2809
financial institution that does not have capital stock, "issued2810
and outstanding shares of stock" includes, but is not limited to,2811
ownership interests of depositors in the capital employed in such2812
an institution.2813

       (B) "Taxpayer" means a corporation subject to the tax imposed2814
by section 5733.06 of the Revised Code.2815

       (C) "Resident" means a corporation organized under the laws2816
of this state.2817

       (D) "Commercial domicile" means the principal place from2818
which the trade or business of the taxpayer is directed or2819
managed.2820

       (E) "Taxable year" means the period prescribed by division2821
(A) of section 5733.031 of the Revised Code upon the net income of2822
which the value of the taxpayer's issued and outstanding shares of2823
stock is determined under division (B) of section 5733.05 of the2824
Revised Code or the period prescribed by division (A) of section2825
5733.031 of the Revised Code that immediately precedes the date as2826
of which the total value of the corporation is determined under2827
division (A) or (C) of section 5733.05 of the Revised Code.2828

       (F) "Tax year" means the calendar year in and for which the2829
tax imposed by section 5733.06 of the Revised Code is required to2830
be paid.2831

       (G) "Internal Revenue Code" means the "Internal Revenue Code2832
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.2833

       (H) "Federal income tax" means the income tax imposed by the2834
Internal Revenue Code.2835

       (I) Except as provided in section 5733.058 of the Revised2836
Code, "net income" means the taxpayer's taxable income before2837
operating loss deduction and special deductions, as required to be2838
reported for the taxpayer's taxable year under the Internal2839
Revenue Code, subject to the following adjustments:2840

       (1)(a) Deduct any net operating loss incurred in any taxable2841
years ending in 1971 or thereafter but exclusive of any net2842
operating loss incurred in taxable years ending prior to January2843
1, 1971. This deduction shall not be allowed in any tax year2844
commencing before December 31, 1973, but shall be carried over and2845
allowed in tax years commencing after December 31, 1973, until2846
fully utilized in the next succeeding taxable year or years in2847
which the taxpayer has net income, but in no case for more than2848
the designated carryover period as described in division (I)(1)(b)2849
of this section. The amount of such net operating loss, as2850
determined under the allocation and apportionment provisions of2851
section 5733.051 and division (B) of section 5733.05 of the2852
Revised Code for the year in which the net operating loss occurs,2853
shall be deducted from net income, as determined under the2854
allocation and apportionment provisions of section 5733.051 and2855
division (B) of section 5733.05 of the Revised Code, to the extent2856
necessary to reduce net income to zero with the remaining unused2857
portion of the deduction, if any, carried forward to the remaining2858
years of the designated carryover period as described in division2859
(I)(1)(b) of this section, or until fully utilized, whichever2860
occurs first.2861

       (b) For losses incurred in taxable years ending on or before2862
December 31, 1981, the designated carryover period shall be the2863
five consecutive taxable years after the taxable year in which the2864
net operating loss occurred. For losses incurred in taxable years2865
ending on or after January 1, 1982, and beginning before August 6,2866
1997, the designated carryover period shall be the fifteen2867
consecutive taxable years after the taxable year in which the net2868
operating loss occurs. For losses incurred in taxable years2869
beginning on or after August 6, 1997, the designated carryover2870
period shall be the twenty consecutive taxable years after the2871
taxable year in which the net operating loss occurs.2872

       (c) The tax commissioner may require a taxpayer to furnish2873
any information necessary to support a claim for deduction under2874
division (I)(1)(a) of this section and no deduction shall be2875
allowed unless the information is furnished.2876

       (2) Deduct any amount included in net income by application2877
of section 78 or 951 of the Internal Revenue Code, amounts2878
received for royalties, technical or other services derived from2879
sources outside the United States, and dividends received from a2880
subsidiary, associate, or affiliated corporation that neither2881
transacts any substantial portion of its business nor regularly2882
maintains any substantial portion of its assets within the United2883
States. For purposes of determining net foreign source income2884
deductible under division (I)(2) of this section, the amount of2885
gross income from all such sources other than income derived by2886
application of section 78 or 951 of the Internal Revenue Code2887
shall be reduced by:2888

       (a) The amount of any reimbursed expenses for personal2889
services performed by employees of the taxpayer for the2890
subsidiary, associate, or affiliated corporation;2891

       (b) Ten per cent of the amount of royalty income and2892
technical assistance fees;2893

       (c) Fifteen per cent of the amount of dividends and all2894
other income.2895

       The amounts described in divisions (I)(2)(a) to (c) of this2896
section are deemed to be the expenses attributable to the2897
production of deductible foreign source income unless the taxpayer2898
shows, by clear and convincing evidence, less actual expenses, or2899
the tax commissioner shows, by clear and convincing evidence, more2900
actual expenses.2901

       (3) Add any loss or deduct any gain resulting from the sale,2902
exchange, or other disposition of a capital asset, or an asset2903
described in section 1231 of the Internal Revenue Code, to the2904
extent that such loss or gain occurred prior to the first taxable2905
year on which the tax provided for in section 5733.06 of the2906
Revised Code is computed on the corporation's net income. For2907
purposes of division (I)(3) of this section, the amount of the2908
prior loss or gain shall be measured by the difference between the2909
original cost or other basis of the asset and the fair market2910
value as of the beginning of the first taxable year on which the2911
tax provided for in section 5733.06 of the Revised Code is2912
computed on the corporation's net income. At the option of the2913
taxpayer, the amount of the prior loss or gain may be a percentage2914
of the gain or loss, which percentage shall be determined by2915
multiplying the gain or loss by a fraction, the numerator of which2916
is the number of months from the acquisition of the asset to the2917
beginning of the first taxable year on which the fee provided in2918
section 5733.06 of the Revised Code is computed on the2919
corporation's net income, and the denominator of which is the2920
number of months from the acquisition of the asset to the sale,2921
exchange, or other disposition of the asset. The adjustments2922
described in this division do not apply to any gain or loss where2923
the gain or loss is recognized by a qualifying taxpayer, as2924
defined in section 5733.0510 of the Revised Code, with respect to2925
a qualifying taxable event, as defined in that section.2926

       (4) Deduct the dividend received deduction provided by2927
section 243 of the Internal Revenue Code.2928

       (5) Deduct any interest or interest equivalent on public2929
obligations and purchase obligations to the extent included in2930
federal taxable income. As used in divisions (I)(5) and (6) of2931
this section, "public obligations," "purchase obligations," and2932
"interest or interest equivalent" have the same meanings as in2933
section 5709.76 of the Revised Code.2934

       (6) Add any loss or deduct any gain resulting from the sale,2935
exchange, or other disposition of public obligations to the extent2936
included in federal taxable income.2937

       (7) To the extent not otherwise allowed, deduct any2938
dividends or distributions received by a taxpayer from a public2939
utility, excluding an electric company, if the taxpayer owns at2940
least eighty per cent of the issued and outstanding common stock2941
of the public utility. As used in division (I)(7) of this2942
section, "public utility" means a public utility as defined in2943
Chapter 5727. of the Revised Code, whether or not the public2944
utility is doing business in the state.2945

       (8) To the extent not otherwise allowed, deduct any2946
dividends received by a taxpayer from an insurance company, if the2947
taxpayer owns at least eighty per cent of the issued and2948
outstanding common stock of the insurance company. As used in2949
division (I)(8) of this section, "insurance company" means an2950
insurance company that is taxable under Chapter 5725. or 5729. of2951
the Revised Code.2952

       (9) Deduct expenditures for modifying existing buildings or2953
structures to meet American national standards institute standard2954
A-117.1-1961 (R-1971), as amended; provided, that no deduction2955
shall be allowed to the extent that such deduction is not2956
permitted under federal law or under rules of the tax2957
commissioner. Those deductions as are allowed may be taken over a2958
period of five years. The tax commissioner shall adopt rules2959
under Chapter 119. of the Revised Code establishing reasonable2960
limitations on the extent that expenditures for modifying existing2961
buildings or structures are attributable to the purpose of making2962
the buildings or structures accessible to and usable by physically2963
handicapped persons.2964

       (10) Deduct the amount of wages and salaries, if any, not2965
otherwise allowable as a deduction but that would have been2966
allowable as a deduction in computing federal taxable income2967
before operating loss deduction and special deductions for the2968
taxable year, had the targeted jobs credit allowed and determined2969
under sections 38, 51, and 52 of the Internal Revenue Code not2970
been in effect.2971

       (11) Deduct net interest income on obligations of the United2972
States and its territories and possessions or of any authority,2973
commission, or instrumentality of the United States to the extent2974
the laws of the United States prohibit inclusion of the net2975
interest for purposes of determining the value of the taxpayer's2976
issued and outstanding shares of stock under division (B) of2977
section 5733.05 of the Revised Code. As used in division (I)(11)2978
of this section, "net interest" means interest net of any expenses2979
taken on the federal income tax return that would not have been2980
allowed under section 265 of the Internal Revenue Code if the2981
interest were exempt from federal income tax.2982

       (12)(a) Except as set forth in division (I)(12)(d) of this2983
section, to the extent not included in computing the taxpayer's2984
federal taxable income before operating loss deduction and special2985
deductions, add gains and deduct losses from direct or indirect2986
sales, exchanges, or other dispositions, made by a related entity2987
who is not a taxpayer, of the taxpayer's indirect, beneficial, or2988
constructive investment in the stock or debt of another entity,2989
unless the gain or loss has been included in computing the federal2990
taxable income before operating loss deduction and special2991
deductions of another taxpayer with a more closely related2992
investment in the stock or debt of the other entity. The amount2993
of gain added or loss deducted shall not exceed the product2994
obtained by multiplying such gain or loss by the taxpayer's2995
proportionate share, directly, indirectly, beneficially, or2996
constructively, of the outstanding stock of the related entity2997
immediately prior to the direct or indirect sale, exchange, or2998
other disposition.2999

       (b) Except as set forth in division (I)(12)(e) of this3000
section, to the extent not included in computing the taxpayer's3001
federal taxable income before operating loss deduction and special3002
deductions, add gains and deduct losses from direct or indirect3003
sales, exchanges, or other dispositions made by a related entity3004
who is not a taxpayer, of intangible property other than stock,3005
securities, and debt, if such property was owned, or used in whole3006
or in part, at any time prior to or at the time of the sale,3007
exchange, or disposition by either the taxpayer or by a related3008
entity that was a taxpayer at any time during the related entity's3009
ownership or use of such property, unless the gain or loss has3010
been included in computing the federal taxable income before3011
operating loss deduction and special deductions of another3012
taxpayer with a more closely related ownership or use of such3013
intangible property. The amount of gain added or loss deducted3014
shall not exceed the product obtained by multiplying such gain or3015
loss by the taxpayer's proportionate share, directly, indirectly,3016
beneficially, or constructively, of the outstanding stock of the3017
related entity immediately prior to the direct or indirect sale,3018
exchange, or other disposition.3019

       (c) As used in division (I)(12) of this section, "related3020
entity" means those entities described in divisions (I)(12)(c)(i)3021
to (iii) of this section:3022

       (i) An individual stockholder, or a member of the3023
stockholder's family enumerated in section 318 of the Internal3024
Revenue Code, if the stockholder and the members of the3025
stockholder's family own, directly, indirectly, beneficially, or3026
constructively, in the aggregate, at least fifty per cent of the3027
value of the taxpayer's outstanding stock;3028

       (ii) A stockholder, or a stockholder's partnership, estate,3029
trust, or corporation, if the stockholder and the stockholder's3030
partnerships, estates, trusts, and corporations own directly,3031
indirectly, beneficially, or constructively, in the aggregate, at3032
least fifty per cent of the value of the taxpayer's outstanding3033
stock;3034

       (iii) A corporation, or a party related to the corporation3035
in a manner that would require an attribution of stock from the3036
corporation to the party or from the party to the corporation3037
under division (I)(12)(c)(iv) of this section, if the taxpayer3038
owns, directly, indirectly, beneficially, or constructively, at3039
least fifty per cent of the value of the corporation's outstanding3040
stock.3041

       (iv) The attribution rules of section 318 of the Internal3042
Revenue Code apply for purposes of determining whether the3043
ownership requirements in divisions (I)(12)(c)(i) to (iii) of this3044
section have been met.3045

       (d) For purposes of the adjustments required by division3046
(I)(12)(a) of this section, the term "investment in the stock or3047
debt of another entity" means only those investments where the3048
taxpayer and the taxpayer's related entities directly, indirectly,3049
beneficially, or constructively own, in the aggregate, at any time3050
during the twenty-four month period commencing one year prior to3051
the direct or indirect sale, exchange, or other disposition of3052
such investment at least fifty per cent or more of the value of3053
either the outstanding stock or such debt of such other entity.3054

       (e) For purposes of the adjustments required by division3055
(I)(12)(b) of this section, the term "related entity" excludes all3056
of the following:3057

       (i) Foreign corporations as defined in section 7701 of the3058
Internal Revenue Code;3059

       (ii) Foreign partnerships as defined in section 7701 of the3060
Internal Revenue Code;3061

       (iii) Corporations, partnerships, estates, and trusts3062
created or organized in or under the laws of the Commonwealth of3063
Puerto Rico or any possession of the United States;3064

       (iv) Foreign estates and foreign trusts as defined in3065
section 7701 of the Internal Revenue Code.3066

       The exclusions described in divisions (I)(12)(e)(i) to (iv)3067
of this section do not apply if the corporation, partnership,3068
estate, or trust is described in any one of divisions (C)(1) to3069
(5) of section 5733.042 of the Revised Code.3070

       (f) Nothing in division (I)(12) of this section shall3071
require or permit a taxpayer to add any gains or deduct any losses3072
described in divisions (I)(12)(f)(i) and (ii) of this section:3073

       (i) Gains or losses recognized for federal income tax3074
purposes by an individual, estate, or trust without regard to the3075
attribution rules described in division (I)(12)(c) of this3076
section;3077

       (ii) A related entity's gains or losses described in3078
division (I)(12)(b) if the taxpayer's ownership of or use of such3079
intangible property was limited to a period not exceeding nine3080
months and was attributable to a transaction or a series of3081
transactions executed in accordance with the election or elections3082
made by the taxpayer or a related entity pursuant to section 3383083
of the Internal Revenue Code.3084

       (13) Any adjustment required by section 5733.042 of the3085
Revised Code.3086

       (14) Add any amount claimed as a credit under section3087
5733.0611 of the Revised Code to the extent that such amount3088
satisfies either of the following:3089

       (a) It was deducted or excluded from the computation of the3090
corporation's taxable income before operating loss deduction and3091
special deductions as required to be reported for the3092
corporation's taxable year under the Internal Revenue Code;3093

       (b) It resulted in a reduction of the corporation's taxable3094
income before operating loss deduction and special deductions as3095
required to be reported for any of the corporation's taxable years3096
under the Internal Revenue Code.3097

       (15) Deduct the amount contributed by the taxpayer to an3098
individual development account program established by a county3099
department of job and family services pursuant to sections 329.113100
to 329.14 of the Revised Code for the purpose of matching funds3101
deposited by program participants. On request of the tax3102
commissioner, the taxpayer shall provide any information that, in3103
the tax commissioner's opinion, is necessary to establish the3104
amount deducted under division (I)(15) of this section.3105

       (16) Any adjustment required by section 5733.0510 of the3106
Revised Code.3107

       (J) Any term used in this chapter has the same meaning as3108
when used in comparable context in the laws of the United States3109
relating to federal income taxes unless a different meaning is3110
clearly required. Any reference in this chapter to the Internal3111
Revenue Code includes other laws of the United States relating to3112
federal income taxes.3113

       (K) "Financial institution" has the meaning given by section3114
5725.01 of the Revised Code but does not include a production3115
credit association as described in 85 Stat. 597, 12 U.S.C.A. 2091.3116

       (L)(1) A "qualifying holding company" is any corporation3117
satisfying all of the following requirements:3118

       (a) Subject to divisions (L)(2) and (3) of this section, the3119
net book value of the corporation's intangible assets is greater3120
than or equal to ninety per cent of the net book value of all of3121
its assets and at least fifty per cent of the net book value of3122
all of its assets represents direct or indirect investments in the3123
equity of, loans and advances to, and accounts receivable due from3124
related members;3125

       (b) At least ninety per cent of the corporation's gross3126
income for the taxable year is attributable to the following:3127

       (i) The maintenance, management, ownership, acquisition,3128
use, and disposition of its intangible property, its aircraft the3129
use of which is not subject to regulation under 14 C.F.R. part 1213130
or part 135, and any real property described in division (L)(2)(c)3131
of this section;3132

       (ii) The collection and distribution of income from such3133
property.3134

       (c) The corporation is not a financial institution on the3135
last day of the taxable year ending prior to the first day of the3136
tax year;3137

       (d) The corporation's related members make a good faith and3138
reasonable effort to make timely and fully the adjustments3139
required by division (C)(2) of section 5733.05 of the Revised Code3140
and to pay timely and fully all uncontested taxes, interest,3141
penalties, and other fees and charges imposed under this chapter;3142

       (e) Subject to division (L)(4) of this section, the3143
corporation elects to be treated as a qualifying holding company3144
for the tax year.3145

       A corporation otherwise satisfying divisions (L)(1)(a) to (e)3146
of this section that does not elect to be a qualifying holding3147
company is not a qualifying holding company for the purposes of3148
this chapter.3149

       (2)(a)(i) For purposes of making the ninety per cent3150
computation under division (L)(1)(a) of this section, the net book3151
value of the corporation's assets shall not include the net book3152
value of aircraft or real property described in division3153
(L)(1)(b)(i) of this section.3154

       (ii) For purposes of making the fifty per cent computation3155
under division (L)(1)(a) of this section, the net book value of3156
assets shall include the net book value of aircraft or real3157
property described in division (L)(1)(b)(i) of this section.3158

       (b)(i) As used in division (L) of this section, "intangible3159
asset" includes, but is not limited to, the corporation's direct3160
interest in each pass-through entity only if at all times during3161
the corporation's taxable year ending prior to the first day of3162
the tax year the corporation's and the corporation's related3163
members' combined direct and indirect interests in the capital or3164
profits of such pass-through entity do not exceed fifty per cent.3165
If the corporation's interest in the pass-through entity is an3166
intangible asset for that taxable year, then the distributive3167
share of any income from the pass-through entity shall be income3168
from an intangible asset for that taxable year.3169

       (ii) If a corporation's and the corporation's related3170
members' combined direct and indirect interests in the capital or3171
profits of a pass-through entity exceed fifty per cent at any time3172
during the corporation's taxable year ending prior to the first3173
day of the tax year, "intangible asset" does not include the3174
corporation's direct interest in the pass-through entity, and the3175
corporation shall include in its assets its proportionate share of3176
the assets of any such pass-through entity and shall include in3177
its gross income its distributive share of the gross income of3178
such pass-through entity in the same form as was earned by the3179
pass-through entity.3180

       (iii) A pass-through entity's direct or indirect3181
proportionate share of any other pass-through entity's assets3182
shall be included for the purpose of computing the corporation's3183
proportionate share of the pass-through entity's assets under3184
division (L)(2)(b)(ii) of this section, and such pass-through3185
entity's distributive share of any other pass-through entity's3186
gross income shall be included for purposes of computing the3187
corporation's distributive share of the pass-through entity's3188
gross income under division (L)(2)(b)(ii) of this section.3189

       (c) For the purposes of divisions (L)(1)(b)(i), (1)(b)(ii),3190
(2)(a)(i), and (2)(a)(ii) of this section, real property is3191
described in division (L)(2)(c) of this section only if all of the3192
following conditions are present at all times during the taxable3193
year ending prior to the first day of the tax year:3194

       (i) The real property serves as the headquarters of the3195
corporation's trade or business, or is the place from which the3196
corporation's trade or business is principally managed or3197
directed;3198

       (ii) Not more than ten per cent of the value of the real3199
property and not more than ten per cent of the square footage of3200
the building or buildings that are part of the real property is3201
used, made available, or occupied for the purpose of providing,3202
acquiring, transferring, selling, or disposing of tangible3203
property or services in the normal course of business to persons3204
other than related members, the corporation's employees and their3205
families, and such related members' employees and their families.3206

       (d) As used in division (L) of this section, "related3207
member" has the same meaning as in division (A)(6) of section3208
5733.042 of the Revised Code without regard to division (B) of3209
that section.3210

       (3) The percentages described in division (L)(1)(a) of this3211
section shall be equal to the quarterly average of those3212
percentages as calculated during the corporation's taxable year3213
ending prior to the first day of the tax year.3214

       (4) With respect to the election described in division3215
(L)(1)(e) of this section:3216

       (a) The election need not accompany a timely filed report;3217

       (b) The election need not accompany the report; rather, the3218
election may accompany a subsequently filed but timely application3219
for refund and timely amended report, or a subsequently filed but3220
timely petition for reassessment;3221

       (c) The election is not irrevocable;3222

       (d) The election applies only to the tax year specified by3223
the corporation;3224

       (e) The corporation's related members comply with division3225
(L)(1)(d) of this section.3226

       Nothing in division (L)(4) of this section shall be construed3227
to extend any statute of limitations set forth in this chapter.3228

       (M) "Qualifying controlled group" means two or more3229
corporations that satisfy the ownership and control requirements3230
of division (A) of section 5733.052 of the Revised Code.3231

       (N) "Limited liability company" means any limited liability3232
company formed under Chapter 1705. of the Revised Code or under3233
the laws of any other state.3234

       (O) "Pass-through entity" means a corporation that has made3235
an election under subchapter S of Chapter 1 of Subtitle A of the3236
Internal Revenue Code for its taxable year under that code, or a3237
partnership, limited liability company, or any other person, other3238
than an individual, trust, or estate, if the partnership, limited3239
liability company, or other person is not classified for federal3240
income tax purposes as an association taxed as a corporation.3241

       (P) "Electric company" and "combined company" have the same3242
meanings as in section 5727.01 of the Revised Code.3243

       Sec. 5733.05.  As used in this section, "qualified research"3244
means laboratory research, experimental research, and other3245
similar types of research; research in developing or improving a3246
product; or research in developing or improving the means of3247
producing a product. It does not include market research,3248
consumer surveys, efficiency surveys, management studies, ordinary3249
testing or inspection of materials or products for quality3250
control, historical research, or literary research. "Product" as3251
used in this paragraph does not include services or intangible3252
property.3253

       The annual report determines the value of the issued and3254
outstanding shares of stock of the taxpayer, which under division3255
(A) or divisions (B) and (C) of this section is the base or3256
measure of the franchise tax liability. Such determination shall3257
be made as of the date shown by the report to have been the3258
beginning of the corporation's annual accounting period that3259
includes the first day of January of the tax year. For the3260
purposes of this chapter, the value of the issued and outstanding3261
shares of stock of any corporation that is a financial institution3262
shall be deemed to be the value as calculated in accordance with3263
division (A) of this section. For the purposes of this chapter,3264
the value of the issued and outstanding shares of stock of any3265
corporation that is not a financial institution shall be deemed to3266
be the values as calculated in accordance with divisions (B) and3267
(C) of this section. Except as otherwise required by this section3268
or section 5733.056 of the Revised Code, the value of a taxpayer's3269
issued and outstanding shares of stock under division (A) or (C)3270
of this section does not include any amount that is treated as a3271
liability under generally accepted accounting principles.3272

       (A) The total value, as shown by the books of the financial3273
institution, of its capital, surplus, whether earned or unearned,3274
undivided profits, and reserves shall be determined as prescribed3275
by section 5733.056 of the Revised Code for tax years 1998 and3276
thereafter.3277

       (B) The sum of the corporation's net income during the3278
corporation's taxable year, allocated or apportioned to this state3279
as prescribed in divisions (B)(1) and (2) of this section, and3280
subject to sections 5733.052, 5733.053, 5733.057, 5733.058,3281
5733.059, and 5733.0510 of the Revised Code:3282

       (1) The net income allocated to this state as provided by3283
section 5733.051 of the Revised Code.3284

       (2) The amount of Ohio apportioned net income from sources3285
other than those allocated under section 5733.051 of the Revised3286
Code, which shall be determined by multiplying the corporation's3287
net income by a fraction. The numerator of the fraction is the3288
sum of the following products: the property factor multiplied by3289
twenty, the payroll factor multiplied by twenty, and the sales3290
factor multiplied by sixty. The denominator of the fraction is3291
one hundred, provided that the denominator shall be reduced by3292
twenty if the property factor has a denominator of zero, by twenty3293
if the payroll factor has a denominator of zero, and by sixty if3294
the sales factor has a denominator of zero.3295

       The property, payroll, and sales factors shall be determined3296
as follows:3297

       (a) The property factor is a fraction the numerator of which3298
is the average value of the corporation's real and tangible3299
personal property owned or rented, and used in the trade or3300
business in this state during the taxable year, and the3301
denominator of which is the average value of all the corporation's3302
real and tangible personal property owned or rented, and used in3303
the trade or business everywhere during such year. There shall be3304
excluded from the numerator and denominator of the property factor3305
the original cost of all of the following property within Ohio:3306
property with respect to which a "pollution control facility"3307
certificate has been issued pursuant to section 5709.21 of the3308
Revised Code; property with respect to which an "industrial water3309
pollution control certificate" has been issued pursuant to section3310
6111.31 of the Revised Code; and property used exclusively during3311
the taxable year for qualified research.3312

       (i) Property owned by the corporation is valued at its3313
original cost. Property rented by the corporation is valued at3314
eight times the net annual rental rate. "Net annual rental rate"3315
means the annual rental rate paid by the corporation less any3316
annual rental rate received by the corporation from subrentals.3317

       (ii) The average value of property shall be determined by3318
averaging the values at the beginning and the end of the taxable3319
year, but the tax commissioner may require the averaging of3320
monthly values during the taxable year, if reasonably required to3321
reflect properly the average value of the corporation's property.3322

       (b) The payroll factor is a fraction the numerator of which3323
is the total amount paid in this state during the taxable year by3324
the corporation for compensation, and the denominator of which is3325
the total compensation paid everywhere by the corporation during3326
such year. There shall be excluded from the numerator and the3327
denominator of the payroll factor the total compensation paid in3328
this state to employees who are primarily engaged in qualified3329
research.3330

       (i) Compensation means any form of remuneration paid to an3331
employee for personal services.3332

       (ii) Compensation is paid in this state if: (1) the3333
recipient's service is performed entirely within this state, (2)3334
the recipient's service is performed both within and without this3335
state, but the service performed without this state is incidental3336
to the recipient's service within this state, (3) some of the3337
service is performed within this state and either the base of3338
operations, or if there is no base of operations, the place from3339
which the service is directed or controlled is within this state,3340
or the base of operations or the place from which the service is3341
directed or controlled is not in any state in which some part of3342
the service is performed, but the recipient's residence is in this3343
state.3344

       (iii) Compensation is paid in this state to any employee of3345
a common or contract motor carrier corporation, who performs the3346
employee's regularly assigned duties on a motor vehicle in more3347
than one state, in the same ratio by which the mileage traveled by3348
such employee within the state bears to the total mileage traveled3349
by such employee everywhere during the taxable year.3350

       (c) Except as provided in section 5733.059 of the Revised3351
Code, the sales factor is a fraction the numerator of which is the3352
total sales in this state by the corporation during the taxable3353
year, and the denominator of which is the total sales by the3354
corporation everywhere during such year. In determining the3355
numerator and denominator of the sales factor, receipts from the3356
sale or other disposal of a capital asset or an asset described in3357
section 1231 of the Internal Revenue Code shall be eliminated. 3358
Also, in determining the numerator and denominator of the sales3359
factor, in the case of a reporting corporation owning at least3360
eighty per cent of the issued and outstanding common stock of one3361
or more insurance companies or public utilities, except an3362
electric company, or owning at least twenty-five per cent of the3363
issued and outstanding common stock of one or more financial3364
institutions, receipts received by the reporting corporation from3365
such utilities, insurance companies, and financial institutions3366
shall be eliminated.3367

       For the purpose of this section and section 5733.03 of the3368
Revised Code, sales of tangible personal property are in this3369
state where such property is received in this state by the3370
purchaser. In the case of delivery of tangible personal property3371
by common carrier or by other means of transportation, the place3372
at which such property is ultimately received after all3373
transportation has been completed shall be considered as the place3374
at which such property is received by the purchaser. Direct3375
delivery in this state, other than for purposes of transportation,3376
to a person or firm designated by a purchaser constitutes delivery3377
to the purchaser in this state, and direct delivery outside this3378
state to a person or firm designated by a purchaser does not3379
constitute delivery to the purchaser in this state, regardless of3380
where title passes or other conditions of sale.3381

       Except as provided in section 5733.059 of the Revised Code,3382
sales, other than sales of tangible personal property, are in this3383
state if either:3384

       (i) The income-producing activity is performed solely in3385
this state;3386

       (ii) The income-producing activity is performed both within3387
and without this state and a greater proportion of the3388
income-producing activity is performed within this state than in3389
any other state, based on costs of performance.3390

       (d) If the allocation and apportionment provisions of3391
division (B) of this section do not fairly represent the extent of3392
the taxpayer's business activity in this state, the taxpayer may3393
request, which request must be in writing and must accompany the3394
report, timely filed petition for reassessment, or timely filed3395
amended report, or the tax commissioner may require, in respect to3396
all or any part of the taxpayer's allocated or apportioned base,3397
if reasonable, any one or more of the following:3398

       (i) Separate accounting;3399

       (ii) The exclusion of any one or more of the factors;3400

       (iii) The inclusion of one or more additional factors that3401
will fairly represent the taxpayer's allocated or apportioned base3402
in this state.3403

       An alternative method will be effective only with approval by3404
the tax commissioner.3405

       Nothing in this section shall be construed to extend any3406
statute of limitations set forth in this chapter.3407

       (C)(1) Subject to divisions (C)(2) and (3) of this section,3408
the total value, as shown on the books of each corporation that is3409
not a qualified holding company, of the net book value of a3410
corporation's assets less the net carrying value of its3411
liabilities, and excluding from the corporation's assets land3412
devoted exclusively to agricultural use as of the first Monday of3413
June in the corporation's taxable year as determined by the county3414
auditor of the county in which the land is located pursuant to3415
section 5713.31 of the Revised Code. For the purposes of3416
determining that total value, any reserves shown on the3417
corporation's books shall be considered liabilities or contra3418
assets, except for any reserves that are deemed appropriations of3419
retained earnings under generally accepted accounting principles.3420

       (2)(a) If, on the last day of the taxpayer's taxable year3421
preceding the tax year, the taxpayer is a related member to a3422
corporation that elects to be a qualifying holding company for the3423
tax year beginning after the last day of the taxpayer's taxable3424
year, or if, on the last day of the taxpayer's taxable year3425
preceding the tax year, a corporation that elects to be a3426
qualifying holding company for the tax year beginning after the3427
last day of the taxpayer's taxable year is a related member to the3428
taxpayer, then the taxpayer's total value shall be adjusted by the3429
qualifying amount. Except as otherwise provided under division3430
(C)(2)(b) of this section, "qualifying amount" means the amount3431
that, when added to the taxpayer's total value, and when3432
subtracted from the net carrying value of the taxpayer's3433
liabilities computed without regard to division (C)(2) of this3434
section, or when subtracted from the taxpayer's total value and3435
when added to the net carrying value of the taxpayer's liabilities3436
computed without regard to division (C)(2) of this section,3437
results in the taxpayer's debt-to-equity ratio equaling the3438
debt-to-equity ratio of the qualifying controlled group on the3439
last day of the taxable year ending prior to the first day of the3440
tax year computed on a consolidated basis in accordance with3441
general accepted accounting principles. For the purposes of3442
division (C)(2)(a) of this section, the corporation's total value,3443
after the adjustment required by that division, shall not exceed3444
the net book value of the corporation's assets.3445

       (b)(i) The amount added to the taxpayer's total value and3446
subtracted from the net carrying value of the taxpayer's3447
liabilities shall not exceed the amount of the net carrying value3448
of the taxpayer's liabilities owed to the taxpayer's related3449
members.3450

       (ii) A liability owed to the taxpayer's related members3451
includes, but is not limited to, any amount that the corporation3452
owes to a person that is not a related member if the corporation's3453
related member or related members in whole or in part guarantee3454
any portion or all of that amount, or pledge, hypothecate,3455
mortgage, or carry out any similar transactions to secure any3456
portion or all of that amount.3457

       (3) The base upon which the tax is levied under division (C)3458
of section 5733.06 of the Revised Code shall be computed by3459
multiplying the amount determined under divisions (C)(1) and (2)3460
of this section by the fraction determined under divisions3461
(B)(2)(a) to (c) of this section and, if applicable, divisions3462
(B)(2)(d)(ii) to (iv) of this section but without regard to3463
section 5733.052 of the Revised Code.3464

       (4) For purposes of division (C) of this section, "related3465
member" has the same meaning as in division (A)(6) of section3466
5733.042 of the Revised Code without regard to division (B) of3467
that section.3468

       Sec. 5733.11.  (A) If any corporation required to file a3469
report under this chapter fails to file the report within the time3470
prescribed, files an incorrect report, or fails to remit the full3471
amount of the tax due for the period covered by the report, the3472
tax commissioner may make an assessment against the corporation3473
for any deficiency for the period for which the report or tax is3474
due, based upon any information in the commissioner's possession.3475

       No assessment shall be made or issued against a corporation3476
more than three years after the later of the final date the report3477
subject to assessment was required to be filed or the date the3478
report was filed. Such time limit may be extended if both the3479
corporation and the commissioner consent in writing to the3480
extension or if an agreement waiving or extending the time limit3481
has been entered into pursuant to section 122.171 of the Revised3482
Code. Any such extension shall extend the three-year time limit3483
in division (B) of section 5733.12 of the Revised Code for the3484
same period of time. There shall be no bar or limit to an3485
assessment against a corporation that fails to file a report3486
subject to assessment as required by this chapter, or that files a3487
fraudulent report.3488

       The commissioner shall give the corporation assessed written3489
notice of the assessment asin the manner provided in section3490
5703.37 of the Revised Code. With the notice, the commissioner3491
shall provide instructions on how to petition for reassessment and3492
request a hearing on the petition.3493

       (B) Unless the corporation to which the notice of assessment3494
is directedassessed files with the tax commissioner within sixty3495
days after service thereofof the notice of assessment, either3496
personally or by certified mail as provided in section 5703.056 of3497
the Revised Code, a written petition for reassessment in writing,3498
signed by the corporations authorized agent of the corporation3499
assessed having knowledge of the facts, and makes payment of the3500
portion of the assessment required by division (E) of this3501
section, the assessment shall becomebecomes final, and the amount3502
of the assessment shall beis due and payable from the corporation3503
assessed to the treasurer of state. The petition shall indicate3504
the corporation's objections, but additional objections may be3505
raised in writing if received by the commissioner prior to the3506
date shown on the final determination by the commissioner.3507

       Unless the petitioner waives a hearing, the commissioner3508
shall assign a time and place for the hearing on the petition and3509
notify the petitioner of the time and place of the hearing by3510
personal service or certified mail, but the commissioner may3511
continue the hearing from time to time if necessary.3512

       The commissioner may make such correction to the assessment3513
as the commissioner finds proper. The commissioner shall serve a3514
copy of the final determination on the petitioner by personal3515
service or by certified mail, and the commissioner's decision in3516
the matter shall be final, subject to appeal as provided in3517
section 5717.02 of the Revised Code. Only objections decided on3518
the merits by the board of tax appeals or a court shall be given3519
collateral estoppel or res judicata effect in considering an3520
application for refund of amounts paid pursuant to the assessment.3521
If the petition has been properly filed, the commissioner shall3522
proceed under section 5703.60 of the Revised Code.3523

       (C) After an assessment becomes final, if any portion of the3524
assessment remains unpaid, including accrued interest, a certified3525
copy of the tax commissioner's entry making the assessment final3526
may be filed in the office of the clerk of the court of common3527
pleas in the county in which the corporation has an office or3528
place of business in this state, the county in which the3529
corporation's statutory agent is located, or Franklin county.3530

       Immediately upon the filing of the entry, the clerk shall3531
enter a judgment against the corporation assessed in the amount3532
shown on the entry. The judgment may be filed by the clerk in a3533
loose-leaf book entitled "special judgments for state corporate3534
franchise and litter taxes," and shall have the same effect as3535
other judgments. Execution shall issue upon the judgment upon the3536
request of the tax commissioner, and all laws applicable to sales3537
on execution shall apply to sales made under the judgment.3538

       The portion of an assessment not paid within sixty days after3539
the day the assessment was issued shall bear interest at the rate3540
per annum prescribed by section 5703.47 of the Revised Code from3541
the day the tax commissioner issues the assessment until the3542
assessment is paid. Interest shall be paid in the same manner as3543
the tax and may be collected by issuing an assessment under this3544
section.3545

       (D) All money collected under this section shall be3546
considered as revenue arising from the taxes imposed by this3547
chapter.3548

       (E) The portion of an assessment whichthat must be paid3549
upon the filing of a petition for reassessment shall be as3550
follows:3551

       (1) If the sole item objected to is the assessed penalty or3552
interest, payment of the assessment, including interest but not3553
penalty, is required;3554

       (2) If the corporation assessed failed to file, prior to the3555
date of issuance of the assessment, the annual report required by3556
section 5733.02 of the Revised Code, any amended report required3557
by division (C) of section 5733.031 of the Revised Code for the3558
tax year at issue, or any amended report required by division (D)3559
of section 5733.067 of the Revised Code to indicate a reduction in3560
the amount of the credit provided under that section, payment of3561
the assessment, including interest but not penalty, is required;3562

       (3) If the corporation assessed filed, prior to the date of3563
issuance of the assessment, the annual report required by section3564
5733.02 of the Revised Code, all amended reports required by3565
division (C) of section 5733.031 of the Revised Code for the tax3566
year at issue, and all amended reports required by division (D) of3567
section 5733.067 of the Revised Code to indicate a reduction in3568
the amount of the credit provided under that section, and a3569
balance of the taxes shown due on the reports as computed on the3570
reports remains unpaid, payment of only that portion of the3571
assessment representing the unpaid balance of tax and interest is3572
required;3573

       (4) If the corporation assessed does not dispute that it is3574
a taxpayer but claims the protections of section 101 of Public Law3575
86-272, 73 Stat. 555, 15 U.S.C.A. 381, as amended, payment of only3576
that portion of the assessment representing any balance of taxes3577
shown due on the corporation's annual report required by section3578
5733.02 of the Revised Code, as computed on the report, that3579
remains unpaid, and that represents taxes imposed by division (C)3580
of section 5733.06, division (C)(2) of section 5733.065, and3581
division (C) of section 5733.066 of the Revised Code, together3582
with all related interest, is required;3583

       (5) If none of the conditions specified in divisions (E)(1)3584
to (4) of this section apply, or if the corporation assessed3585
disputes that it is a taxpayer, no payment is required.3586

       (F) Notwithstanding the fact that a petition for3587
reassessment is pending, the corporation may pay all or a portion3588
of the assessment that is the subject of the petition. The3589
acceptance of a payment by the treasurer of state does not3590
prejudice any claim for refund upon final determination of the3591
petition.3592

       If upon final determination of the petition an error in the3593
assessment is corrected by the tax commissioner, upon petition so3594
filed or pursuant to a decision of the board of tax appeals or any3595
court to which the determination or decision has been appealed, so3596
that the amount due from the corporation under the corrected3597
assessment is less than the portion paid, there shall be issued to3598
the corporation, its assigns, or legal representative a refund in3599
the amount of the overpayment as provided by section 5733.12 of3600
the Revised Code, with interest on that amount as provided by3601
section 5733.26 of the Revised Code, subject to section 5733.1213602
of the Revised Code.3603

       Sec. 5733.12.  (A) Four and two-tenths per cent of all3604
payments received by the treasurer of state and by the tax3605
commissioner from the taxes imposed under sections 5733.06 and3606
5733.41 of the Revised Code shall be credited to the local3607
government fund for distribution in accordance with section3608
5747.50 of the Revised Code, six-tenths of one per cent shall be3609
credited to the local government revenue assistance fund for3610
distribution in accordance with section 5747.61 of the Revised3611
Code, and ninety-five and two-tenths per cent shall be credited to3612
the general revenue fund.3613

       (B) Except as otherwise provided under divisions (C) and (D)3614
of this section, an application to refund to the corporation the3615
amount of taxes imposed under section 5733.06 of the Revised Code3616
that are overpaid, paid illegally or erroneously, or paid on any3617
illegal, erroneous, or excessive assessment, with interest thereon3618
as provided by section 5733.26 of the Revised Code, shall be filed3619
with the tax commissioner, on the form prescribed by the3620
commissioner, within three years from the date of the illegal,3621
erroneous, or excessive payment of the tax, or within any3622
additional period allowed by division (C)(2) of section 5733.031,3623
division (D)(2) of section 5733.067, or division (A) of section3624
5733.11 of the Revised Code. For purposes of division (B) of this3625
section, any payment that the applicant made before the due date3626
or extended due date for filing the report to which the payment3627
relates shall be deemed to have been made on the due date or3628
extended due date.3629

       On the filing of the refund application, the commissioner3630
shall determine the amount of refund due andto which the3631
applicant is entitled. If the amount is not less than that3632
claimed, the commissioner shall certify suchthe amount to the3633
director of budget and management and treasurer of state for3634
payment from the tax refund fund created by section 5703.052 of3635
the Revised Code. If the amount is less than that claimed, the3636
commissioner shall proceed in accordance with section 5703.70 of3637
the Revised Code.3638

       (C) "Ninety days" shall be substituted for "three years" in3639
division (B) of this section if the taxpayer satisfies both of the3640
following:3641

       (1) The taxpayer has applied for a refund based in whole or3642
in part upon section 5733.0611 of the Revised Code;3643

       (2) The taxpayer asserts that the imposition or collection3644
of the tax imposed or charged by section 5733.06 of the Revised3645
Code or any portion of such tax violates the Constitution of the3646
United States or the Constitution of this state.3647

       (D)(1) Division (D)(2) of this section applies only if all3648
of the following conditions are satisfied:3649

       (a) A qualifying pass-through entity pays an amount of the3650
tax imposed by section 5733.41 of the Revised Code;3651

       (b) The taxpayer is a qualifying investor as to that3652
qualifying pass-through entity;3653

       (c) The taxpayer did not claim the credit provided for in3654
section 5733.0611 of the Revised Code as to the tax described in3655
division (D)(1)(a) of this section;3656

       (d) The three-year period described in division (B) of this3657
section has ended as to the taxable year for which the taxpayer3658
otherwise would have claimed that credit.3659

       (2) A taxpayer shall file an application for refund pursuant3660
to this division within one year after the date the payment3661
described in division (D)(1)(a) of this section is made. An3662
application filed under this division shall only claim refund of3663
overpayments resulting from the taxpayer's failure to claim the3664
credit described in division (D)(1)(c) of this section. Nothing3665
in this division shall be construed to relieve a taxpayer from3666
complying with the provisions of division (I)(14) of section3667
5733.04 of the Revised Code.3668

       Sec. 5733.28.  (A) In addition to any other penalty imposed3669
by this chapter or Chapter 5703. of the Revised Code, the3670
following penalties shall apply:3671

       (1) If a taxpayer required to file any report, including an3672
informational notice or report, under this chapter fails to make3673
and file the report within the time prescribed, including any3674
extensions of time granted by the tax commissioner, a penalty may3675
be imposed not exceeding the greater of fifty dollars per month or3676
fraction of a month, not to exceed five hundred dollars, or five3677
per cent per month or fraction of a month, not to exceed fifty per3678
cent, of the tax required to be shown on the report, for each3679
month or fraction of a month elapsing between the due date,3680
including extensions of the due date, and the date on which filed.3681

       (2) IfExcept as provided in division (C) of section 5733.0213682
of the Revised Code, if a taxpayer fails to pay anythe amount of3683
tax required to be paid under this chapter, except estimated tax3684
under section 5733.021 of the Revised Code, by the dates3685
prescribed in this chapter for payment, a penalty may be imposed3686
not exceeding twice the interest charged under division (A) of3687
section 5733.26fifteen per cent of the Revised Code for the3688
delinquent payment.3689

       (3) If a taxpayer fails to pay any amount of estimated tax3690
required to be paid under section 5733.021 of the Revised Code by3691
the dates prescribed for payment, a penalty may be imposed not3692
exceeding twice the interest charged under division (A) of section3693
5733.29 of the Revised Code for the delinquent payment.3694

       (4) If a taxpayer files what purports to be a report3695
required by this chapter that does not contain information upon3696
which the substantial correctness of the report may be judged or3697
contains information that on its face indicates that the report is3698
substantially incorrect, and the filing of the report in that3699
manner is due to a position that is frivolous or a desire that is3700
apparent from the report to delay or impede the administration of3701
the tax levied by this chapter, a penalty of up to five hundred3702
dollars may be imposed.3703

       (5)(4) If a taxpayer makes a fraudulent attempt to evade the3704
reporting or payment of the tax required to be shown on any report3705
required under this chapter, a penalty may be imposed not3706
exceeding the greater of one thousand dollars or one hundred per3707
cent of the tax required to be shown on the report.3708

       (6)(5) If any person makes a false or fraudulent claim for a3709
refund under this chapter, a penalty may be imposed not exceeding3710
the greater of one thousand dollars or one hundred per cent of the3711
claim. The penalty imposed under division (A)(6)(5) of this3712
section, any refund issued on the claim, and interest on any3713
refund from the date of the refund, may be assessed under section3714
5733.11 of the Revised Code as tax, penalty, or interest imposed3715
under this chapter without regard to whether the person making the3716
claim is otherwise subject to the provisions of this chapter, and3717
without regard to any time limitation for the assessment imposed3718
by division (A) of section 5733.11 of the Revised Code.3719

       (B) For purposes of this section, the tax required to be3720
shown on the report shall be reduced by the amount of any part of3721
the tax paid on or before the date, including extensions of the3722
date, prescribed for filing the report.3723

       (C) Each penalty imposed under this section shall be in3724
addition to any other penalty provided in this section. All or3725
part of any penalty imposed under this section shall be abated by3726
the commissioner if the taxpayer shows that the failure to comply3727
with the provisions of this chapter is due to reasonable cause and3728
not willful neglect.3729

       Sec. 5735.06.  (A) On or before the last day of each month,3730
each motor fuel dealer shall file with the treasurer of state a3731
report for the preceding calendar month, on forms prescribed by or3732
in a form acceptable to the tax commissioner. The report shall3733
include the following information:3734

       (1) An itemized statement of the number of gallons of all3735
motor fuel received during the preceding calendar month by such3736
motor fuel dealer, which has been produced, refined, prepared,3737
distilled, manufactured, blended, or compounded by such motor fuel3738
dealer in the state;3739

       (2) An itemized statement of the number of gallons of all3740
motor fuel received by such motor fuel dealer in the state from3741
any source during the preceding calendar month, other than motor3742
fuel included in division (A)(1) of this section, together with a3743
statement showing the date of receipt of such motor fuel; the name3744
of the person from whom purchased or received; the date of receipt3745
of each shipment of motor fuel; the point of origin and the point3746
of destination of each shipment; the quantity of each of said3747
purchases or shipments; the name of the carrier; the number of3748
gallons contained in each car if shipped by rail; the point of3749
origin, destination, and shipper if shipped by pipe line; or the3750
name and owner of the boat, barge, or vessel if shipped by water;3751

       (3) An itemized statement of the number of gallons of motor3752
fuel which such motor fuel dealer has during the preceding3753
calendar month:3754

       (a) For motor fuel other than gasoline sold for use other3755
than for operating motor vehicles on the public highways or on3756
waters within the boundaries of this state;3757

       (b) Exported from this state to any other state or foreign3758
country as provided in division (A)(3)(4) of section 5735.05 of3759
the Revised Code;3760

       (c) Sold to the United States government or any of its3761
agencies;3762

       (d) Sold for delivery to motor fuel dealers;3763

       (e) Sold exclusively for use in the operation of aircraft;3764

       (4) Such other information incidental to the enforcement of3765
the motor fuel laws of the state as the commissioner requires.3766

       (B) The report shall show the tax due, computed as follows:3767

       (1) The following deductions shall be made from the total3768
number of gallons of motor fuel received by the motor fuel dealer3769
within the state during the preceding calendar month:3770

       (a) The total number of gallons of motor fuel received by3771
the motor fuel dealer within the state and sold or otherwise3772
disposed of during the preceding calendar month as set forth in3773
section 5735.05 of the Revised Code;3774

       (b) The total number of gallons received during the3775
preceding calendar month and sold or otherwise disposed of to3776
another licensed motor fuel dealer pursuant to section 5735.05 of3777
the Revised Code;3778

       (c) To cover the costs of the motor fuel dealer in compiling3779
the report, and evaporation, shrinkage, or other unaccounted-for3780
losses:3781

       (i) If the report is timely filed and the tax is timely3782
paid, three per cent of the total number of gallons of motor fuel3783
received by the motor fuel dealer within the state during the3784
preceding calendar month less the total number of gallons deducted3785
under divisions (B)(1)(a) and (b) of this section, less one per3786
cent of the total number of gallons of motor fuel that were sold3787
to a retail dealer during the preceding calendar month;3788

       (ii) If the report required by division (A) of this section3789
is not timely filed and the tax is not timely paid, no deduction3790
shall be allowed;3791

       (iii) If the report is incomplete, no deduction shall be3792
allowed for any fuel on which the tax is not timely reported and3793
paid;3794

       (2) The number of gallons remaining after the deductions3795
have been made shall be multiplied separately by each of the3796
following amounts:3797

       (a) The cents per gallon rate;3798

       (b) Two cents.3799

       The sum of the products obtained in divisions (B)(2)(a) and3800
(b) of this section shall be the amount of motor fuel tax for the3801
preceding calendar month.3802

       (C) The report shall be filed together with payment of the3803
tax shown on the report to be due, unless the motor fuel dealer is3804
required by section 5735.062 of the Revised Code to pay the tax by3805
electronic funds transfer, in which case the dealer shall file the3806
report pursuant to this section and pay the tax pursuant to3807
section 5735.062 of the Revised Code. The commissioner may extend3808
the time for filing reports and may remit all or part of penalties3809
which may become due under sections 5735.01 to 5735.99 of the3810
Revised Code. The treasurer of state shall stamp or otherwise3811
mark on all returns the date received by the treasurer and shall3812
also show thereon by stamp or otherwise the amount of payment3813
received for the month for which the report is filed. Thereafter,3814
the treasurer of state shall immediately transmit all reports3815
filed under this section to the commissioner. For purposes of3816
this section and sections 5735.062 and 5735.12 of the Revised3817
Code, a report required to be filed under this section is3818
considered filed when it is received by the treasurer of state,3819
and remittance of the tax due is considered to be made when the3820
remittance is received by the treasurer of state or when credited3821
to an account designated by the treasurer of state for the receipt3822
of tax remittances.3823

       (D) The tax commissioner may require a motor fuel dealer to3824
file a report for a period other than one month. Such a report,3825
together with payment of the tax, shall be filed not later than3826
thirty days after the last day of the prescribed reporting period.3827

       (E) No person required by this section to file a tax report3828
shall file a false or fraudulent tax report or supporting3829
schedule.3830

       Sec. 5735.11.  (A) If the tax or any portion of the tax3831
imposed by this chapter, excluding the tax imposed by section3832
5735.31 of the Revised Code, whether determined by the tax3833
commissioner or the motor fuel dealer, is not paid on or before3834
the date prescribed in section 5735.06 of the Revised Code,3835
interest shall be collected and paid in the same manner as the tax3836
upon the unpaid amount, computed at the rate per annum prescribed3837
by section 5703.47 of the Revised Code, from the date prescribed3838
for payment of the tax to the date of payment or to the date an3839
assessment is issued under section 5735.12 or 5735.121 of the3840
Revised Code, whichever occurs first. Interest may be collected3841
by assessment in the manner provided in section 5735.12 or3842
5735.121 of the Revised Code. All interest shall be paid in the3843
same manner as the tax and shall be considered as revenue arising3844
from the tax imposed by section 5735.05 of the Revised Code.3845

       (B) Interest shall be allowed and paid upon any refund3846
granted in respect to the payment of an illegal or erroneous3847
assessment for any tax imposed under this chapter from the date of3848
the overpayment. The interest shall be computed at the rate per3849
annum prescribed by section 5703.47 of the Revised Code.3850

       Sec. 5735.12.  (A) Any motor fuel dealer required by this3851
chapter to file reports and pay the tax levied by this chapter who3852
fails to file the report within the time prescribed, may be liable3853
for an additional charge not exceeding the greater of ten per cent3854
of the motor fuel dealer's tax liability for that month or fifty3855
dollars. The tax commissioner may remit all or a portion of the3856
additional charge and may adopt rules relating to the remission of3857
all or a portion of the charge.3858

       If any person required by this chapter to file reports and3859
pay the taxes, interest, or additional charge levied by this3860
chapter fails to file the report, files an incomplete or incorrect3861
report, or fails to remit the full amount of the tax, interest, or3862
additional charge due for the period covered by the report, the3863
commissioner may make an assessment against the person based upon3864
any information in the commissioner's possession.3865

       No assessment shall be made against any motor fuel dealer for3866
taxes imposed by this chapter more than four years after the date3867
on which the report on which the assessment was based was due or3868
was filed, whichever is later. This section does not bar an3869
assessment against any motor fuel dealer who fails to file a3870
report required by section 5735.06 of the Revised Code, or who3871
files a fraudulent motor fuel tax report.3872

       A penalty of up to fifteen per cent may be added to the3873
amount of every assessment made under this section. The3874
commissioner may adopt rules providing for the imposition and3875
remission of penalties added to assessments made under this3876
section.3877

       The commissioner shall give the party assessed written notice3878
of the assessment asin the manner provided in section 5703.37 of3879
the Revised Code. With the notice, the commissioner shall provide3880
instructions on how to petition for reassessment and request a3881
hearing on the petition.3882

       (B) Unless the party to whom the notice of assessment is3883
directedassessed files with the tax commissioner within sixty3884
days after service of the notice of assessment, either personally3885
or by certified mail, a written petition for reassessment in3886
writing, signed by the party assessed, or by thethat party's3887
authorized agent of the party assessed having knowledge of the3888
facts, the assessment shall becomebecomes final and the amount of3889
the assessment shall beis due and payable from the party assessed3890
to the treasurer of state. The petition shall indicate the3891
objections of the party assessed, but additional objections may be3892
raised in writing if received by the commissioner prior to the3893
date shown on the final determination by the commissioner.3894

       Unless the petitioner waives a hearing, the commissioner3895
shall assign a time and place for the hearing on the petition and3896
notify the petitioner of the time and place of the hearing by3897
personal service or certified mail, but the commissioner may3898
continue the hearing from time to time if necessary.3899

       The commissioner may make such correction to the3900
commissioner's assessment as the commissioner finds proper. The3901
commissioner shall serve a copy of the commissioner's final3902
determination on the petitioner by personal service or certified3903
mail, and the commissioner's decision in the matter shall be3904
final, subject to appeal as provided in section 5717.02 of the3905
Revised Code. If the petition has been properly filed, the3906
commissioner shall proceed under section 5703.60 of the Revised3907
Code.3908

       (C) After an assessment becomes final, if any portion of the3909
assessment remains unpaid, including accrued interest, a certified3910
copy of the tax commissioner's entry making the assessment final3911
may be filed in the office of the clerk of the court of common3912
pleas in the county in which the party assessed resides or in3913
which the business of the party assessed is conducted. If the3914
party assessed maintains no place of business in this state and is3915
not a resident of this state, the certified copy of the entry may3916
be filed in the office of the clerk of the court of common pleas3917
of Franklin county.3918

       The clerk, immediatelyImmediately upon the filing of the3919
entry, the clerk shall enter a judgment for the state against the3920
party assessed in the amount shown on the entry. The judgment may3921
be filed by the clerk in a loose-leaf book entitled "special3922
judgments for state motor fuel tax," and shall have the same3923
effect as other judgments. Execution shall issue upon the judgment3924
upon the request of the tax commissioner, and all laws applicable3925
to sales on execution shall apply to sales made under the3926
judgment.3927

       The portion of the assessment not paid within sixty days3928
after the day the assessment was issued shall bear interest at the3929
rate per annum prescribed by section 5703.47 of the Revised Code3930
from the day the tax commissioner issues the assessment until it3931
is paid. Interest shall be paid in the same manner as the tax and3932
may be collected by the issuance of an assessment under this3933
section.3934

       (D) All money collected by the tax commissioner under this3935
section shall be paid to the treasurer of state, and when paid3936
shall be considered as revenue arising from the tax imposed by3937
this chapter.3938

       (E) If the tax commissioner determines that the commissioner3939
has erroneously refunded motor fuel tax to any person, the3940
commissioner may make an assessment against the person for3941
recovery of the erroneously refunded tax.3942

       Sec. 5735.122.  The tax commissioner shall refund to dealers3943
or to interstate bus operators makingany person assessed motor3944
fuel equalization paymentstax the amount of taxes paid illegally3945
or erroneously or paid on an illegal or erroneous assessment.3946
Applications for refund shall be filed with the tax commissioner,3947
on the form prescribed by the commissioner, within four years from3948
the date of the illegal or erroneous payment. No person shall3949
file a claim for the tax on fewer than one hundred gallons of3950
motor fuel. On3951

       On the filing of the application, the commissioner shall3952
determine the amount of refund due andto which the applicant is3953
entitled. If the amount is not less than that claimed, the3954
commissioner shall certify the amount to the director of budget3955
and management and treasurer of state for payment from the tax3956
refund fund created by section 5703.052 of the Revised Code,3957
except that no refund shall be authorized or paid on a claim for3958
the tax on fewer than one hundred gallons of motor fuel. TheIf3959
the amount is less than that claimed, the commissioner shall3960
proceed in accordance with section 5703.70 of the Revised Code.3961

        The refund authorized by this section or section 5703.70 of3962
the Revised Code shall be reduced by the cents per gallon amount3963
of any qualified fuel credit received under section 5735.145 of3964
the Revised Code, as determined by the commissioner, for each3965
gallon of qualified fuel included in the total gallonage of motor3966
fuel upon which the refund is computed.3967

       Sec. 5735.13.  A refund shall be made to any person for the3968
motor fuel tax paid on any motor fuel whichthat is lost or3969
destroyed through leakage, fire, explosion, lightning, flood,3970
tornado, windstorm, or any other cause, except theft, evaporation,3971
shrinkage, and unaccounted-for losses. No refund shall be3972
authorized or ordered under this section for any single loss of3973
less than one hundred gallons, nor except upon notice to the tax3974
commissioner within thirty days from the date of such loss or3975
destruction or the discovery thereof, and upon filing with the tax3976
commissioner within sixty days thereafter an application in the3977
form of an affidavit sworn to by the claimant setting forth in3978
full the circumstances of the loss, and upon presentation of3979
supporting evidence satisfactory to the commissioner. The3980

       On the filing of the application, the commissioner shall3981
determine the amount of the refund due andto which the applicant3982
is entitled. If the amount is not less than that claimed, the3983
commissioner shall certify suchthe amount to the director of3984
budget and management and treasurer of state for payment from the3985
tax refund fund provided forcreated by section 5703.052 of the3986
Revised Code. TheIf the amount is less than that claimed, the3987
commissioner shall proceed in accordance with section 5703.70 of3988
the Revised Code.3989

       The refund authorized by this section or section 5703.70 of3990
the Revised Code shall be reduced by the cents per gallon amount3991
of any qualified fuel credit received under section 5735.145 of3992
the Revised Code, as determined by the commissioner, for each3993
gallon of qualified fuel included in the total gallonage of motor3994
fuel upon which the refund is computed.3995

       Sec. 5735.14.  Any person who uses any motor fuel, on which3996
the tax imposed by this chapter has been paid, for the purpose of3997
operating stationary gas engines, tractors not used on public3998
highways, unlicensed motor vehicles used exclusively in intraplant3999
operations, vessels when used in trade, including vessels when4000
used in connection with an activity whichthat constitutes a4001
person's chief business or means of livelihood or any other vessel4002
used entirely for commercial purposes, vessels used for commercial4003
fishing, vessels used by the sea scout department of the boy4004
scouts of America chiefly for training scouts in seamanship,4005
vessels used or owned by any railroad company, railroad car ferry4006
company, the United States, this state, or any political4007
subdivision of this state, or aircraft, or who uses any such fuel4008
upon which such tax has been paid, for cleaning or for dyeing, or4009
any purpose other than the operation of motor vehicles upon4010
highways or upon waters within the boundaries of this state, shall4011
be reimbursed in the amount of the tax so paid on such motor fuel4012
as provided in this section; provided, that any person purchasing4013
motor fuel in this state on which taxes levied under Title LVII of4014
the Revised Code have been paid shall be reimbursed for such taxes4015
paid in this state on such fuel used by that person in another4016
state on which a tax is paid for such usage, except such tax used4017
as a credit against the tax levied by section 5728.06 of the4018
Revised Code. A person shall not be reimbursed for taxes paid on4019
fuel that is used while a motor vehicle is idling or used to4020
provide comfort or safety in the operation of a motor vehicle.4021
Sales of motor fuel, on which the tax imposed by this chapter has4022
been paid, from one person to another do not constitute use of the4023
fuel and are not subject to a refund under this section.4024

       Such person shall file with the tax commissioner an4025
application for refund within one year from the date of purchase,4026
stating the quantity of fuel used for purposes other than the4027
operation of motor vehicles, except that no person shall file a4028
claim for the tax on fewer than one hundred gallons of motor fuel.4029
SuchThe application shall be accompanied by the statement4030
described in section 5735.15 of the Revised Code showing such4031
purchase, together with evidence of payment thereof. After4032

       After consideration of suchthe application and statement,4033
the commissioner shall determine the amount of refund due andto4034
which the applicant is entitled. If the amount is not less than4035
that claimed, the commissioner shall certify suchthe amount to4036
the director of budget and management and treasurer of state for4037
payment from the tax refund fund created by section 5703.052 of4038
the Revised Code. NoIf the amount is less than that claimed, the4039
commissioner shall proceed in accordance with section 5703.70 of4040
the Revised Code.4041

       No refund shall be authorized or paid under this section on a4042
single claim for tax on fewer than one hundred gallons of motor4043
fuel. The commissioner may require that the application be4044
supported by the affidavit of the claimant. The4045

       The refund authorized by this section or section 5703.70 of4046
the Revised Code shall be reduced by the cents per gallon amount4047
of any qualified fuel credit received under section 5735.145 of4048
the Revised Code, as determined by the commissioner, for each4049
gallon of qualified fuel included in the total gallonage of motor4050
fuel upon which the refund is computed.4051

       The right to receive any refund under this section or section4052
5703.70 of the Revised Code is not assignable. The payment of4053
this refund shall not be made to any person other than the person4054
originally entitled thereto who used the motor fuel upon which the4055
claim for refund is based, except that such refunds when allowed4056
and certified as provided in this section may be paid to the4057
executor, the administrator, the receiver, the trustee in4058
bankruptcy, or the assignee in insolvency proceedings of such4059
person.4060

       Sec. 5735.141.  Any retail dealer of motor fuel shall receive4061
a refund for Ohio motor fuel taxes paid on fuel lost by a retail4062
dealer through shrinkage and evaporation. This refund shall be4063
one per cent of the Ohio motor fuel taxes paid on fuel purchased4064
during any semiannual period ending the thirtieth day of June or4065
the thirty-first day of December.4066

       In order to receive a refund, the retail dealer shall file4067
with the tax commissioner, within one hundred twenty days after4068
the thirtieth day of June and the thirty-first day of December of4069
each year, an application for a refund stating the quantity of4070
motor fuel whichthat was purchased for resale by the applicant4071
during the preceding semiannual period ending the thirtieth day of4072
June or the thirty-first day of December and upon which the motor4073
fuel tax has been paid. No person shall file a claim for the tax4074
on fewer than one hundred gallons of motor fuel. The form and4075
contents of the application shall be prescribed by the tax4076
commissioner, and the application shall be signed in accordance4077
with section 5703.25 of the Revised Code. The taxOn the filing of4078
the application, the commissioner shall determine the amount of4079
refund to which the applicant is entitled. If the amount is not4080
less than that claimed, the commissioner shall certify the amount4081
of the refund to the director of budget and management and4082
treasurer of state for payment from the tax refund fund provided4083
forcreated by section 5703.052 of the Revised Code. NoIf the4084
amount is less than that claimed, the commissioner shall proceed4085
in accordance with section 5703.70 of the Revised Code.4086

       No refund shall be authorized or ordered under this section4087
for any single claim for the tax on fewer than one hundred gallons4088
of motor fuel. The4089

       The refund authorized by this section or section 5703.70 of4090
the Revised Code shall be reduced by the cents per gallon amount4091
of any qualified fuel credit received under section 5735.145 of4092
the Revised Code, as determined by the commissioner, for each4093
gallon of qualified fuel included in the total gallonage of motor4094
fuel upon which the refund is computed.4095

       The right to receive any refund under this section or section4096
5703.70 of the Revised Code is not assignable. The payment of the4097
refund shall not be made to any person other than the retail4098
dealer originally entitled thereto, except that the refund may be4099
paid to the executor, administrator, receiver, trustee in4100
bankruptcy, or assignee in insolvency proceedings of such4101
retailer.4102

       A motor fuel dealer shall be deemed to be a retail dealer4103
when acting in a retail capacity.4104

       Sec. 5735.142.  Any person who uses any motor fuel, on which4105
the tax imposed by sections 5735.05, 5735.25, and 5735.29 of the4106
Revised Code has been paid, for the purpose of operating a transit4107
bus shall be reimbursed in the amount of the tax paid on motor4108
fuel used by public transportation systems providing transit or4109
paratransit service on a regular and continuing basis within the4110
state.4111

       Such person shall file with the tax commissioner an4112
application for refund within one year from the date of purchase,4113
stating the quantity of fuel used for operating transit buses used4114
by local transit systems in furnishing scheduled common carrier,4115
public passenger land transportation service along regular routes4116
primarily in one or more municipal corporations, except that no4117
person shall file a claim for the tax on fewer than one hundred4118
gallons of motor fuel. The application shall be accompanied by4119
the statement described in section 5735.15 of the Revised Code4120
showing the purchase, together with evidence of payment thereof.4121
After4122

       After consideration of the application and statement, the4123
commissioner shall determine the amount of refund due andto which4124
the applicant is entitled. If the amount is not less than that4125
claimed, the commissioner shall certify suchthe amount to the4126
director of budget and management and treasurer of state for4127
payment from the tax refund fund provided for increated by4128
section 5703.052 of the Revised Code. TheIf the amount is less4129
than that claimed, the commissioner shall proceed in accordance4130
with section 5703.70 of the Revised Code.4131

       The commissioner may require that the application be4132
supported by the affidavit of the claimant. No refund shall be4133
authorized or ordered for any single claim for the tax on fewer4134
than one hundred gallons of motor fuel. The4135

       The refund authorized by this section or section 5703.70 of4136
the Revised Code shall be reduced by the cents per gallon amount4137
of any qualified fuel credit received under section 5735.145 of4138
the Revised Code, as determined by the commissioner, for each4139
gallon of qualified fuel included in the total gallonage of motor4140
fuel upon which the refund is computed.4141

       The right to receive any refund under this section or section4142
5703.70 of the Revised Code is not assignable. The payment of4143
this refund shall not be made to any person other than the person4144
originally entitled thereto who used the motor fuel upon which the4145
claim for refund is based, except that the refund when allowed and4146
certified, as provided in this section, may be paid to the4147
executor, the administrator, the receiver, the trustee in4148
bankruptcy, or the assignee in insolvency proceedings of the4149
person.4150

       Sec. 5735.18.  Any person other than a motor fuel dealer who4151
purchases motor fuel upon which the tax has been paid to this4152
state and who sells the same outside this state for use outside4153
this state or who uses the same on highways or waters outside this4154
state and pays a tax on such use or sells the same to the United4155
States government or any of its agencies may be reimbursed in the4156
amount of such tax as provided in this chapter. All claims4157
applications for refund of the tax paid on motor fuel sold for4158
export from the state or sold to the United States government or4159
any of its agencies shall be made in such form and shall set forth4160
such information as the tax commissioner prescribes, and the4161
claimantapplicant shall satisfy the commissioner that the motor4162
fuel has been sold as stated and that the tax thereon has been4163
paid. ClaimsApplications for refund of the tax paid on motor fuel4164
sold to the United States government or any of its agencies shall4165
be supported by an affidavit of the claimant and by a tax4166
exemption certificate executed by the vendee in such form as is4167
prescribed by the commissioner. Such claims for refund filed under4168
this section shall be certified and paidIf the United States4169
government or any of its agencies purchases motor fuel upon which4170
the tax has been paid to this state, the United States government4171
or agency may be reimbursed in the amount of such tax as provided4172
in this chapter, provided that the seller of the motor fuel has4173
not applied for a refund on behalf of the United States government4174
or agency. Applications filed by the United States government or4175
any of its agencies for refund of the tax paid on motor fuel4176
purchases shall be supported by an invoice or similar fuel4177
purchase document issued by the seller of the fuel.4178

       On the filing of an application under this section, the4179
commissioner shall determine the amount of refund to which the4180
applicant is entitled. If the amount is not less than that4181
claimed, the commissioner shall certify and pay that amount in the4182
same manner as provided in section 5735.14 of the Revised Code.4183
TheIf the amount is less than that claimed, the commissioner4184
shall proceed in accordance with section 5703.70 of the Revised4185
Code.4186

       The person shall file with the tax commissioner an4187
application for refund within one year from the date of sale or4188
purchase. The refund authorized by this section or section4189
5703.70 of the Revised Code shall be reduced by the cents per4190
gallon amount of any qualified fuel credit received under section4191
5735.145 of the Revised Code, as determined by the commissioner,4192
for each gallon of qualified fuel included in the total gallonage4193
of motor fuel upon which the refund is computed.4194

       Sec. 5739.01.  As used in this chapter:4195

       (A) "Person" includes individuals, receivers, assignees,4196
trustees in bankruptcy, estates, firms, partnerships,4197
associations, joint-stock companies, joint ventures, clubs,4198
societies, corporations, the state and its political subdivisions,4199
and combinations of individuals of any form.4200

       (B) "Sale" and "selling" include all of the following4201
transactions for a consideration in any manner, whether absolutely4202
or conditionally, whether for a price or rental, in money or by4203
exchange, and by any means whatsoever:4204

       (1) All transactions by which title or possession, or both,4205
of tangible personal property, is or is to be transferred, or a4206
license to use or consume tangible personal property is or is to4207
be granted;4208

       (2) All transactions by which lodging by a hotel is or is to4209
be furnished to transient guests;4210

       (3) All transactions by which:4211

       (a) An item of tangible personal property is or is to be4212
repaired, except property, the purchase of which would not be4213
exempt fromsubject to the tax imposed by section 5739.02 of the4214
Revised Code;4215

       (b) An item of tangible personal property is or is to be4216
installed, except property, the purchase of which would not be4217
exempt fromsubject to the tax imposed by section 5739.02 of the4218
Revised Code or property that is or is to be incorporated into and4219
will become a part of a production, transmission, transportation,4220
or distribution system for the delivery of a public utility4221
service;4222

       (c) The service of washing, cleaning, waxing, polishing, or4223
painting a motor vehicle is or is to be furnished;4224

       (d) Industrial laundry cleaning services are or are to be4225
provided;4226

       (e) Automatic data processing, computer services, or4227
electronic information services are or are to be provided for use4228
in business when the true object of the transaction is the receipt4229
by the consumer of automatic data processing, computer services,4230
or electronic information services rather than the receipt of4231
personal or professional services to which automatic data4232
processing, computer services, or electronic information services4233
are incidental or supplemental. Notwithstanding any other4234
provision of this chapter, such transactions that occur between4235
members of an affiliated group are not sales. An affiliated group4236
means two or more persons related in such a way that one person4237
owns or controls the business operation of another member of the4238
group. In the case of corporations with stock, one corporation4239
owns or controls another if it owns more than fifty per cent of4240
the other corporation's common stock with voting rights.4241

       (f) Telecommunications service, other than mobile4242
telecommunications service after July 31, 2002, is or is to be4243
provided that originates or terminates in this state and is4244
charged in the records of the telecommunications service vendor to4245
the consumer's telephone number or account in this state, or that4246
both originates and terminates in this state; but does not include4247
transactions by which telecommunications service is paid for by4248
using a prepaid authorization number or prepaid telephone calling4249
card, or by which local telecommunications service is obtained4250
from a coin-operated telephone and paid for by using coin;4251

       (g) Landscaping and lawn care service is or is to be4252
provided;4253

       (h) Private investigation and security service is or is to4254
be provided;4255

       (i) Information services or tangible personal property is4256
provided or ordered by means of a nine hundred telephone call;4257

       (j) Building maintenance and janitorial service is or is to4258
be provided;4259

       (k) Employment service is or is to be provided;4260

       (l) Employment placement service is or is to be provided;4261

       (m) Exterminating service is or is to be provided;4262

       (n) Physical fitness facility service is or is to be4263
provided;4264

       (o) Recreation and sports club service is or is to be4265
provided.4266

       (p) After July 31, 2002, mobile telecommunications service is4267
or is to be provided when that service is sitused to this state4268
pursuant to the "Mobile Telecommunications Sourcing Act," Pub. L.4269
No. 106-252, 114 Stat. 626 to 632 (2000), 4 U.S.C.A. 116 to 126,4270
as amended.4271

       (4) All transactions by which printed, imprinted,4272
overprinted, lithographic, multilithic, blueprinted, photostatic,4273
or other productions or reproductions of written or graphic matter4274
are or are to be furnished or transferred;4275

       (5) The production or fabrication of tangible personal4276
property for a consideration for consumers who furnish either4277
directly or indirectly the materials used in the production of4278
fabrication work; and include the furnishing, preparing, or4279
serving for a consideration of any tangible personal property4280
consumed on the premises of the person furnishing, preparing, or4281
serving such tangible personal property. Except as provided in4282
section 5739.03 of the Revised Code, a construction contract4283
pursuant to which tangible personal property is or is to be4284
incorporated into a structure or improvement on and becoming a4285
part of real property is not a sale of such tangible personal4286
property. The construction contractor is the consumer of such4287
tangible personal property, provided that the sale and4288
installation of carpeting, the sale and installation of4289
agricultural land tile, the sale and erection or installation of4290
portable grain bins, or the provision of landscaping and lawn care4291
service and the transfer of property as part of such service is4292
never a construction contract. The transfer of copyrighted motion4293
picture films for exhibition purposes is not a sale, except such4294
films as are used solely for advertising purposes. Other than as4295
provided in this section, "sale" and "selling" do not include4296
transfers of interest in leased property where the original lessee4297
and the terms of the original lease agreement remain unchanged, or4298
professional, insurance, or personal service transactions that4299
involve the transfer of tangible personal property as an4300
inconsequential element, for which no separate charges are made.4301

       As used in division (B)(5) of this section:4302

       (a) "Agricultural land tile" means fired clay or concrete4303
tile, or flexible or rigid perforated plastic pipe or tubing,4304
incorporated or to be incorporated into a subsurface drainage4305
system appurtenant to land used or to be used directly in4306
production by farming, agriculture, horticulture, or floriculture.4307
The term does not include such materials when they are or are to4308
be incorporated into a drainage system appurtenant to a building4309
or structure even if the building or structure is used or to be4310
used in such production.4311

       (b) "Portable grain bin" means a structure that is used or4312
to be used by a person engaged in farming or agriculture to4313
shelter the person's grain and that is designed to be disassembled4314
without significant damage to its component parts.4315

       (6) All transactions in which all of the shares of stock of4316
a closely held corporation are transferred, if the corporation is4317
not engaging in business and its entire assets consist of boats,4318
planes, motor vehicles, or other tangible personal property4319
operated primarily for the use and enjoyment of the shareholders;4320

       (7) All transactions in which a warranty, maintenance or4321
service contract, or similar agreement by which the vendor of the4322
warranty, contract, or agreement agrees to repair or maintain the4323
tangible personal property of the consumer is or is to be4324
provided;4325

       (8) All transactions by which a prepaid authorization number4326
or a prepaid telephone calling card is or is to be transferred.4327

       (C) "Vendor" means the person providing the service or by4328
whom the transfer effected or license given by a sale is or is to4329
be made or given and, for sales described in division (B)(3)(i) of4330
this section, the telecommunications service vendor that provides4331
the nine hundred telephone service; if two or more persons are4332
engaged in business at the same place of business under a single4333
trade name in which all collections on account of sales by each4334
are made, such persons shall constitute a single vendor.4335

       Physicians, dentists, hospitals, and veterinarians who are4336
engaged in selling tangible personal property as received from4337
others, such as eyeglasses, mouthwashes, dentifrices, or similar4338
articles, are vendors. Veterinarians who are engaged in4339
transferring to others for a consideration drugs, the dispensing4340
of which does not require an order of a licensed veterinarian or4341
physician under federal law, are vendors.4342

       (D)(1) "Consumer" means the person for whom the service is4343
provided, to whom the transfer effected or license given by a sale4344
is or is to be made or given, to whom the service described in4345
division (B)(3)(f) or (i) of this section is charged, or to whom4346
the admission is granted.4347

       (2) Physicians, dentists, hospitals, and blood banks4348
operated by nonprofit institutions and persons licensed to4349
practice veterinary medicine, surgery, and dentistry are consumers4350
of all tangible personal property and services purchased by them4351
in connection with the practice of medicine, dentistry, the4352
rendition of hospital or blood bank service, or the practice of4353
veterinary medicine, surgery, and dentistry. In addition to being4354
consumers of drugs administered by them or by their assistants4355
according to their direction, veterinarians also are consumers of4356
drugs that under federal law may be dispensed only by or upon the4357
order of a licensed veterinarian or physician, when transferred by4358
them to others for a consideration to provide treatment to animals4359
as directed by the veterinarian.4360

       (3) A person who performs a facility management, or similar4361
service contract for a contractee is a consumer of all tangible4362
personal property and services purchased for use in connection4363
with the performance of such contract, regardless of whether title4364
to any such property vests in the contractee. The purchase of4365
such property and services is not subject to the exception for4366
resale under division (E)(1) of this section.4367

       (4)(a) In the case of a person who purchases printed matter4368
for the purpose of distributing it or having it distributed to the4369
public or to a designated segment of the public, free of charge,4370
that person is the consumer of that printed matter, and the4371
purchase of that printed matter for that purpose is a sale.4372

       (b) In the case of a person who produces, rather than4373
purchases, printed matter for the purpose of distributing it or4374
having it distributed to the public or to a designated segment of4375
the public, free of charge, that person is the consumer of all4376
tangible personal property and services purchased for use or4377
consumption in the production of that printed matter. That person4378
is not entitled to claim exception under division (E)(8) of this4379
section for any material incorporated into the printed matter or4380
any equipment, supplies, or services primarily used to produce the4381
printed matter.4382

       (c) The distribution of printed matter to the public or to a4383
designated segment of the public, free of charge, is not a sale to4384
the members of the public to whom the printed matter is4385
distributed or to any persons who purchase space in the printed4386
matter for advertising or other purposes.4387

       (5) A person who makes sales of any of the services listed4388
in division (B)(3) of this section is the consumer of any tangible4389
personal property used in performing the service. The purchase of4390
that property is not subject to the resale exception under4391
division (E)(1) of this section.4392

       (E) "Retail sale" and "sales at retail" include all sales4393
except those in which the purpose of the consumer is:4394

       (1) To resell the thing transferred or benefit of the4395
service provided, by a person engaging in business, in the form in4396
which the same is, or is to be, received by the person;4397

       (2) To incorporate the thing transferred as a material or a4398
part, into tangible personal property to be produced for sale by4399
manufacturing, assembling, processing, or refining, or to use or4400
consume the thing transferred directly in producing a product for4401
sale by mining, including without limitation the extraction from4402
the earth of all substances that are classed geologically as4403
minerals, production of crude oil and natural gas, farming,4404
agriculture, horticulture, or floriculture, and persons engaged in4405
rendering farming, agricultural, horticultural, or floricultural4406
services, and services in the exploration for, and production of,4407
crude oil and natural gas, for others are deemed engaged directly4408
in farming, agriculture, horticulture, and floriculture, or4409
exploration for, and production of, crude oil and natural gas;4410
directly in the rendition of a public utility service, except that4411
the sales tax levied by section 5739.02 of the Revised Code shall4412
be collected upon all meals, drinks, and food for human4413
consumption sold upon Pullman and railroad coaches. This4414
paragraph does not exempt or except from "retail sale" or "sales4415
at retail" the sale of tangible personal property that is to be4416
incorporated into a structure or improvement to real property.4417

       (3) To hold the thing transferred as security for the4418
performance of an obligation of the vendor;4419

       (4) To use or consume the thing transferred in the process4420
of reclamation as required by Chapters 1513. and 1514. of the4421
Revised Code;4422

       (5) To resell, hold, use, or consume the thing transferred4423
as evidence of a contract of insurance;4424

       (6) To use or consume the thing directly in commercial4425
fishing;4426

       (7) To incorporate the thing transferred as a material or a4427
part into, or to use or consume the thing transferred directly in4428
the production of, magazines distributed as controlled circulation4429
publications;4430

       (8) To use or consume the thing transferred in the4431
production and preparation in suitable condition for market and4432
sale of printed, imprinted, overprinted, lithographic,4433
multilithic, blueprinted, photostatic, or other productions or4434
reproductions of written or graphic matter;4435

       (9) To use the thing transferred, as described in section4436
5739.011 of the Revised Code, primarily in a manufacturing4437
operation to produce tangible personal property for sale;4438

       (10) To use the benefit of a warranty, maintenance or4439
service contract, or similar agreement, as defined in division4440
(B)(7) of this section, to repair or maintain tangible personal4441
property, if all of the property that is the subject of the4442
warranty, contract, or agreement would be exempt on its purchase4443
from the tax imposed by section 5739.02 of the Revised Code;4444

       (11) To use the thing transferred as qualified research and4445
development equipment;4446

       (12) To use or consume the thing transferred primarily in4447
storing, transporting, mailing, or otherwise handling purchased4448
sales inventory in a warehouse, distribution center, or similar4449
facility when the inventory is primarily distributed outside this4450
state to retail stores of the person who owns or controls the4451
warehouse, distribution center, or similar facility, to retail4452
stores of an affiliated group of which that person is a member, or4453
by means of direct marketing. Division (E)(12) of this section4454
does not apply to motor vehicles registered for operation on the4455
public highways. As used in division (E)(12) of this section,4456
"affiliated group" has the same meaning as in division (B)(3)(e)4457
of this section and "direct marketing" has the same meaning as in4458
division (B)(37)(36) of section 5739.02 of the Revised Code.4459

       (13) To use or consume the thing transferred to fulfill a4460
contractual obligation incurred by a warrantor pursuant to a4461
warranty provided as a part of the price of the tangible personal4462
property sold or by a vendor of a warranty, maintenance or service4463
contract, or similar agreement the provision of which is defined4464
as a sale under division (B)(7) of this section;4465

       (14) To use or consume the thing transferred in the4466
production of a newspaper for distribution to the public;4467

       (15) To use tangible personal property to perform a service4468
listed in division (B)(3) of this section, if the property is or4469
is to be permanently transferred to the consumer of the service as4470
an integral part of the performance of the service.4471

       As used in division (E) of this section, "thing" includes all4472
transactions included in divisions (B)(3)(a), (b), and (e) of this4473
section.4474

       Sales conducted through a coin-operated device that activates4475
vacuum equipment or equipment that dispenses water, whether or not4476
in combination with soap or other cleaning agents or wax, to the4477
consumer for the consumer's use on the premises in washing,4478
cleaning, or waxing a motor vehicle, provided no other personal4479
property or personal service is provided as part of the4480
transaction, are not retail sales or sales at retail.4481

       (F) "Business" includes any activity engaged in by any4482
person with the object of gain, benefit, or advantage, either4483
direct or indirect. "Business" does not include the activity of a4484
person in managing and investing the person's own funds.4485

       (G) "Engaging in business" means commencing, conducting, or4486
continuing in business, and liquidating a business when the4487
liquidator thereof holds itself out to the public as conducting4488
such business. Making a casual sale is not engaging in business.4489

       (H)(1) "Price," except as provided in divisions (H)(2) and4490
(3) of this section, means the aggregate value in money of4491
anything paid or delivered, or promised to be paid or delivered,4492
in the complete performance of a retail sale, without any4493
deduction on account of the cost of the property sold, cost of4494
materials used, labor or service cost, interest, discount paid or4495
allowed after the sale is consummated, or any other expense. If4496
the retail sale consists of the rental or lease of tangible4497
personal property, "price" means the aggregate value in money of4498
anything paid or delivered, or promised to be paid or delivered,4499
in the complete performance of the rental or lease, without any4500
deduction for tax, interest, labor or service charge, damage4501
liability waiver, termination or damage charge, discount paid or4502
allowed after the lease is consummated, or any other expense. 4503
Except as provided in division (H)(4) of this section, the sales4504
tax shall be calculated and collected by the lessor on each4505
payment made by the lessee. Price does not include the4506
consideration received as a deposit refundable to the consumer4507
upon return of a beverage container, the consideration received as4508
a deposit on a carton or case that is used for such returnable4509
containers, or the consideration received as a refundable security4510
deposit for the use of tangible personal property to the extent4511
that it actually is refunded, if the consideration for such4512
refundable deposit is separately stated from the consideration4513
received or to be received for the tangible personal property4514
transferred in the retail sale. Such separation must appear in4515
the sales agreement or on the initial invoice or initial billing4516
rendered by the vendor to the consumer. Price is the amount4517
received inclusive of the tax, provided the vendor establishes to4518
the satisfaction of the tax commissioner that the tax was added to4519
the price. When the price includes both a charge for tangible4520
personal property and a charge for providing a service and the4521
sale of the property and the charge for the service are separately4522
taxable, or have a separately determinable tax status, the price4523
shall be separately stated for each such charge so the tax can be4524
correctly computed and charged.4525

       The tax collected by the vendor from the consumer under this4526
chapter is not part of the price, but is a tax collection for the4527
benefit of the state and of counties levying an additional sales4528
tax pursuant to section 5739.021 or 5739.026 of the Revised Code4529
and of transit authorities levying an additional sales tax4530
pursuant to section 5739.023 of the Revised Code. Except for the4531
discount authorized in section 5739.12 of the Revised Code and the4532
effects of any rounding pursuant to section 5703.055 of the4533
Revised Code, no person other than the state or such a county or4534
transit authority shall derive any benefit from the collection or4535
payment of such tax.4536

       (2) In the case of a sale of any new motor vehicle by a new4537
motor vehicle dealer, as defined in section 4517.01 of the Revised4538
Code, in which another motor vehicle is accepted by the dealer as4539
part of the consideration received, "price" has the same meaning4540
as in division (H)(1) of this section, reduced by the credit4541
afforded the consumer by the dealer for the motor vehicle received4542
in trade.4543

       (3) In the case of a sale of any watercraft or outboard4544
motor by a watercraft dealer licensed in accordance with section4545
1547.543 of the Revised Code, in which another watercraft,4546
watercraft and trailer, or outboard motor is accepted by the4547
dealer as part of the consideration received, "price" has the same4548
meaning as in division (H)(1) of this section, reduced by the4549
credit afforded the consumer by the dealer for the watercraft,4550
watercraft and trailer, or outboard motor received in trade.4551

       (4) In the case of the lease of any motor vehicle designed4552
by the manufacturer to carry a load of not more than one ton,4553
watercraft, outboard motor, or aircraft, or the lease of any4554
tangible personal property, other than motor vehicles designed by4555
the manufacturer to carry a load of more than one ton, to be used4556
by the lessee primarily for business purposes, the sales tax shall4557
be collected by the vendor at the time the lease is consummated4558
and shall be calculated by the vendor on the basis of the total4559
amount to be paid by the lessee under the lease agreement. If the4560
total amount of the consideration for the lease includes amounts4561
that are not calculated at the time the lease is executed, the tax4562
shall be calculated and collected by the vendor at the time such4563
amounts are billed to the lessee. In the case of an open-end4564
lease, the sales tax shall be calculated by the vendor on the4565
basis of the total amount to be paid during the initial fixed term4566
of the lease, and then for each subsequent renewal period as it4567
comes due.4568

       As used in divisions (H)(3) and (4) of this section, "motor4569
vehicle" has the same meaning as in section 4501.01 of the Revised4570
Code, and "watercraft" includes an outdrive unit attached to the4571
watercraft.4572

       (I) "Receipts" means the total amount of the prices of the4573
sales of vendors, provided that cash discounts allowed and taken4574
on sales at the time they are consummated are not included, minus4575
any amount deducted as a bad debt pursuant to section 5739.121 of4576
the Revised Code. "Receipts" does not include the sale price of4577
property returned or services rejected by consumers when the full4578
sale price and tax are refunded either in cash or by credit.4579

       (J) "Place of business" means any location at which a person4580
engages in business.4581

       (K) "Premises" includes any real property or portion thereof4582
upon which any person engages in selling tangible personal4583
property at retail or making retail sales and also includes any4584
real property or portion thereof designated for, or devoted to,4585
use in conjunction with the business engaged in by such person.4586

       (L) "Casual sale" means a sale of an item of tangible4587
personal property that was obtained by the person making the4588
sale, through purchase or otherwise, for the person's own use in4589
this state and was previously subject to any state's taxing4590
jurisdiction on its sale or use, and includes such items acquired4591
for the seller's use that are sold by an auctioneer employed4592
directly by the person for such purpose, provided the location of4593
such sales is not the auctioneer's permanent place of business. As4594
used in this division, "permanent place of business" includes any4595
location where such auctioneer has conducted more than two4596
auctions during the year.4597

       (M) "Hotel" means every establishment kept, used,4598
maintained, advertised, or held out to the public to be a place4599
where sleeping accommodations are offered to guests, in which five4600
or more rooms are used for the accommodation of such guests,4601
whether the rooms are in one or several structures.4602

       (N) "Transient guests" means persons occupying a room or4603
rooms for sleeping accommodations for less than thirty consecutive4604
days.4605

       (O) "Making retail sales" means the effecting of4606
transactions wherein one party is obligated to pay the price and4607
the other party is obligated to provide a service or to transfer4608
title to or possession of the item sold. "Making retail sales"4609
does not include the preliminary acts of promoting or soliciting4610
the retail sales, other than the distribution of printed matter4611
which displays or describes and prices the item offered for sale,4612
nor does it include delivery of a predetermined quantity of4613
tangible personal property or transportation of property or4614
personnel to or from a place where a service is performed,4615
regardless of whether the vendor is a delivery vendor.4616

       (P) "Used directly in the rendition of a public utility4617
service" means that property which is to be incorporated into and4618
will become a part of the consumer's production, transmission,4619
transportation, or distribution system and that retains its4620
classification as tangible personal property after such4621
incorporation; fuel or power used in the production, transmission,4622
transportation, or distribution system; and tangible personal4623
property used in the repair and maintenance of the production,4624
transmission, transportation, or distribution system, including4625
only such motor vehicles as are specially designed and equipped4626
for such use. Tangible personal property and services used4627
primarily in providing highway transportation for hire are not4628
used in providing a public utility service as defined in this4629
division.4630

       (Q) "Refining" means removing or separating a desirable4631
product from raw or contaminated materials by distillation or4632
physical, mechanical, or chemical processes.4633

       (R) "Assembly" and "assembling" mean attaching or fitting4634
together parts to form a product, but do not include packaging a4635
product.4636

       (S) "Manufacturing operation" means a process in which4637
materials are changed, converted, or transformed into a different4638
state or form from which they previously existed and includes4639
refining materials, assembling parts, and preparing raw materials4640
and parts by mixing, measuring, blending, or otherwise committing4641
such materials or parts to the manufacturing process.4642
"Manufacturing operation" does not include packaging.4643

       (T) "Fiscal officer" means, with respect to a regional4644
transit authority, the secretary-treasurer thereof, and with4645
respect to a county that is a transit authority, the fiscal4646
officer of the county transit board if one is appointed pursuant4647
to section 306.03 of the Revised Code or the county auditor if the4648
board of county commissioners operates the county transit system.4649

       (U) "Transit authority" means a regional transit authority4650
created pursuant to section 306.31 of the Revised Code or a county4651
in which a county transit system is created pursuant to section4652
306.01 of the Revised Code. For the purposes of this chapter, a4653
transit authority must extend to at least the entire area of a4654
single county. A transit authority that includes territory in4655
more than one county must include all the area of the most4656
populous county that is a part of such transit authority. County4657
population shall be measured by the most recent census taken by4658
the United States census bureau.4659

       (V) "Legislative authority" means, with respect to a4660
regional transit authority, the board of trustees thereof, and4661
with respect to a county that is a transit authority, the board4662
of county commissioners.4663

       (W) "Territory of the transit authority" means all of the4664
area included within the territorial boundaries of a transit4665
authority as they from time to time exist. Such territorial4666
boundaries must at all times include all the area of a single4667
county or all the area of the most populous county that is a part4668
of such transit authority. County population shall be measured by4669
the most recent census taken by the United States census bureau.4670

       (X) "Providing a service" means providing or furnishing4671
anything described in division (B)(3) of this section for4672
consideration.4673

       (Y)(1)(a) "Automatic data processing" means processing of4674
others' data, including keypunching or similar data entry services4675
together with verification thereof, or providing access to4676
computer equipment for the purpose of processing data.4677

       (b) "Computer services" means providing services consisting4678
of specifying computer hardware configurations and evaluating4679
technical processing characteristics, computer programming, and4680
training of computer programmers and operators, provided in4681
conjunction with and to support the sale, lease, or operation of4682
taxable computer equipment or systems.4683

       (c) "Electronic information services" means providing access4684
to computer equipment by means of telecommunications equipment for4685
the purpose of either of the following:4686

       (i) Examining or acquiring data stored in or accessible to4687
the computer equipment;4688

       (ii) Placing data into the computer equipment to be4689
retrieved by designated recipients with access to the computer4690
equipment.4691

       (d) "Automatic data processing, computer services, or4692
electronic information services" shall not include personal or4693
professional services.4694

       (2) As used in divisions (B)(3)(e) and (Y)(1) of this4695
section, "personal and professional services" means all services4696
other than automatic data processing, computer services, or4697
electronic information services, including but not limited to:4698

       (a) Accounting and legal services such as advice on tax4699
matters, asset management, budgetary matters, quality control,4700
information security, and auditing and any other situation where4701
the service provider receives data or information and studies,4702
alters, analyzes, interprets, or adjusts such material;4703

       (b) Analyzing business policies and procedures;4704

       (c) Identifying management information needs;4705

       (d) Feasibility studies, including economic and technical4706
analysis of existing or potential computer hardware or software4707
needs and alternatives;4708

       (e) Designing policies, procedures, and custom software for4709
collecting business information, and determining how data should4710
be summarized, sequenced, formatted, processed, controlled, and4711
reported so that it will be meaningful to management;4712

       (f) Developing policies and procedures that document how4713
business events and transactions are to be authorized, executed,4714
and controlled;4715

       (g) Testing of business procedures;4716

       (h) Training personnel in business procedure applications;4717

       (i) Providing credit information to users of such4718
information by a consumer reporting agency, as defined in the4719
"Fair Credit Reporting Act," 84 Stat. 1114, 1129 (1970), 15 U.S.C.4720
1681a(f), or as hereafter amended, including but not limited to4721
gathering, organizing, analyzing, recording, and furnishing such4722
information by any oral, written, graphic, or electronic medium;4723

       (j) Providing debt collection services by any oral, written,4724
graphic, or electronic means.4725

       The services listed in divisions (Y)(2)(a) to (j) of this4726
section are not automatic data processing or computer services.4727

       (Z) "Highway transportation for hire" means the4728
transportation of personal property belonging to others for4729
consideration by any of the following:4730

       (1) The holder of a permit or certificate issued by this4731
state or the United States authorizing the holder to engage in4732
transportation of personal property belonging to others for4733
consideration over or on highways, roadways, streets, or any4734
similar public thoroughfare;4735

       (2) A person who engages in the transportation of personal4736
property belonging to others for consideration over or on4737
highways, roadways, streets, or any similar public thoroughfare4738
but who could not have engaged in such transportation on December4739
11, 1985, unless the person was the holder of a permit or4740
certificate of the types described in division (Z)(1) of this4741
section;4742

       (3) A person who leases a motor vehicle to and operates it4743
for a person described by division (Z)(1) or (2) of this section.4744

       (AA) "Telecommunications service" means the transmission of4745
any interactive, two-way electromagnetic communications, including4746
voice, image, data, and information, through the use of any medium4747
such as wires, cables, microwaves, cellular radio, radio waves,4748
light waves, or any combination of those or similar media.4749
"Telecommunications service" includes message toll service even4750
though the vendor provides the message toll service by means of4751
wide area transmission type service or private communications4752
service purchased from another telecommunications service4753
provider, but does not include any of the following:4754

       (1) Sales of incoming or outgoing wide area transmission4755
service or wide area transmission type service, including eight4756
hundred or eight-hundred-type service, to the person contracting4757
for the receipt of that service;4758

       (2) Sales of private communications service to the person4759
contracting for the receipt of that service that entitles the4760
purchaser to exclusive or priority use of a communications channel4761
or group of channels between exchanges;4762

       (3) Sales of telecommunications service by companies subject4763
to the excise tax imposed by Chapter 5727. of the Revised Code;4764

       (4) Sales of telecommunications service to a provider of4765
telecommunications service, including access services, for use in4766
providing telecommunications service;4767

       (5) Value-added nonvoice services in which computer4768
processing applications are used to act on the form, content,4769
code, or protocol of the information to be transmitted;4770

       (6) Transmission of interactive video programming by a cable4771
television system as defined in section 505.90 of the Revised4772
Code;4773

       (7) After July 31, 2002, mobile telecommunications service.4774

       (BB) "Industrial laundry cleaning services" means removing4775
soil or dirt from or supplying towels, linens, or articles of4776
clothing that belong to others and are used in a trade or4777
business.4778

       (CC) "Magazines distributed as controlled circulation4779
publications" means magazines containing at least twenty-four4780
pages, at least twenty-five per cent editorial content, issued at4781
regular intervals four or more times a year, and circulated4782
without charge to the recipient, provided that such magazines are4783
not owned or controlled by individuals or business concerns which4784
conduct such publications as an auxiliary to, and essentially for4785
the advancement of the main business or calling of, those who own4786
or control them.4787

       (DD) "Landscaping and lawn care service" means the services4788
of planting, seeding, sodding, removing, cutting, trimming,4789
pruning, mulching, aerating, applying chemicals, watering,4790
fertilizing, and providing similar services to establish, promote,4791
or control the growth of trees, shrubs, flowers, grass, ground4792
cover, and other flora, or otherwise maintaining a lawn or4793
landscape grown or maintained by the owner for ornamentation or4794
other nonagricultural purpose. However, "landscaping and lawn4795
care service" does not include the providing of such services by a4796
person who has less than five thousand dollars in sales of such4797
services during the calendar year.4798

       (EE) "Private investigation and security service" means the4799
performance of any activity for which the provider of such service4800
is required to be licensed pursuant to Chapter 4749. of the4801
Revised Code, or would be required to be so licensed in performing4802
such services in this state, and also includes the services of4803
conducting polygraph examinations and of monitoring or overseeing4804
the activities on or in, or the condition of, the consumer's home,4805
business, or other facility by means of electronic or similar4806
monitoring devices. "Private investigation and security service"4807
does not include special duty services provided by off-duty police4808
officers, deputy sheriffs, and other peace officers regularly4809
employed by the state or a political subdivision.4810

       (FF) "Information services" means providing conversation,4811
giving consultation or advice, playing or making a voice or other4812
recording, making or keeping a record of the number of callers,4813
and any other service provided to a consumer by means of a nine4814
hundred telephone call, except when the nine hundred telephone4815
call is the means by which the consumer makes a contribution to a4816
recognized charity.4817

       (GG) "Research and development" means designing, creating,4818
or formulating new or enhanced products, equipment, or4819
manufacturing processes, and also means conducting scientific or4820
technological inquiry and experimentation in the physical sciences4821
with the goal of increasing scientific knowledge which may reveal4822
the bases for new or enhanced products, equipment, or4823
manufacturing processes.4824

       (HH) "Qualified research and development equipment" means4825
capitalized tangible personal property, and leased personal4826
property that would be capitalized if purchased, used by a person4827
primarily to perform research and development. Tangible personal4828
property primarily used in testing, as defined in division (A)(4)4829
of section 5739.011 of the Revised Code, or used for recording or4830
storing test results, is not qualified research and development4831
equipment unless such property is primarily used by the consumer4832
in testing the product, equipment, or manufacturing process being4833
created, designed, or formulated by the consumer in the research4834
and development activity or in recording or storing such test4835
results.4836

       (II) "Building maintenance and janitorial service" means4837
cleaning the interior or exterior of a building and any tangible4838
personal property located therein or thereon, including any4839
services incidental to such cleaning for which no separate charge4840
is made. However, "building maintenance and janitorial service"4841
does not include the providing of such service by a person who has4842
less than five thousand dollars in sales of such service during4843
the calendar year.4844

       (JJ) "Employment service" means providing or supplying4845
personnel, on a temporary or long-term basis, to perform work or4846
labor under the supervision or control of another, when the4847
personnel so supplied receive their wages, salary, or other4848
compensation from the provider of the service. "Employment4849
service" does not include:4850

       (1) Acting as a contractor or subcontractor, where the4851
personnel performing the work are not under the direct control of4852
the purchaser.4853

       (2) Medical and health care services.4854

       (3) Supplying personnel to a purchaser pursuant to a4855
contract of at least one year between the service provider and the4856
purchaser that specifies that each employee covered under the4857
contract is assigned to the purchaser on a permanent basis.4858

       (4) Transactions between members of an affiliated group, as4859
defined in division (B)(3)(e) of this section.4860

       (KK) "Employment placement service" means locating or4861
finding employment for a person or finding or locating an employee4862
to fill an available position.4863

       (LL) "Exterminating service" means eradicating or attempting4864
to eradicate vermin infestations from a building or structure, or4865
the area surrounding a building or structure, and includes4866
activities to inspect, detect, or prevent vermin infestation of a4867
building or structure.4868

       (MM) "Physical fitness facility service" means all4869
transactions by which a membership is granted, maintained, or4870
renewed, including initiation fees, membership dues, renewal fees,4871
monthly minimum fees, and other similar fees and dues, by a4872
physical fitness facility such as an athletic club, health spa, or4873
gymnasium, which entitles the member to use the facility for4874
physical exercise.4875

       (NN) "Recreation and sports club service" means all4876
transactions by which a membership is granted, maintained, or4877
renewed, including initiation fees, membership dues, renewal fees,4878
monthly minimum fees, and other similar fees and dues, by a4879
recreation and sports club, which entitles the member to use the4880
facilities of the organization. "Recreation and sports club"4881
means an organization that has ownership of, or controls or leases4882
on a continuing, long-term basis, the facilities used by its4883
members and includes an aviation club, gun or shooting club, yacht4884
club, card club, swimming club, tennis club, golf club, country4885
club, riding club, amateur sports club, or similar organization.4886

       (OO) "Livestock" means farm animals commonly raised for food4887
or food production, and includes but is not limited to cattle,4888
sheep, goats, swine, and poultry. "Livestock" does not include4889
invertebrates, fish, amphibians, reptiles, horses, domestic pets,4890
animals for use in laboratories or for exhibition, or other4891
animals not commonly raised for food or food production.4892

       (PP) "Livestock structure" means a building or structure4893
used exclusively for the housing, raising, feeding, or sheltering4894
of livestock, and includes feed storage or handling structures and4895
structures for livestock waste handling.4896

       (QQ) "Horticulture" means the growing, cultivation, and4897
production of flowers, fruits, herbs, vegetables, sod, mushrooms,4898
and nursery stock. As used in this division, "nursery stock" has4899
the same meaning as in section 927.51 of the Revised Code.4900

       (RR) "Horticulture structure" means a building or structure4901
used exclusively for the commercial growing, raising, or4902
overwintering of horticultural products, and includes the area4903
used for stocking, storing, and packing horticultural products4904
when done in conjunction with the production of those products.4905

       (SS) "Newspaper" means an unbound publication bearing a4906
title or name that is regularly published, at least as frequently4907
as biweekly, and distributed from a fixed place of business to the4908
public in a specific geographic area, and that contains a4909
substantial amount of news matter of international, national, or4910
local events of interest to the general public.4911

       (TT) "Professional racing team" means a person that employs4912
at least twenty full-time employees for the purpose of conducting4913
a motor vehicle racing business for profit. The person must4914
conduct the business with the purpose of racing one or more motor4915
racing vehicles in at least ten competitive professional racing4916
events each year that comprise all or part of a motor racing4917
series sanctioned by one or more motor racing sanctioning4918
organizations. A "motor racing vehicle" means a vehicle for which4919
the chassis, engine, and parts are designed exclusively for motor4920
racing, and does not include a stock or production model vehicle4921
that may be modified for use in racing. For the purposes of this4922
division:4923

       (1) A "competitive professional racing event" is a motor4924
vehicle racing event sanctioned by one or more motor racing4925
sanctioning organizations, at which aggregate cash prizes in4926
excess of eight hundred thousand dollars are awarded to the4927
competitors.4928

       (2) "Full-time employee" means an individual who is employed4929
for consideration for thirty-five or more hours a week, or who4930
renders any other standard of service generally accepted by custom4931
or specified by contract as full-time employment.4932

       (UU)(1) "Prepaid authorization number" means a numeric or4933
alphanumeric combination that represents a prepaid account that4934
can be used by the account holder solely to obtain4935
telecommunications service, and includes any renewals or increases4936
in the prepaid account.4937

       (2) "Prepaid telephone calling card" means a tangible item4938
that contains a prepaid authorization number that can be used4939
solely to obtain telecommunications service, and includes any4940
renewals or increases in the prepaid account.4941

       (VV) "Lease" means any transfer for a consideration of the4942
possession of and right to use, but not title to, tangible4943
personal property for a fixed period of time greater than4944
twenty-eight days or for an open-ended period of time with a4945
minimum fixed period of more than twenty-eight days.4946

       (WW) "Mobile telecommunications service" has the same4947
meaning as in the "Mobile Telecommunications Sourcing Act," Pub.4948
L. No. 106-252, 114 Stat. 631 (2000), 4 U.S.C.A. 124 (7), as4949
amended.4950

       Sec. 5739.011.  (A) As used in this section:4951

       (1) "Manufacturer" means a person who is engaged in4952
manufacturing, processing, assembling, or refining a product for4953
sale.4954

       (2) "Manufacturing facility" means a single location where a4955
manufacturing operation is conducted, including locations4956
consisting of one or more buildings or structures in a contiguous4957
area owned or controlled by the manufacturer.4958

       (3) "Materials handling" means the movement of the product4959
being or to be manufactured, during which movement the product is4960
not undergoing any substantial change or alteration in its state4961
or form.4962

       (4) "Testing" means a process or procedure to identify the4963
properties or assure the quality of a material or product.4964

       (5) "Completed product" means a manufactured item that is in4965
the form and condition as it will be sold by the manufacturer. An4966
item is completed when all processes that change or alter its4967
state or form or enhance its value are finished, even though the4968
item subsequently will be tested to ensure its quality or be4969
packaged for storage or shipment.4970

       (6) "Continuous manufacturing operation" means the process in4971
which raw materials or components are moved through the steps4972
whereby manufacturing occurs. Materials handling of raw materials4973
or parts from the point of receipt or preproduction storage or of4974
a completed product, to or from storage, to or from packaging, or4975
to the place from which the completed product will be shipped, is4976
not a part of a continuous manufacturing operation.4977

       (B) For purposes of division (E)(9) of section 5739.01 of4978
the Revised Code, the "thing transferred" includes, but is not4979
limited to, any of the following:4980

       (1) Production machinery and equipment that act upon the4981
product or machinery and equipment that treat the materials or4982
parts in preparation for the manufacturing operation;4983

       (2) Materials handling equipment that moves the product4984
through a continuous manufacturing operation; equipment that4985
temporarily stores the product during the manufacturing operation;4986
or, excluding motor vehicles licensed to operate on public4987
highways, equipment used in intraplant or interplant transfers of4988
work in process where the plant or plants between which such4989
transfers occur are manufacturing facilities operated by the same4990
person;4991

       (3) Catalysts, solvents, water, acids, oil, and similar4992
consumables that interact with the product and that are an4993
integral part of the manufacturing operation;4994

       (4) Machinery, equipment, and other tangible personal4995
property used during the manufacturing operation that control,4996
physically support, produce power for, lubricate, or are otherwise4997
necessary for the functioning of production machinery and4998
equipment and the continuation of the manufacturing operation;4999

       (5) Machinery, equipment, fuel, power, material, parts, and5000
other tangible personal property used to manufacture machinery,5001
equipment, or other tangible personal property used in5002
manufacturing a product for sale;5003

       (6) Machinery, equipment, and other tangible personal5004
property used by a manufacturer to test raw materials, the product5005
being manufactured, or the completed product;5006

       (7) Machinery and equipment used to handle or temporarily5007
store scrap that is intended to be reused in the manufacturing5008
operation at the same manufacturing facility;5009

       (8) Coke, gas, water, steam, and similar substances used in5010
the manufacturing operation; machinery and equipment used for, and5011
fuel consumed in, producing or extracting those substances;5012
machinery, equipment, and other tangible personal property used to5013
treat, filter, pump, or otherwise make the substance suitable for5014
use in the manufacturing operation; and machinery and equipment5015
used to producefor, and fuel consumed in, producing electricity5016
for use in the manufacturing operation;5017

       (9) Machinery, equipment, and other tangible personal5018
property used to transport or transmit electricity, coke, gas,5019
water, steam, or similar substances used in the manufacturing5020
operation from the point of generation, if produced by the5021
manufacturer, or from the point where the substance enters the5022
manufacturing facility, if purchased by the manufacturer, to the5023
manufacturing operation;5024

       (10) Machinery, equipment, and other tangible personal5025
property that treats, filters, cools, refines, or otherwise5026
renders water, steam, acid, oil, solvents, or similar substances5027
used in the manufacturing operation reusable, provided that the5028
substances are intended for reuse and not for disposal, sale, or5029
transportation from the manufacturing facility;5030

       (11) Parts, components, and repair and installation services5031
for items described in division (B) of this section.5032

       (C) For purposes of division (E)(9) of section 5739.01 of5033
the Revised Code, the "thing transferred" does not include any of5034
the following:5035

       (1) Tangible personal property used in administrative,5036
personnel, security, inventory control, record-keeping, ordering,5037
billing, or similar functions;5038

       (2) Tangible personal property used in storing raw materials5039
or parts prior to the commencement of the manufacturing operation5040
or used to handle or store a completed product, including storage5041
that actively maintains a completed product in a marketable state5042
or form;5043

       (3) Tangible personal property used to handle or store scrap5044
or waste intended for disposal, sale, or other disposition, other5045
than reuse in the manufacturing operation at the same5046
manufacturing facility;5047

       (4) Tangible personal property that is or is to be5048
incorporated into realty;5049

       (5) Machinery, equipment, and other tangible personal5050
property used for ventilation, dust or gas collection, humidity or5051
temperature regulation, or similar environmental control, except5052
machinery, equipment, and other tangible personal property that5053
totally regulates the environment in a special and limited area of5054
the manufacturing facility where the regulation is essential for5055
production to occur;5056

       (6) Tangible personal property used for the protection and5057
safety of workers, unless the property is attached to or5058
incorporated into machinery and equipment used in a continuous5059
manufacturing operation;5060

       (7) Tangible personal property used to store fuel, water,5061
solvents, acid, oil, or similar items consumed in the5062
manufacturing operation;5063

       (8) Machinery, equipment, and other tangible personal5064
property used for research and development;5065

       (9) Machinery, equipment, and other tangible personal5066
property used to clean, repair, or maintain real or personal5067
property in the manufacturing facility;5068

       (10)(9) Motor vehicles registered for operation on the5069
public highways.5070

       (D) For purposes of division (E)(9) of section 5739.01 of5071
the Revised Code, if the "thing transferred" is a machine used by5072
a manufacturer in both a taxable and an exempt manner, it shall be5073
totally taxable or totally exempt from taxation based upon its5074
quantified primary use. If the "things transferred" are5075
fungibles, they shall be taxed based upon the proportion of the5076
fungibles used in a taxable manner.5077

       Sec. 5739.02.  For the purpose of providing revenue with5078
which to meet the needs of the state, for the use of the general5079
revenue fund of the state, for the purpose of securing a thorough5080
and efficient system of common schools throughout the state, for5081
the purpose of affording revenues, in addition to those from5082
general property taxes, permitted under constitutional5083
limitations, and from other sources, for the support of local5084
governmental functions, and for the purpose of reimbursing the5085
state for the expense of administering this chapter, an excise tax5086
is hereby levied on each retail sale made in this state.5087

       (A) The tax shall be collected pursuant to the schedules in5088
section 5739.025 of the Revised Code.5089

       The tax applies and is collectible when the sale is made,5090
regardless of the time when the price is paid or delivered.5091

       In the case of a sale, the price of which consists in whole5092
or in part of rentals for the use of the thing transferred, the5093
tax, as regards such rentals, shall be measured by the5094
installments thereof.5095

       In the case of a sale of a service defined under division5096
(MM) or (NN) of section 5739.01 of the Revised Code, the price of5097
which consists in whole or in part of a membership for the receipt5098
of the benefit of the service, the tax applicable to the sale5099
shall be measured by the installments thereof.5100

       (B) The tax does not apply to the following:5101

       (1) Sales to the state or any of its political subdivisions,5102
or to any other state or its political subdivisions if the laws of5103
that state exempt from taxation sales made to this state and its5104
political subdivisions;5105

       (2) Sales of food for human consumption off the premises5106
where sold;5107

       (3) Sales of food sold to students only in a cafeteria,5108
dormitory, fraternity, or sorority maintained in a private,5109
public, or parochial school, college, or university;5110

       (4) Sales of newspapers, and of magazine subscriptions5111
shipped by second class mail, and sales or transfers of magazines5112
distributed as controlled circulation publications;5113

       (5) The furnishing, preparing, or serving of meals without5114
charge by an employer to an employee provided the employer records5115
the meals as part compensation for services performed or work5116
done;5117

       (6) Sales of motor fuel upon receipt, use, distribution, or5118
sale of which in this state a tax is imposed by the law of this5119
state, but this exemption shall not apply to the sale of motor5120
fuel on which a refund of the tax is allowable under section5121
5735.14 of the Revised Code; and the tax commissioner may deduct5122
the amount of tax levied by this section applicable to the price5123
of motor fuel when granting a refund of motor fuel tax pursuant to5124
section 5735.14 of the Revised Code and shall cause the amount5125
deducted to be paid into the general revenue fund of this state;5126

       (7) Sales of natural gas by a natural gas company, of water5127
by a water-works company, or of steam by a heating company, if in5128
each case the thing sold is delivered to consumers through pipes5129
or conduits, and all sales of communications services by a5130
telephone or telegraph company, all terms as defined in section5131
5727.01 of the Revised Code;5132

       (8) Casual sales by a person, or auctioneer employed5133
directly by the person to conduct such sales, except as to such5134
sales of motor vehicles, watercraft or outboard motors required to5135
be titled under section 1548.06 of the Revised Code, watercraft5136
documented with the United States coast guard, snowmobiles, and5137
all-purpose vehicles as defined in section 4519.01 of the Revised5138
Code;5139

       (9) Sales of services or tangible personal property, other5140
than motor vehicles, mobile homes, and manufactured homes, by5141
churches, organizations exempt from taxation under section5142
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit5143
organizations operated exclusively for charitable purposes as5144
defined in division (B)(12) of this section, provided that the5145
number of days on which such tangible personal property or5146
services, other than items never subject to the tax, are sold does5147
not exceed six in any calendar year. If the number of days on5148
which such sales are made exceeds six in any calendar year, the5149
church or organization shall be considered to be engaged in5150
business and all subsequent sales by it shall be subject to the5151
tax. In counting the number of days, all sales by groups within a5152
church or within an organization shall be considered to be sales5153
of that church or organization, except that sales made by separate5154
student clubs and other groups of students of a primary or5155
secondary school, and sales made by a parent-teacher association,5156
booster group, or similar organization that raises money to5157
support or fund curricular or extracurricular activities of a5158
primary or secondary school, shall not be considered to be sales5159
of such school, and sales by each such club, group, association,5160
or organization shall be counted separately for purposes of the5161
six-day limitation. This division does not apply to sales by a5162
noncommercial educational radio or television broadcasting5163
station.5164

       (10) Sales not within the taxing power of this state under5165
the Constitution of the United States;5166

       (11) The transportation of persons or property, unless the5167
transportation is by a private investigation and security service;5168

       (12) Sales of tangible personal property or services to5169
churches, to organizations exempt from taxation under section5170
501(c)(3) of the Internal Revenue Code of 1986, and to any other5171
nonprofit organizations operated exclusively for charitable5172
purposes in this state, no part of the net income of which inures5173
to the benefit of any private shareholder or individual, and no5174
substantial part of the activities of which consists of carrying5175
on propaganda or otherwise attempting to influence legislation;5176
sales to offices administering one or more homes for the aged or5177
one or more hospital facilities exempt under section 140.08 of the5178
Revised Code; and sales to organizations described in division (D)5179
of section 5709.12 of the Revised Code.5180

       "Charitable purposes" means the relief of poverty; the5181
improvement of health through the alleviation of illness, disease,5182
or injury; the operation of an organization exclusively for the5183
provision of professional, laundry, printing, and purchasing5184
services to hospitals or charitable institutions; the operation of5185
a home for the aged, as defined in section 5701.13 of the Revised5186
Code; the operation of a radio or television broadcasting station5187
that is licensed by the federal communications commission as a5188
noncommercial educational radio or television station; the5189
operation of a nonprofit animal adoption service or a county5190
humane society; the promotion of education by an institution of5191
learning that maintains a faculty of qualified instructors,5192
teaches regular continuous courses of study, and confers a5193
recognized diploma upon completion of a specific curriculum; the5194
operation of a parent-teacher association, booster group, or5195
similar organization primarily engaged in the promotion and5196
support of the curricular or extracurricular activities of a5197
primary or secondary school; the operation of a community or area5198
center in which presentations in music, dramatics, the arts, and5199
related fields are made in order to foster public interest and5200
education therein; the production of performances in music,5201
dramatics, and the arts; or the promotion of education by an5202
organization engaged in carrying on research in, or the5203
dissemination of, scientific and technological knowledge and5204
information primarily for the public.5205

       Nothing in this division shall be deemed to exempt sales to5206
any organization for use in the operation or carrying on of a5207
trade or business, or sales to a home for the aged for use in the5208
operation of independent living facilities as defined in division5209
(A) of section 5709.12 of the Revised Code.5210

       (13) Building and construction materials and services sold5211
to construction contractors for incorporation into a structure or5212
improvement to real property under a construction contract with5213
this state or a political subdivision thereof, or with the United5214
States government or any of its agencies; building and5215
construction materials and services sold to construction5216
contractors for incorporation into a structure or improvement to5217
real property that are accepted for ownership by this state or any5218
of its political subdivisions, or by the United States government5219
or any of its agencies at the time of completion of such5220
structures or improvements; building and construction materials5221
sold to construction contractors for incorporation into a5222
horticulture structure or livestock structure for a person engaged5223
in the business of horticulture or producing livestock; building5224
materials and services sold to a construction contractor for5225
incorporation into a house of public worship or religious5226
education, or a building used exclusively for charitable purposes5227
under a construction contract with an organization whose purpose5228
is as described in division (B)(12) of this section; building5229
materials and services sold to a construction contractor for5230
incorporation into a building under a construction contract with5231
an organization exempt from taxation under section 501(c)(3) of5232
the Internal Revenue Code of 1986 when the building is to be used5233
exclusively for the organization's exempt purposes; building and5234
construction materials sold for incorporation into the original5235
construction of a sports facility under section 307.696 of the5236
Revised Code; and building and construction materials and services5237
sold to a construction contractor for incorporation into real5238
property outside this state if such materials and services, when5239
sold to a construction contractor in the state in which the real5240
property is located for incorporation into real property in that5241
state, would be exempt from a tax on sales levied by that state;5242

       (14) Sales of ships or vessels or rail rolling stock used or5243
to be used principally in interstate or foreign commerce, and5244
repairs, alterations, fuel, and lubricants for such ships or5245
vessels or rail rolling stock;5246

       (15) Sales to persons engaged in any of the activities5247
mentioned in division (E)(2) or (9) of section 5739.01 of the5248
Revised Code, to persons engaged in making retail sales, or to5249
persons who purchase for sale from a manufacturer tangible5250
personal property that was produced by the manufacturer in5251
accordance with specific designs provided by the purchaser, of5252
packages, including material, labels, and parts for packages, and5253
of machinery, equipment, and material for use primarily in5254
packaging tangible personal property produced for sale, including5255
any machinery, equipment, and supplies used to make labels or5256
packages, to prepare packages or products for labeling, or to5257
label packages or products, by or on the order of the person doing5258
the packaging, or sold at retail. "Packages" includes bags,5259
baskets, cartons, crates, boxes, cans, bottles, bindings,5260
wrappings, and other similar devices and containers, and5261
"packaging" means placing therein.5262

       (16) Sales of food to persons using food stamp benefits to5263
purchase the food. As used in division (B)(16) of this section,5264
"food" has the same meaning as in the "Food Stamp Act of 1977," 915265
Stat. 958, 7 U.S.C. 2012, as amended, and federal regulations5266
adopted pursuant to that act.5267

       (17) Sales to persons engaged in farming, agriculture,5268
horticulture, or floriculture, of tangible personal property for5269
use or consumption directly in the production by farming,5270
agriculture, horticulture, or floriculture of other tangible5271
personal property for use or consumption directly in the5272
production of tangible personal property for sale by farming,5273
agriculture, horticulture, or floriculture; or material and parts5274
for incorporation into any such tangible personal property for use5275
or consumption in production; and of tangible personal property5276
for such use or consumption in the conditioning or holding of5277
products produced by and for such use, consumption, or sale by5278
persons engaged in farming, agriculture, horticulture, or5279
floriculture, except where such property is incorporated into real5280
property;5281

       (18) Sales of drugs dispensed by a licensed pharmacist upon5282
the order of a licensed health professional authorized to5283
prescribe drugs to a human being, as the term "licensed health5284
professional authorized to prescribe drugs" is defined in section5285
4729.01 of the Revised Code; insulin as recognized in the official5286
United States pharmacopoeia; urine and blood testing materials5287
when used by diabetics or persons with hypoglycemia to test for5288
glucose or acetone; hypodermic syringes and needles when used by5289
diabetics for insulin injections; epoetin alfa when purchased for5290
use in the treatment of persons with end-stage renal disease;5291
hospital beds when purchased for use by persons with medical5292