As Reported by the Senate Ways and Means and Economic Development Committee

125th General Assembly
Regular Session
2003-2004
Sub. S. B. No. 37


Senator Blessing 



A BILL
To amend sections 165.09, 902.11, 2915.01, 4505.06,1
4981.20, 5739.01, 5739.02, 5739.03, 5739.11, and2
5741.02 of the Revised Code to clarify who pays 3
the sales or use tax on packaging material used in4
highway transportation for hire and to clarify 5
when the transfer of motion picture films is a 6
sale.7


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

       Section 1. That sections 165.09, 902.11, 2915.01, 4505.06,8
4981.20, 5739.01, 5739.02, 5739.03, 5739.11, and 5741.02 of the9
Revised Code be amended to read as follows:10

       Sec. 165.09.  Any real or personal property, or both, of an11
issuer whichthat is acquired, constructed, reconstructed,12
enlarged, improved, furnished or equipped, or any combination13
thereof, and leased or subleased under authority of either Chapter14
165. or 761. of the Revised Code shall be subject to ad valorem,15
sales, use, and franchise taxes and to zoning, planning, and16
building regulations and fees, to the same extent and in the same17
manner as if the lessee-user or sublessee-user thereof, rather18
than the issuer, had acquired, constructed, reconstructed,19
enlarged, improved, furnished, or equipped, or any combination20
thereof, such real or personal property, and title thereto was in21
the name of such lessee-user or sublessee-user.22

       The transfer of tangible personal property by lease or23
sublease under authority of either Chapter 165. or 761. of the24
Revised Code is not a sale as used in Chapter 5739. of the Revised25
Code. The exemptions provided in divisions (B)(1) and (B)(14)(12)26
of section 5739.02 of the Revised Code shall not be applicable to27
purchases for a project under either Chapters 165. or 761. of the28
Revised Code.29

       An issuer shall be exempt from all taxes on its real or30
personal property, or both, whichthat has been acquired,31
constructed, reconstructed, enlarged, improved, furnished, or32
equipped, or any combination thereof, under Chapter 165. or 761.33
of the Revised Code, so long as such property is used by the34
issuer for purposes whichthat would otherwise exempt such35
property; has ceased to be used by a former lessee-user or36
sublessee-user and is not occupied or used; or has been acquired37
by the issuer, but development has not yet commenced. The38
exemption shall be effective as of the date the exempt use begins.39
All taxes on the exempt real or personal property for the year40
should be prorated and the taxes for the exempt portion of the41
year shall be remitted by the county auditor.42

       Sec. 902.11.  (A) Any real or personal property, or both, of43
an issuer whichthat is acquired, constructed, reconstructed,44
enlarged, improved, furnished, or equipped, or any combination45
thereof, and leased or subleased under authority of this chapter46
shall be subject to ad valorem, sales, use, and franchise taxes47
and to zoning, planning, and building regulations and fees, to the48
same extent and in the same manner as if the lessee-user or49
sublessee-user thereof, rather than the issuer, had acquired,50
constructed, reconstructed, enlarged, improved, furnished, or51
equipped, or any combination thereof, such real or personal52
property, and title thereto was in the name of such lessee-user or53
sublessee-user.54

       The transfer of tangible personal property by lease or55
sublease under authority of this chapter is not a sale as used in56
Chapter 5739. of the Revised Code. The exemptions provided in57
divisions (B)(1) and (14)(12) of section 5739.02 of the Revised58
Code shall not be applicable to purchases for a project under this59
chapter.60

       An issuer shall be exempt from all taxes on its real or61
personal property, or both, whichthat has been acquired,62
constructed, reconstructed, enlarged, improved, furnished, or63
equipped, or any combination thereof, under this chapter so long64
as such property is used by the issuer for purposes whichthat65
would otherwise exempt such property; has ceased to be used by a66
former lessee-user or sublessee-user and is not occupied or used;67
or has been acquired by the issuer, but development has not yet68
commenced. The exemption shall be effective as of the date the69
exempt use begins. All taxes on the exempt real or personal70
property for the year should be prorated and the taxes for the71
exempt portion of the year shall be remitted by the county72
auditor.73

       (B) Bonds issued under this chapter, the transfer thereof,74
and the interest and other income from the bonds, including any75
profit made on the sale thereof, are free from taxation within the76
state.77

       Sec. 2915.01.  As used in this chapter:78

       (A) "Bookmaking" means the business of receiving or paying79
off bets.80

       (B) "Bet" means the hazarding of anything of value upon the81
result of an event, undertaking, or contingency, but does not82
include a bona fide business risk.83

       (C) "Scheme of chance" means a slot machine, lottery, numbers84
game, pool, or other scheme in which a participant gives a85
valuable consideration for a chance to win a prize, but does not86
include bingo.87

       (D) "Game of chance" means poker, craps, roulette, or other 88
game in which a player gives anything of value in the hope of 89
gain, the outcome of which is determined largely by chance, but 90
does not include bingo.91

       (E) "Game of chance conducted for profit" means any game of 92
chance designed to produce income for the person who conducts or 93
operates the game of chance, but does not include bingo.94

       (F) "Gambling device" means any of the following:95

       (1) A book, totalizer, or other equipment for recording bets;96

       (2) A ticket, token, or other device representing a chance,97
share, or interest in a scheme of chance or evidencing a bet;98

       (3) A deck of cards, dice, gaming table, roulette wheel, slot 99
machine, or other apparatus designed for use in connection with a 100
game of chance;101

       (4) Any equipment, device, apparatus, or paraphernalia102
specially designed for gambling purposes;103

       (5) Bingo supplies sold or otherwise provided, or used, in104
violation of this chapter.105

       (G) "Gambling offense" means any of the following:106

       (1) A violation of section 2915.02, 2915.03, 2915.04,107
2915.05, 2915.07, 2915.08, 2915.081, 2915.082, 2915.09, 2915.091,108
2915.092, 2915.10, or 2915.11 of the Revised Code;109

       (2) A violation of an existing or former municipal ordinance110
or law of this or any other state or the United States111
substantially equivalent to any section listed in division (G)(1)112
of this section or a violation of section 2915.06 of the Revised113
Code as it existed prior to July 1, 1996;114

       (3) An offense under an existing or former municipal115
ordinance or law of this or any other state or the United States,116
of which gambling is an element;117

       (4) A conspiracy or attempt to commit, or complicity in118
committing, any offense under division (G)(1), (2), or (3) of this119
section.120

       (H) Except as otherwise provided in this chapter, "charitable 121
organization" means any tax exempt religious, educational, 122
veteran's, fraternal, service, nonprofit medical, volunteer rescue 123
service, volunteer firefighter's, senior citizen's, youth 124
athletic, amateur athletic, or youth athletic park organization. 125
An organization is tax exempt if the organization is, and has126
received from the internal revenue service a determination letter127
that currently is in effect stating that the organization is,128
exempt from federal income taxation under subsection 501(a) and129
described in subsection 501(c)(3), 501(c)(4), 501(c)(8),130
501(c)(10), or 501(c)(19) of the Internal Revenue Code. To qualify 131
as a charitable organization, an organization, except a volunteer 132
rescue service or volunteer fire fighter's organization, shall 133
have been in continuous existence as such in this state for a 134
period of two years immediately preceding either the making of an 135
application for a bingo license under section 2915.08 of the136
Revised Code or the conducting of any scheme of chance or game of137
chance as provided in division (C) of section 2915.02 of the138
Revised Code. A charitable organization that is exempt from 139
federal income taxation under subsection 501(a) and described in 140
subsection 501(c)(3) of the Internal Revenue Code and that is 141
created by a veteran's organization or a fraternal organization 142
does not have to have been in continuous existence as such in this 143
state for a period of two years immediately preceding either the 144
making of an application for a bingo license under section 2915.08 145
of the Revised Code or the conducting of any scheme of chance or 146
game of chance as provided in division (D) of section 2915.02 of 147
the Revised Code.148

       (I) "Religious organization" means any church, body of149
communicants, or group that is not organized or operated for150
profit and that gathers in common membership for regular worship151
and religious observances.152

       (J) "Educational organization" means any organization within153
this state that is not organized for profit, the exclusive purpose 154
of which is to educate and develop the capabilities of individuals 155
through instruction, and that operates or contributes to the 156
support of a school, academy, college, or university.157

       (K) "Veteran's organization" means any individual post of a158
national veteran's association or an auxiliary unit of any159
individual post of a national veteran's association, which post or160
auxiliary unit has been incorporated as a nonprofit corporation161
for at least two years and has received a letter from the state162
headquarters of the national veteran's association indicating that163
the individual post or auxiliary unit is in good standing with the164
national veteran's association. As used in this division,165
"national veteran's association" means any veteran's association166
that has been in continuous existence as such for a period of at167
least five years and either is incorporated by an act of the168
United States congress or has a national dues-paying membership of169
at least five thousand persons.170

       (L) "Volunteer firefighter's organization" means any171
organization of volunteer firefighters, as defined in section172
146.01 of the Revised Code, that is organized and operated173
exclusively to provide financial support for a volunteer fire174
department or a volunteer fire company and that is recognized or 175
ratified by a county, municipal corporation, or township.176

       (M) "Fraternal organization" means any society, order, or177
association within this state, except a college or high school178
fraternity, that is not organized for profit, that is a branch,179
lodge, or chapter of a national or state organization, that exists180
exclusively for the common business or sodality of its members,181
and that has been in continuous existence in this state for a182
period of five years.183

       (N) "Volunteer rescue service organization" means any184
organization of volunteers organized to function as an emergency185
medical service organization, as defined in section 4765.01 of the186
Revised Code.187

       (O) "Service organization" means any organization, not188
organized for profit, that is organized and operated exclusively189
to provide, or to contribute to the support of organizations or190
institutions organized and operated exclusively to provide,191
medical and therapeutic services for persons who are crippled,192
born with birth defects, or have any other mental or physical193
defect or those organized and operated exclusively to protect, or194
to contribute to the support of organizations or institutions195
organized and operated exclusively to protect, animals from196
inhumane treatment.197

       (P) "Nonprofit medical organization" means any organization198
that has been incorporated as a nonprofit corporation for at least199
five years and that has continuously operated and will be operated200
exclusively to provide, or to contribute to the support of201
organizations or institutions organized and operated exclusively202
to provide, hospital, medical, research, or therapeutic services203
for the public.204

       (Q) "Senior citizen's organization" means any private205
organization, not organized for profit, that is organized and206
operated exclusively to provide recreational or social services207
for persons who are fifty-five years of age or older and that is208
described and qualified under subsection 501(c)(3) of the Internal209
Revenue Code.210

       (R) "Charitable bingo game" means any bingo game described in211
division (S)(1) or (2) of this section that is conducted by a212
charitable organization that has obtained a license pursuant to 213
section 2915.08 of the Revised Code and the proceeds of which are 214
used for a charitable purpose.215

       (S) "Bingo" means either of the following:216

       (1) A game with all of the following characteristics:217

       (a) The participants use bingo cards or sheets, including218
paper formats and electronic representation or image formats, that219
are divided into twenty-five spaces arranged in five horizontal220
and five vertical rows of spaces, with each space, except the221
central space, being designated by a combination of a letter and a222
number and with the central space being designated as a free223
space.224

       (b) The participants cover the spaces on the bingo cards or225
sheets that correspond to combinations of letters and numbers that226
are announced by a bingo game operator.227

       (c) A bingo game operator announces combinations of letters228
and numbers that appear on objects that a bingo game operator229
selects by chance, either manually or mechanically, from a230
receptacle that contains seventy-five objects at the beginning of231
each game, each object marked by a different combination of a232
letter and a number that corresponds to one of the seventy-five233
possible combinations of a letter and a number that can appear on234
the bingo cards or sheets.235

       (d) The winner of the bingo game includes any participant who 236
properly announces during the interval between the announcements 237
of letters and numbers as described in division (S)(1)(c) of this 238
section, that a predetermined and preannounced pattern of spaces 239
has been covered on a bingo card or sheet being used by the 240
participant.241

       (2) Instant bingo, punch boards, and raffles.242

       (T) "Conduct" means to back, promote, organize, manage, carry243
on, sponsor, or prepare for the operation of bingo or a game of244
chance.245

       (U) "Bingo game operator" means any person, except security246
personnel, who performs work or labor at the site of bingo,247
including, but not limited to, collecting money from participants,248
handing out bingo cards or sheets or objects to cover spaces on 249
bingo cards or sheets, selecting from a receptacle the objects250
that contain the combination of letters and numbers that appear on 251
bingo cards or sheets, calling out the combinations of letters and 252
numbers, distributing prizes, selling or redeeming instant bingo253
tickets or cards, supervising the operation of a punch board, 254
selling raffle tickets, selecting raffle tickets from a receptacle 255
and announcing the winning numbers in a raffle, and preparing, 256
selling, and serving food or beverages.257

       (V) "Participant" means any person who plays bingo.258

       (W) "Bingo session" means a period that includes both of the 259
following:260

       (1) Not to exceed five continuous hours for the conduct of 261
one or more games described in division (S)(1) of this section,262
instant bingo, and seal cards;263

       (2) A period for the conduct of instant bingo and seal cards264
for not more than two hours before and not more than two hours265
after the period described in division (W)(1) of this section.266

       (X) "Gross receipts" means all money or assets, including267
admission fees, that a person receives from bingo without the 268
deduction of any amounts for prizes paid out or for the expenses 269
of conducting bingo. "Gross receipts" does not include any money 270
directly taken in from the sale of food or beverages by a 271
charitable organization conducting bingo, or by a bona fide 272
auxiliary unit or society of a charitable organization conducting273
bingo, provided all of the following apply:274

       (1) The auxiliary unit or society has been in existence as a275
bona fide auxiliary unit or society of the charitable organization276
for at least two years prior to conducting bingo.277

       (2) The person who purchases the food or beverage receives278
nothing of value except the food or beverage and items customarily279
received with the purchase of that food or beverage.280

       (3) The food and beverages are sold at customary and281
reasonable prices.282

       (Y) "Security personnel" includes any person who either is a283
sheriff, deputy sheriff, marshal, deputy marshal, township284
constable, or member of an organized police department of a285
municipal corporation or has successfully completed a peace286
officer's training course pursuant to sections 109.71 to 109.79 of287
the Revised Code and who is hired to provide security for the288
premises on which bingo is conducted.289

       (Z) "Charitable purpose" means that the net profit of bingo,290
other than instant bingo, is used by, or is given, donated, or291
otherwise transferred to, any of the following:292

       (1) Any organization that is described in subsection293
509(a)(1), 509(a)(2), or 509(a)(3) of the Internal Revenue Code294
and is either a governmental unit or an organization that is tax295
exempt under subsection 501(a) and described in subsection296
501(c)(3) of the Internal Revenue Code;297

       (2) A veteran's organization that is a post, chapter, or 298
organization of veterans, or an auxiliary unit or society of, or a 299
trust or foundation for, any such post, chapter, or organization 300
organized in the United States or any of its possessions, at least301
seventy-five per cent of the members of which are veterans and302
substantially all of the other members of which are individuals303
who are spouses, widows, or widowers of veterans, or such 304
individuals, provided that no part of the net earnings of such 305
post, chapter, or organization inures to the benefit of any 306
private shareholder or individual, and further provided that the 307
net profit is used by the post, chapter, or organization for the 308
charitable purposes set forth in division (B)(12)(11) of section309
5739.02 of the Revised Code, is used for awarding scholarships to 310
or for attendance at an institution mentioned in division311
(B)(12)(11) of section 5739.02 of the Revised Code, is donated to312
a governmental agency, or is used for nonprofit youth activities,313
the purchase of United States or Ohio flags that are donated to314
schools, youth groups, or other bona fide nonprofit organizations, 315
promotion of patriotism, or disaster relief;316

       (3) A fraternal organization that has been in continuous317
existence in this state for fifteen years and that uses the net318
profit exclusively for religious, charitable, scientific,319
literary, or educational purposes, or for the prevention of320
cruelty to children or animals, if contributions for such use321
would qualify as a deductible charitable contribution under322
subsection 170 of the Internal Revenue Code;323

       (4) A volunteer firefighter's organization that uses the net 324
profit for the purposes set forth in division (L) of this section.325

       (AA) "Internal Revenue Code" means the "Internal Revenue Code326
of 1986," 100 Stat. 2085, 26 U.S.C. 1, as now or hereafter327
amended.328

       (BB) "Youth athletic organization" means any organization,329
not organized for profit, that is organized and operated330
exclusively to provide financial support to, or to operate,331
athletic activities for persons who are twenty-one years of age or332
younger by means of sponsoring, organizing, operating, or333
contributing to the support of an athletic team, club, league, or334
association.335

       (CC) "Youth athletic park organization" means any336
organization, not organized for profit, that satisfies both of the337
following:338

       (1) It owns, operates, and maintains playing fields that339
satisfy both of the following:340

       (a) The playing fields are used at least one hundred days per 341
year for athletic activities by one or more organizations, not342
organized for profit, each of which is organized and operated343
exclusively to provide financial support to, or to operate,344
athletic activities for persons who are eighteen years of age or345
younger by means of sponsoring, organizing, operating, or346
contributing to the support of an athletic team, club, league, or347
association.348

       (b) The playing fields are not used for any profit-making349
activity at any time during the year.350

       (2) It uses the proceeds of bingo it conducts exclusively for 351
the operation, maintenance, and improvement of its playing fields 352
of the type described in division (CC)(1) of this section.353

       (DD) "Amateur athletic organization" means any organization,354
not organized for profit, that is organized and operated355
exclusively to provide financial support to, or to operate,356
athletic activities for persons who are training for amateur357
athletic competition that is sanctioned by a national governing358
body as defined in the "Amateur Sports Act of 1978," 90 Stat.359
3045, 36 U.S.C.A. 373.360

       (EE) "Bingo supplies" means bingo cards or sheets; instant361
bingo tickets or cards; electronic bingo aids; raffle tickets;362
punch boards; seal cards; instant bingo ticket dispensers; and363
devices for selecting or displaying the combination of bingo364
letters and numbers or raffle tickets. Items that are "bingo365
supplies" are not gambling devices if sold or otherwise provided,366
and used, in accordance with this chapter. For purposes of this367
chapter, "bingo supplies" are not to be considered equipment used368
to conduct a bingo game.369

       (FF) "Instant bingo" means a form of bingo that uses folded370
or banded tickets or paper cards with perforated break-open tabs,371
a face of which is covered or otherwise hidden from view to372
conceal a number, letter, or symbol, or set of numbers, letters,373
or symbols, some of which have been designated in advance as prize374
winners. "Instant bingo" includes seal cards. "Instant bingo" does 375
not include any device that is activated by the insertion of a 376
coin, currency, token, or an equivalent, and that contains as one 377
of its components a video display monitor that is capable of378
displaying numbers, letters, symbols, or characters in winning or379
losing combinations.380

       (GG) "Seal card" means a form of instant bingo that uses381
instant bingo tickets in conjunction with a board or placard that382
contains one or more seals that, when removed or opened, reveal383
predesignated winning numbers, letters, or symbols.384

       (HH) "Raffle" means a form of bingo in which the one or more385
prizes are won by one or more persons who have purchased a raffle386
ticket. The one or more winners of the raffle are determined by387
drawing a ticket stub or other detachable section from a388
receptacle containing ticket stubs or detachable sections389
corresponding to all tickets sold for the raffle.390

       (II) "Punch board" means a board containing a number of holes391
or receptacles of uniform size in which are placed, mechanically392
and randomly, serially numbered slips of paper that may be punched393
or drawn from the hole or receptacle when used in conjunction with394
instant bingo. A player may punch or draw the numbered slips of395
paper from the holes or receptacles and obtain the prize396
established for the game if the number drawn corresponds to a397
winning number or, if the punch board includes the use of a seal398
card, a potential winning number.399

       (JJ) "Gross profit" means gross receipts minus the amount400
actually expended for the payment of prize awards.401

       (KK) "Net profit" means gross profit minus expenses.402

       (LL) "Expenses" means the reasonable amount of gross profit403
actually expended for all of the following:404

       (1) The purchase or lease of bingo supplies;405

       (2) The annual license fee required under section 2915.08 of406
the Revised Code;407

       (3) Bank fees and service charges for a bingo session or game408
account described in section 2915.10 of the Revised Code;409

       (4) Audits and accounting services;410

       (5) Safes;411

       (6) Cash registers;412

       (7) Hiring security personnel;413

       (8) Advertising bingo;414

       (9) Renting premises in which to conduct bingo;415

       (10) Tables and chairs;416

       (11) Any other product or service directly related to the417
conduct of bingo that is authorized in rules adopted by the418
attorney general under division (B)(1) of section 2915.08 of the419
Revised Code.420

       (MM) "Person" has the same meaning as in section 1.59 of the421
Revised Code and includes any firm or any other legal entity,422
however organized.423

       (NN) "Revoke" means to void permanently all rights and424
privileges of the holder of a license issued under section425
2915.08, 2915.081, or 2915.082 of the Revised Code or a charitable426
gaming license issued by another jurisdiction.427

       (OO) "Suspend" means to interrupt temporarily all rights and428
privileges of the holder of a license issued under section429
2915.08, 2915.081, or 2915.082 of the Revised Code or a charitable430
gaming license issued by another jurisdiction.431

       (PP) "Distributor" means any person who purchases or obtains432
bingo supplies and who sells, offers for sale, or otherwise433
provides or offers to provide the bingo supplies to another person434
for use in this state.435

       (QQ) "Manufacturer" means any person who assembles completed436
bingo supplies from raw materials, other items, or subparts or who437
modifies, converts, adds to, or removes parts from bingo supplies438
to further their promotion or sale.439

       (RR) "Gross annual revenues" means the annual gross receipts440
derived from the conduct of bingo described in division (S)(1) of441
this section plus the annual net profit derived from the conduct442
of bingo described in division (S)(2) of this section.443

       (SS) "Instant bingo ticket dispenser" means a mechanical444
device that dispenses an instant bingo ticket or card as the sole445
item of value dispensed and that has the following446
characteristics:447

        (1) It is activated upon the insertion of United States448
currency.449

        (2) It performs no gaming functions.450

        (3) It does not contain a video display monitor or generate451
noise.452

        (4) It is not capable of displaying any numbers, letters,453
symbols, or characters in winning or losing combinations.454

       (5) It does not simulate or display rolling or spinning455
reels.456

        (6) It is incapable of determining whether a dispensed bingo 457
ticket or card is a winning or nonwinning ticket or card and458
requires a winning ticket or card to be paid by a bingo game459
operator.460

        (7) It may provide accounting and security features to aid in 461
accounting for the instant bingo tickets or cards it dispenses.462

       (8) It is not part of an electronic network and is not463
interactive.464

       (TT)(1) "Electronic bingo aid" means an electronic device465
used by a participant to monitor bingo cards or sheets purchased466
at the time and place of a bingo session and that does all of the467
following:468

        (a) It provides a means for a participant to input numbers469
and letters announced by a bingo caller.470

        (b) It compares the numbers and letters entered by the471
participant to the bingo faces previously stored in the memory of472
the device.473

        (c) It identifies a winning bingo pattern.474

        (2) "Electronic bingo aid" does not include any device into475
which a coin, currency, token, or an equivalent is inserted to476
activate play.477

       (UU) "Deal of instant bingo tickets" means a single game of478
instant bingo tickets all with the same serial number.479

       (VV) "Slot" machine means either of the following:480

        (1) Any mechanical, electronic, video, or digital device that 481
is capable of accepting anything of value, directly or indirectly, 482
from or on behalf of a player who gives the thing of value in the 483
hope of gain, the outcome of which is determined largely or wholly 484
by chance;485

        (2) Any mechanical, electronic, video, or digital device that 486
is capable of accepting anything of value, directly or indirectly, 487
from or on behalf of a player to conduct or dispense bingo or a 488
scheme or game of chance.489

        (WW) "Net profit from the proceeds of the sale of instant490
bingo" means gross profit minus the ordinary, necessary, and491
reasonable expense expended for the purchase of instant bingo492
supplies.493

       (XX) "Charitable instant bingo organization" means an494
organization that is exempt from federal income taxation under495
subsection 501(a) and described in subsection 501(c)(3) of the496
Internal Revenue Code and is a charitable organization as defined497
in this section. A "charitable instant bingo organization" does498
not include a charitable organization that is exempt from federal499
income taxation under subsection 501(a) and described in500
subsection 501(c)(3) of the Internal Revenue Code and that is501
created by a veteran's organization or a fraternal organization in502
regards to bingo conducted or assisted by a veteran's organization503
or a fraternal organization pursuant to section 2915.13 of the504
Revised Code.505

       Sec. 4505.06.  (A)(1) Application for a certificate of title 506
shall be made in a form prescribed by the registrar of motor 507
vehicles and shall be sworn to before a notary public or other 508
officer empowered to administer oaths. The application shall be 509
filed with the clerk of any court of common pleas. An application 510
for a certificate of title may be filed electronically by any511
electronic means approved by the registrar in any county with the 512
clerk of the court of common pleas of that county. Any payments 513
required by this chapter shall be considered as accompanying any 514
electronically transmitted application when payment actually is 515
received by the clerk. Payment of any fee or taxes may be made by 516
electronic transfer of funds.517

       (2) The application for a certificate of title shall be 518
accompanied by the fee prescribed in section 4505.09 of the 519
Revised Code. The fee shall be retained by the clerk who issues520
the certificate of title and shall be distributed in accordance521
with that section. If a clerk of a court of common pleas, other522
than the clerk of the court of common pleas of an applicant's523
county of residence, issues a certificate of title to the524
applicant, the clerk shall transmit data related to the 525
transaction to the automated title processing system.526

       (3) If a certificate of title previously has been issued for 527
a motor vehicle in this state, the application for a certificate 528
of title also shall be accompanied by that certificate of title 529
duly assigned, unless otherwise provided in this chapter. If a 530
certificate of title previously has not been issued for the motor 531
vehicle in this state, the application, unless otherwise provided 532
in this chapter, shall be accompanied by a manufacturer's or 533
importer's certificate or by a certificate of title of another 534
state from which the motor vehicle was brought into this state. If 535
the application refers to a motor vehicle last previously 536
registered in another state, the application also shall be 537
accompanied by the physical inspection certificate required by 538
section 4505.061 of the Revised Code. If the application is made 539
by two persons regarding a motor vehicle in which they wish to 540
establish joint ownership with right of survivorship, they may do 541
so as provided in section 2131.12 of the Revised Code. If the 542
applicant requests a designation of the motor vehicle in 543
beneficiary form so that upon the death of the owner of the motor 544
vehicle, ownership of the motor vehicle will pass to a designated 545
transfer-on-death beneficiary or beneficiaries, the applicant may 546
do so as provided in section 2131.13 of the Revised Code. A person 547
who establishes ownership of a motor vehicle that is transferable 548
on death in accordance with section 2131.13 of the Revised Code 549
may terminate that type of ownership or change the designation of 550
the transfer-on-death beneficiary or beneficiaries by applying for 551
a certificate of title pursuant to this section. The clerk shall552
retain the evidence of title presented by the applicant and on553
which the certificate of title is issued, except that, if an 554
application for a certificate of title is filed electronically by 555
an electronic motor vehicle dealer on behalf of the purchaser of a 556
motor vehicle, the clerk shall retain the completed electronic 557
record to which the dealer converted the certificate of title 558
application and other required documents. The electronic motor 559
vehicle dealer shall forward the actual application and all other560
documents relating to the sale of the motor vehicle to any clerk561
within thirty days after the certificate of title is issued. The562
registrar, after consultation with the attorney general, shall563
adopt rules that govern the location at which, and the manner in564
which, are stored the actual application and all other documents565
relating to the sale of a motor vehicle when an electronic motor566
vehicle dealer files the application for a certificate of title567
electronically on behalf of the purchaser.568

       The clerk shall use reasonable diligence in ascertaining 569
whether or not the facts in the application for a certificate of 570
title are true by checking the application and documents 571
accompanying it or the electronic record to which a dealer572
converted the application and accompanying documents with the573
records of motor vehicles in the clerk's office. If the clerk is574
satisfied that the applicant is the owner of the motor vehicle 575
and that the application is in the proper form, the clerk, within 576
five business days after the application is filed, shall issue a577
physical certificate of title over the clerk's signature and 578
sealed with the clerk's seal, unless the applicant specifically 579
requests the clerk not to issue a physical certificate of title 580
and instead to issue an electronic certificate of title. For 581
purposes of the transfer of a certificate of title, if the clerk 582
is satisfied that the secured party has duly discharged a lien 583
notation but has not canceled the lien notation with a clerk, the 584
clerk may cancel the lien notation on the automated title 585
processing system and notify the clerk of the county of origin.586

       (4) In the case of the sale of a motor vehicle to a general587
buyer or user by a dealer, by a motor vehicle leasing dealer588
selling the motor vehicle to the lessee or, in a case in which the589
leasing dealer subleased the motor vehicle, the sublessee, at the 590
end of the lease agreement or sublease agreement, or by a591
manufactured home broker, the certificate of title shall be 592
obtained in the name of the buyer by the dealer, leasing dealer,593
or manufactured home broker, as the case may be, upon application 594
signed by the buyer. The certificate of title shall be issued, or 595
the process of entering the certificate of title application 596
information into the automated title processing system if a 597
physical certificate of title is not to be issued shall be 598
completed, within five business days after the application for 599
title is filed with the clerk. If the buyer of the motor vehicle 600
previously leased the motor vehicle and is buying the motor 601
vehicle at the end of the lease pursuant to that lease, the 602
certificate of title shall be obtained in the name of the buyer by 603
the motor vehicle leasing dealer who previously leased the motor 604
vehicle to the buyer or by the motor vehicle leasing dealer who 605
subleased the motor vehicle to the buyer under a sublease 606
agreement.607

       In all other cases, except as provided in section 4505.032 608
and division (D)(2) of section 4505.11 of the Revised Code, such 609
certificates shall be obtained by the buyer.610

       (5)(a)(i) If the certificate of title is being obtained in611
the name of the buyer by a motor vehicle dealer or motor vehicle612
leasing dealer and there is a security interest to be noted on the613
certificate of title, the dealer or leasing dealer shall submit614
the application for the certificate of title and payment of the615
applicable tax to a clerk within seven business days after the616
later of the delivery of the motor vehicle to the buyer or the617
date the dealer or leasing dealer obtains the manufacturer's or618
importer's certificate, or certificate of title issued in the name619
of the dealer or leasing dealer, for the motor vehicle. Submission620
of the application for the certificate of title and payment of the621
applicable tax within the required seven business days may be622
indicated by postmark or receipt by a clerk within that period.623

       (ii) Upon receipt of the certificate of title with the624
security interest noted on its face, the dealer or leasing dealer625
shall forward the certificate of title to the secured party at the626
location noted in the financing documents or otherwise specified627
by the secured party.628

       (iii) A motor vehicle dealer or motor vehicle leasing dealer629
is liable to a secured party for a late fee of ten dollars per day630
for each certificate of title application and payment of the631
applicable tax that is submitted to a clerk more than seven632
business days but less than twenty-one days after the later of the633
delivery of the motor vehicle to the buyer or the date the dealer634
or leasing dealer obtains the manufacturer's or importer's635
certificate, or certificate of title issued in the name of the636
dealer or leasing dealer, for the motor vehicle and, from then on,637
twenty-five dollars per day until the application and applicable638
tax are submitted to a clerk.639

       (b) In all cases of transfer of a motor vehicle, the640
application for certificate of title shall be filed within thirty 641
days after the assignment or delivery of the motor vehicle. If an 642
application for a certificate of title is not filed within the 643
period specified in division (A)(5)(b) of this section, the clerk 644
shall collect a fee of five dollars for the issuance of the 645
certificate, except that no such fee shall be required from a 646
motor vehicle salvage dealer, as defined in division (A) of 647
section 4738.01 of the Revised Code, who immediately surrenders 648
the certificate of title for cancellation. The fee shall be in 649
addition to all other fees established by this chapter, and shall 650
be retained by the clerk. The registrar shall provide, on the 651
certificate of title form prescribed by section 4505.07 of the 652
Revised Code, language necessary to give evidence of the date on 653
which the assignment or delivery of the motor vehicle was made.654

       (6) As used in division (A) of this section, "lease655
agreement," "lessee," and "sublease agreement" have the same656
meanings as in section 4505.04 of the Revised Code.657

       (B) The clerk, except as provided in this section, shall 658
refuse to accept for filing any application for a certificate of 659
title and shall refuse to issue a certificate of title unless the 660
dealer or manufactured home broker or the applicant, in cases in 661
which the certificate shall be obtained by the buyer, submits with 662
the application payment of the tax levied by or pursuant to 663
Chapters 5739. and 5741. of the Revised Code based on the 664
purchaser's county of residence. Upon payment of the tax in 665
accordance with division (E) of this section, the clerk shall 666
issue a receipt prescribed by the registrar and agreed upon by the 667
tax commissioner showing payment of the tax or a receipt issued by 668
the commissioner showing the payment of the tax. When submitting 669
payment of the tax to the clerk, a dealer shall retain any 670
discount to which the dealer is entitled under section 5739.12 of 671
the Revised Code.672

       For receiving and disbursing such taxes paid to the clerk by673
a resident of the clerk's county, the clerk may retain a poundage 674
fee of one and one one-hundredth per cent, and the clerk shall 675
pay the poundage fee into the certificate of title administration 676
fund created by section 325.33 of the Revised Code. The clerk 677
shall not retain a poundage fee from payments of taxes by persons 678
who do not reside in the clerk's county.679

       A clerk, however, may retain from the taxes paid to the clerk680
an amount equal to the poundage fees associated with certificates681
of title issued by other clerks of courts of common pleas to682
applicants who reside in the first clerk's county. The registrar,683
in consultation with the tax commissioner and the clerks of the684
courts of common pleas, shall develop a report from the automated685
title processing system that informs each clerk of the amount of686
the poundage fees that the clerk is permitted to retain from those687
taxes because of certificates of title issued by the clerks of688
other counties to applicants who reside in the first clerk's689
county.690

       In the case of casual sales of motor vehicles, as defined in 691
section 4517.01 of the Revised Code, the price for the purpose of 692
determining the tax shall be the purchase price on the assigned 693
certificate of title executed by the seller and filed with the 694
clerk by the buyer on a form to be prescribed by the registrar, 695
which shall be prima-facie evidence of the amount for the 696
determination of the tax.697

       (C)(1) If the transferor indicates on the certificate of 698
title that the odometer reflects mileage in excess of the designed 699
mechanical limit of the odometer, the clerk shall enter the phrase 700
"exceeds mechanical limits" following the mileage designation. If 701
the transferor indicates on the certificate of title that the 702
odometer reading is not the actual mileage, the clerk shall enter 703
the phrase "nonactual: warning - odometer discrepancy" following 704
the mileage designation. The clerk shall use reasonable care in 705
transferring the information supplied by the transferor, but is 706
not liable for any errors or omissions of the clerk or those of 707
the clerk's deputies in the performance of the clerk's duties 708
created by this chapter.709

       The registrar shall prescribe an affidavit in which the 710
transferor shall swear to the true selling price and, except as 711
provided in this division, the true odometer reading of the motor 712
vehicle. The registrar may prescribe an affidavit in which the 713
seller and buyer provide information pertaining to the odometer 714
reading of the motor vehicle in addition to that required by this 715
section, as such information may be required by the United States 716
secretary of transportation by rule prescribed under authority of 717
subchapter IV of the "Motor Vehicle Information and Cost Savings 718
Act," 86 Stat. 961 (1972), 15 U.S.C. 1981.719

       (2) Division (C)(1) of this section does not require the 720
giving of information concerning the odometer and odometer reading 721
of a motor vehicle when ownership of a motor vehicle is being 722
transferred as a result of a bequest, under the laws of intestate 723
succession, to a survivor pursuant to section 2106.18, 2131.12, or 724
4505.10 of the Revised Code, to a transfer-on-death beneficiary or 725
beneficiaries pursuant to section 2131.13 of the Reviseed Code, or 726
in connection with the creation of a security interest.727

       (D) When the transfer to the applicant was made in some 728
other state or in interstate commerce, the clerk, except as 729
provided in this section, shall refuse to issue any certificate 730
of title unless the tax imposed by or pursuant to Chapter 5741. of 731
the Revised Code based on the purchaser's county of residence has 732
been paid as evidenced by a receipt issued by the tax 733
commissioner, or unless the applicant submits with the application 734
payment of the tax. Upon payment of the tax in accordance with 735
division (E) of this section, the clerk shall issue a receipt 736
prescribed by the registrar and agreed upon by the tax 737
commissioner, showing payment of the tax.738

       For receiving and disbursing such taxes paid to the clerk by 739
a resident of the clerk's county, the clerk may retain a poundage 740
fee of one and one one-hundredth per cent. The clerk shall not 741
retain a poundage fee from payments of taxes by persons who do not 742
reside in the clerk's county.743

       A clerk, however, may retain from the taxes paid to the clerk744
an amount equal to the poundage fees associated with certificates745
of title issued by other clerks of courts of common pleas to746
applicants who reside in the first clerk's county. The registrar,747
in consultation with the tax commissioner and the clerks of the748
courts of common pleas, shall develop a report from the automated749
title processing system that informs each clerk of the amount of750
the poundage fees that the clerk is permitted to retain from those751
taxes because of certificates of title issued by the clerks of752
other counties to applicants who reside in the first clerk's753
county.754

       When the vendor is not regularly engaged in the business of 755
selling motor vehicles, the vendor shall not be required to 756
purchase a vendor's license or make reports concerning those757
sales.758

       (E) The clerk shall accept any payment of a tax in cash, or 759
by cashier's check, certified check, draft, money order, or 760
teller check issued by any insured financial institution payable 761
to the clerk and submitted with an application for a certificate 762
of title under division (B) or (D) of this section. The clerk 763
also may accept payment of the tax by corporate, business, or 764
personal check, credit card, electronic transfer or wire transfer, 765
debit card, or any other accepted form of payment made payable to 766
the clerk. The clerk may require bonds, guarantees, or letters of 767
credit to ensure the collection of corporate, business, or 768
personal checks. Any service fee charged by a third party to a 769
clerk for the use of any form of payment may be paid by the clerk 770
from the certificate of title administration fund created in 771
section 325.33 of the Revised Code, or may be assessed by the 772
clerk upon the applicant as an additional fee. Upon collection, 773
the additional fees shall be paid by the clerk into that 774
certificate of title administration fund.775

       The clerk shall make a good faith effort to collect any 776
payment of taxes due but not made because the payment was returned 777
or dishonored, but the clerk is not personally liable for the 778
payment of uncollected taxes or uncollected fees. The clerk shall 779
notify the tax commissioner of any such payment of taxes that is 780
due but not made and shall furnish the information to the 781
commissioner that the commissioner requires. The clerk shall 782
deduct the amount of taxes due but not paid from the clerk's 783
periodic remittance of tax payments, in accordance with procedures 784
agreed upon by the tax commissioner. The commissioner may collect 785
taxes due by assessment in the manner provided in section 5739.13 786
of the Revised Code.787

       Any person who presents payment that is returned or 788
dishonored for any reason is liable to the clerk for payment of a 789
penalty over and above the amount of the taxes due. The clerk 790
shall determine the amount of the penalty, and the penalty shall791
be no greater than that amount necessary to compensate the clerk 792
for banking charges, legal fees, or other expenses incurred by the 793
clerk in collecting the returned or dishonored payment. The 794
remedies and procedures provided in this section are in addition 795
to any other available civil or criminal remedies. Subsequently 796
collected penalties, poundage fees, and title fees, less any title797
fee due the state, from returned or dishonored payments collected798
by the clerk shall be paid into the certificate of title 799
administration fund. Subsequently collected taxes, less poundage800
fees, shall be sent by the clerk to the treasurer of state at the 801
next scheduled periodic remittance of tax payments, with 802
information as the commissioner may require. The clerk may abate 803
all or any part of any penalty assessed under this division.804

       (F) In the following cases, the clerk shall accept for 805
filing an application and shall issue a certificate of title 806
without requiring payment or evidence of payment of the tax:807

       (1) When the purchaser is this state or any of its political 808
subdivisions, a church, or an organization whose purchases are 809
exempted by section 5739.02 of the Revised Code;810

       (2) When the transaction in this state is not a retail sale 811
as defined by section 5739.01 of the Revised Code;812

       (3) When the purchase is outside this state or in interstate 813
commerce and the purpose of the purchaser is not to use, store, or 814
consume within the meaning of section 5741.01 of the Revised Code;815

       (4) When the purchaser is the federal government;816

       (5) When the motor vehicle was purchased outside this state 817
for use outside this state;818

       (6) When the motor vehicle is purchased by a nonresident of 819
this state for immediate removal from this state, and will be 820
permanently titled and registered in another state, as provided 821
by division (B)(23)(22) of section 5739.02 of the Revised Code,822
and upon presentation of a copy of the affidavit provided by that 823
section, and a copy of the exemption certificate provided by 824
section 5739.03 of the Revised Code.825

       The clerk shall forward all payments of taxes, less poundage 826
fees, to the treasurer of state in a manner to be prescribed by827
the tax commissioner and shall furnish information to the 828
commissioner as the commissioner requires.829

       (G) An application, as prescribed by the registrar and 830
agreed to by the tax commissioner, shall be filled out and sworn 831
to by the buyer of a motor vehicle in a casual sale. The 832
application shall contain the following notice in bold lettering: 833
"WARNING TO TRANSFEROR AND TRANSFEREE (SELLER AND BUYER): You are 834
required by law to state the true selling price. A false 835
statement is in violation of section 2921.13 of the Revised Code 836
and is punishable by six months' imprisonment or a fine of up to 837
one thousand dollars, or both. All transfers are audited by the 838
department of taxation. The seller and buyer must provide any 839
information requested by the department of taxation. The buyer 840
may be assessed any additional tax found to be due."841

       (H) For sales of manufactured homes or mobile homes 842
occurring on or after January 1, 2000, the clerk shall accept for 843
filing, pursuant to Chapter 5739. of the Revised Code, an 844
application for a certificate of title for a manufactured home or 845
mobile home without requiring payment of any tax pursuant to 846
section 5739.02, 5741.021, 5741.022, or 5741.023 of the Revised 847
Code, or a receipt issued by the tax commissioner showing payment 848
of the tax. For sales of manufactured homes or mobile homes 849
occurring on or after January 1, 2000, the applicant shall pay to 850
the clerk an additional fee of five dollars for each certificate 851
of title issued by the clerk for a manufactured or mobile home 852
pursuant to division (H) of section 4505.11 of the Revised Code 853
and for each certificate of title issued upon transfer of 854
ownership of the home. The clerk shall credit the fee to the 855
county certificate of title administration fund, and the fee shall856
be used to pay the expenses of archiving those certificates857
pursuant to division (A) of section 4505.08 and division (H)(3) of 858
section 4505.11 of the Revised Code. The tax commissioner shall859
administer any tax on a manufactured or mobile home pursuant to860
Chapters 5739. and 5741. of the Revised Code.861

       (I) Every clerk shall have the capability to transact by 862
electronic means all procedures and transactions relating to the 863
issuance of motor vehicle certificates of title that are 864
described in the Revised Code as being accomplished by electronic 865
means.866

       Sec. 4981.20.  (A) Any real or personal property, or both, of 867
the Ohio rail development commission that is acquired,868
constructed, reconstructed, enlarged, improved, furnished, or869
equipped, or any combination thereof, and leased or subleased870
under authority of sections 4981.11 to 4981.26 of the Revised Code871
shall be subject to ad valorem, sales, use, and franchise taxes872
and to zoning, planning, and building regulations and fees, to the873
same extent and in the same manner as if the lessee-user or874
sublessee-user thereof, rather than the issuer, had acquired,875
constructed, reconstructed, enlarged, improved, furnished, or876
equipped, or any combination thereof, such real or personal877
property, and title thereto was in the name of such lessee-user or878
sublessee-user.879

       The transfer of tangible personal property by lease or880
sublease under authority of sections 4981.11 to 4981.26 of the881
Revised Code is not a sale as used in Chapter 5739. of the Revised882
Code. The exemptions provided in divisions (B)(1) and (14)(12) of883
section 5739.02 of the Revised Code shall not be applicable to884
purchases for a project under sections 4981.11 to 4981.26 of the885
Revised Code.886

       The issuer shall be exempt from all taxes on its real or887
personal property, or both, which has been acquired, constructed,888
reconstructed, enlarged, improved, furnished, or equipped, or any889
combination thereof, under sections 4981.11 to 4981.26 of the890
Revised Code so long as such property is used by the issuer for891
purposes whichthat would otherwise exempt such property; has892
ceased to be used by a former lessee-user or sublessee-user and is893
not occupied or used; or has been acquired by the issuer but894
development has not yet commenced. The exemption shall be895
effective as of the date the exempt use begins. All taxes on the896
exempt real or personal property for the year should be prorated897
and the taxes for the exempt portion of the year shall be remitted898
by the county auditor.899

       (B) Bonds issued under sections 4981.11 to 4981.26 of the900
Revised Code, the transfer thereof, and the interest and other901
income from the bonds, including any profit made on the sale902
thereof, are free from taxation within the state.903

       Sec. 5739.01.  As used in this chapter:904

       (A) "Person" includes individuals, receivers, assignees,905
trustees in bankruptcy, estates, firms, partnerships,906
associations, joint-stock companies, joint ventures, clubs,907
societies, corporations, the state and its political subdivisions,908
and combinations of individuals of any form.909

       (B) "Sale" and "selling" include all of the following910
transactions for a consideration in any manner, whether absolutely911
or conditionally, whether for a price or rental, in money or by912
exchange, and by any means whatsoever:913

       (1) All transactions by which title or possession, or both,914
of tangible personal property, is or is to be transferred, or a915
license to use or consume tangible personal property is or is to916
be granted;917

       (2) All transactions by which lodging by a hotel is or is to918
be furnished to transient guests;919

       (3) All transactions by which:920

       (a) An item of tangible personal property is or is to be921
repaired, except property, the purchase of which would not be922
subject to the tax imposed by section 5739.02 of the Revised Code;923

       (b) An item of tangible personal property is or is to be924
installed, except property, the purchase of which would not be925
subject to the tax imposed by section 5739.02 of the Revised Code926
or property that is or is to be incorporated into and will become927
a part of a production, transmission, transportation, or928
distribution system for the delivery of a public utility service;929

       (c) The service of washing, cleaning, waxing, polishing, or930
painting a motor vehicle is or is to be furnished;931

       (d) Industrial laundry cleaning services are or are to be932
provided;933

       (e) Automatic data processing, computer services, or934
electronic information services are or are to be provided for use935
in business when the true object of the transaction is the receipt936
by the consumer of automatic data processing, computer services,937
or electronic information services rather than the receipt of938
personal or professional services to which automatic data939
processing, computer services, or electronic information services940
are incidental or supplemental. Notwithstanding any other941
provision of this chapter, such transactions that occur between942
members of an affiliated group are not sales. An affiliated group943
means two or more persons related in such a way that one person944
owns or controls the business operation of another member of the945
group. In the case of corporations with stock, one corporation946
owns or controls another if it owns more than fifty per cent of947
the other corporation's common stock with voting rights.948

       (f) Telecommunications service, other than mobile949
telecommunications service after July 31, 2002, is or is to be950
provided that originates or terminates in this state and is951
charged in the records of the telecommunications service vendor to952
the consumer's telephone number or account in this state, or that953
both originates and terminates in this state; but does not include954
transactions by which telecommunications service is paid for by955
using a prepaid authorization number or prepaid telephone calling956
card, or by which local telecommunications service is obtained957
from a coin-operated telephone and paid for by using coin;958

       (g) Landscaping and lawn care service is or is to be959
provided;960

       (h) Private investigation and security service is or is to be 961
provided;962

       (i) Information services or tangible personal property is963
provided or ordered by means of a nine hundred telephone call;964

       (j) Building maintenance and janitorial service is or is to965
be provided;966

       (k) Employment service is or is to be provided;967

       (l) Employment placement service is or is to be provided;968

       (m) Exterminating service is or is to be provided;969

       (n) Physical fitness facility service is or is to be970
provided;971

       (o) Recreation and sports club service is or is to be972
provided.973

       (p) After July 31, 2002, mobile telecommunications service is974
or is to be provided in this state when that service is sitused to975
this state pursuant to the "Mobile Telecommunications Sourcing976
Act," P. Pub. L. No. 106-252, 114 Stat. 626 to 632 (2000), 4977
U.S.C.A. 116 to 126, as amended.978

       (4) All transactions by which printed, imprinted,979
overprinted, lithographic, multilithic, blueprinted, photostatic,980
or other productions or reproductions of written or graphic matter981
are or are to be furnished or transferred;982

       (5) The production or fabrication of tangible personal983
property for a consideration for consumers who furnish either984
directly or indirectly the materials used in the production of985
fabrication work; and include the furnishing, preparing, or986
serving for a consideration of any tangible personal property987
consumed on the premises of the person furnishing, preparing, or988
serving such tangible personal property. Except as provided in989
section 5739.03 of the Revised Code, a construction contract990
pursuant to which tangible personal property is or is to be991
incorporated into a structure or improvement on and becoming a992
part of real property is not a sale of such tangible personal993
property. The construction contractor is the consumer of such994
tangible personal property, provided that the sale and995
installation of carpeting, the sale and installation of996
agricultural land tile, the sale and erection or installation of997
portable grain bins, or the provision of landscaping and lawn care998
service and the transfer of property as part of such service is999
never a construction contract. The transfer of copyrighted motion1000
picture films for exhibition purposes is not a sale, except such1001
films as are used solely for advertising purposes. Other than as1002
provided in this section, "sale" and "selling" do not include1003
transfers of interest in leased property where the original lessee1004
and the terms of the original lease agreement remain unchanged, or1005
professional, insurance, or personal service transactions that1006
involve the transfer of tangible personal property as an1007
inconsequential element, for which no separate charges are made.1008

       As used in division (B)(5) of this section:1009

       (a) "Agricultural land tile" means fired clay or concrete1010
tile, or flexible or rigid perforated plastic pipe or tubing,1011
incorporated or to be incorporated into a subsurface drainage1012
system appurtenant to land used or to be used directly in1013
production by farming, agriculture, horticulture, or floriculture.1014
The term does not include such materials when they are or are to1015
be incorporated into a drainage system appurtenant to a building1016
or structure even if the building or structure is used or to be1017
used in such production.1018

       (b) "Portable grain bin" means a structure that is used or to 1019
be used by a person engaged in farming or agriculture to shelter 1020
the person's grain and that is designed to be disassembled without 1021
significant damage to its component parts.1022

       (6) All transactions in which all of the shares of stock of a 1023
closely held corporation are transferred, if the corporation is1024
not engaging in business and its entire assets consist of boats,1025
planes, motor vehicles, or other tangible personal property1026
operated primarily for the use and enjoyment of the shareholders;1027

       (7) All transactions in which a warranty, maintenance or1028
service contract, or similar agreement by which the vendor of the1029
warranty, contract, or agreement agrees to repair or maintain the1030
tangible personal property of the consumer is or is to be1031
provided;1032

       (8) All transactions by which a prepaid authorization number1033
or a prepaid telephone calling card is or is to be transferred;1034

       (9) The transfer of copyrighted motion picture films used1035
solely for advertising purposes, except that the transfer of such1036
films for exhibition purposes is not a sale.1037

       Other than as provided in this section, "sale" and "selling"1038
do not include transfers of interest in leased property where the1039
original lessee and the terms of the original lease agreement1040
remain unchanged; the transportation of persons or property,1041
unless the transportation is by a private investigation and1042
security service; or professional, insurance, or personal service1043
transactions that involve the transfer of tangible personal1044
property as an inconsequential element, for which no separate1045
charges are made.1046

       (C) "Vendor" means the person providing the service or by1047
whom the transfer effected or license given by a sale is or is to1048
be made or given and, for sales described in division (B)(3)(i) of1049
this section, the telecommunications service vendor that provides1050
the nine hundred telephone service; if two or more persons are1051
engaged in business at the same place of business under a single1052
trade name in which all collections on account of sales by each1053
are made, such persons shall constitute a single vendor.1054

       Physicians, dentists, hospitals, and veterinarians who are1055
engaged in selling tangible personal property as received from1056
others, such as eyeglasses, mouthwashes, dentifrices, or similar1057
articles, are vendors. Veterinarians who are engaged in1058
transferring to others for a consideration drugs, the dispensing1059
of which does not require an order of a licensed veterinarian or1060
physician under federal law, are vendors.1061

       (D)(1) "Consumer" means the person for whom the service is1062
provided, to whom the transfer effected or license given by a sale1063
is or is to be made or given, to whom the service described in1064
division (B)(3)(f) or (i) of this section is charged, or to whom1065
the admission is granted.1066

       (2) Physicians, dentists, hospitals, and blood banks operated 1067
by nonprofit institutions and persons licensed to practice 1068
veterinary medicine, surgery, and dentistry are consumers of all 1069
tangible personal property and services purchased by them in 1070
connection with the practice of medicine, dentistry, the rendition 1071
of hospital or blood bank service, or the practice of veterinary 1072
medicine, surgery, and dentistry. In addition to being consumers 1073
of drugs administered by them or by their assistants according to 1074
their direction, veterinarians also are consumers of drugs that 1075
under federal law may be dispensed only by or upon the order of a 1076
licensed veterinarian or physician, when transferred by them to 1077
others for a consideration to provide treatment to animals as 1078
directed by the veterinarian.1079

       (3) A person who performs a facility management, or similar1080
service contract for a contractee is a consumer of all tangible1081
personal property and services purchased for use in connection1082
with the performance of such contract, regardless of whether title1083
to any such property vests in the contractee. The purchase of such 1084
property and services is not subject to the exception for resale 1085
under division (E)(1) of this section.1086

       (4)(a) In the case of a person who purchases printed matter1087
for the purpose of distributing it or having it distributed to the1088
public or to a designated segment of the public, free of charge,1089
that person is the consumer of that printed matter, and the1090
purchase of that printed matter for that purpose is a sale.1091

       (b) In the case of a person who produces, rather than1092
purchases, printed matter for the purpose of distributing it or1093
having it distributed to the public or to a designated segment of1094
the public, free of charge, that person is the consumer of all1095
tangible personal property and services purchased for use or1096
consumption in the production of that printed matter. That person1097
is not entitled to claim exception under division (E)(8) of this1098
section for any material incorporated into the printed matter or1099
any equipment, supplies, or services primarily used to produce the1100
printed matter.1101

       (c) The distribution of printed matter to the public or to a1102
designated segment of the public, free of charge, is not a sale to1103
the members of the public to whom the printed matter is1104
distributed or to any persons who purchase space in the printed1105
matter for advertising or other purposes.1106

       (5) A person who makes sales of any of the services listed in1107
division (B)(3) of this section is the consumer of any tangible1108
personal property used in performing the service. The purchase of1109
that property is not subject to the resale exception under1110
division (E)(1) of this section.1111

       (6) A person who engages in highway transportation for hire1112
is the consumer of all packaging materials purchased by that1113
person used in performing the service, except for packaging1114
materials sold by such person in a transaction separate from the1115
service.1116

       (E) "Retail sale" and "sales at retail" include all sales1117
except those in which the purpose of the consumer is:1118

       (1) To resell the thing transferred or benefit of the service 1119
provided, by a person engaging in business, in the form in which 1120
the same is, or is to be, received by the person;1121

       (2) To incorporate the thing transferred as a material or a1122
part, into tangible personal property to be produced for sale by1123
manufacturing, assembling, processing, or refining, or to use or1124
consume the thing transferred directly in producing a product for1125
sale by mining, including without limitation the extraction from1126
the earth of all substances that are classed geologically as1127
minerals, production of crude oil and natural gas, farming,1128
agriculture, horticulture, or floriculture, and persons engaged in1129
rendering farming, agricultural, horticultural, or floricultural1130
services, and services in the exploration for, and production of,1131
crude oil and natural gas, for others are deemed engaged directly1132
in farming, agriculture, horticulture, and floriculture, or1133
exploration for, and production of, crude oil and natural gas;1134
directly in the rendition of a public utility service, except that1135
the sales tax levied by section 5739.02 of the Revised Code shall1136
be collected upon all meals, drinks, and food for human1137
consumption sold upon Pullman and railroad coaches. This paragraph 1138
does not exempt or except from "retail sale" or "sales at retail" 1139
the sale of tangible personal property that is to be incorporated 1140
into a structure or improvement to real property.1141

       (3) To hold the thing transferred as security for the1142
performance of an obligation of the vendor;1143

       (4) To use or consume the thing transferred in the process of 1144
reclamation as required by Chapters 1513. and 1514. of the Revised 1145
Code;1146

       (5) To resell, hold, use, or consume the thing transferred as 1147
evidence of a contract of insurance;1148

       (6) To use or consume the thing directly in commercial1149
fishing;1150

       (7) To incorporate the thing transferred as a material or a1151
part into, or to use or consume the thing transferred directly in1152
the production of, magazines distributed as controlled circulation1153
publications;1154

       (8) To use or consume the thing transferred in the production 1155
and preparation in suitable condition for market and sale of 1156
printed, imprinted, overprinted, lithographic, multilithic, 1157
blueprinted, photostatic, or other productions or reproductions of 1158
written or graphic matter;1159

       (9) To use the thing transferred, as described in section1160
5739.011 of the Revised Code, primarily in a manufacturing1161
operation to produce tangible personal property for sale;1162

       (10) To use the benefit of a warranty, maintenance or service 1163
contract, or similar agreement, as defined in division (B)(7) of 1164
this section, to repair or maintain tangible personal property, if 1165
all of the property that is the subject of the warranty, contract, 1166
or agreement would be exempt on its purchase from the tax imposed 1167
by section 5739.02 of the Revised Code;1168

       (11) To use the thing transferred as qualified research and1169
development equipment;1170

       (12) To use or consume the thing transferred primarily in1171
storing, transporting, mailing, or otherwise handling purchased1172
sales inventory in a warehouse, distribution center, or similar1173
facility when the inventory is primarily distributed outside this1174
state to retail stores of the person who owns or controls the1175
warehouse, distribution center, or similar facility, to retail1176
stores of an affiliated group of which that person is a member, or1177
by means of direct marketing. Division (E)(12) of this section1178
does not apply to motor vehicles registered for operation on the1179
public highways. As used in division (E)(12) of this section,1180
"affiliated group" has the same meaning as in division (B)(3)(e)1181
of this section and "direct marketing" has the same meaning as in1182
division (B)(36)(35) of section 5739.02 of the Revised Code.1183

       (13) To use or consume the thing transferred to fulfill a1184
contractual obligation incurred by a warrantor pursuant to a1185
warranty provided as a part of the price of the tangible personal1186
property sold or by a vendor of a warranty, maintenance or service1187
contract, or similar agreement the provision of which is defined1188
as a sale under division (B)(7) of this section;1189

       (14) To use or consume the thing transferred in the1190
production of a newspaper for distribution to the public;1191

       (15) To use tangible personal property to perform a service1192
listed in division (B)(3) of this section, if the property is or1193
is to be permanently transferred to the consumer of the service as1194
an integral part of the performance of the service.1195

       As used in division (E) of this section, "thing" includes all1196
transactions included in divisions (B)(3)(a), (b), and (e) of this1197
section.1198

       Sales conducted through a coin-operated device that activates1199
vacuum equipment or equipment that dispenses water, whether or not1200
in combination with soap or other cleaning agents or wax, to the1201
consumer for the consumer's use on the premises in washing,1202
cleaning, or waxing a motor vehicle, provided no other personal1203
property or personal service is provided as part of the1204
transaction, are not retail sales or sales at retail.1205

       (F) "Business" includes any activity engaged in by any person 1206
with the object of gain, benefit, or advantage, either direct or 1207
indirect. "Business" does not include the activity of a person in 1208
managing and investing the person's own funds.1209

       (G) "Engaging in business" means commencing, conducting, or1210
continuing in business, and liquidating a business when the1211
liquidator thereof holds itself out to the public as conducting1212
such business. Making a casual sale is not engaging in business.1213

       (H)(1) "Price," except as provided in divisions (H)(2) and1214
(3) of this section, means the aggregate value in money of1215
anything paid or delivered, or promised to be paid or delivered,1216
in the complete performance of a retail sale, without any1217
deduction on account of the cost of the property sold, cost of1218
materials used, labor or service cost, interest, discount paid or1219
allowed after the sale is consummated, or any other expense. If1220
the retail sale consists of the rental or lease of tangible1221
personal property, "price" means the aggregate value in money of1222
anything paid or delivered, or promised to be paid or delivered,1223
in the complete performance of the rental or lease, without any1224
deduction for tax, interest, labor or service charge, damage1225
liability waiver, termination or damage charge, discount paid or1226
allowed after the lease is consummated, or any other expense. 1227
Except as provided in division (H)(4) of this section, the sales1228
tax shall be calculated and collected by the lessor on each1229
payment made by the lessee. "Price" does not include the1230
consideration received as a deposit refundable to the consumer1231
upon return of a beverage container, the consideration received as1232
a deposit on a carton or case that is used for such returnable1233
containers, or the consideration received as a refundable security1234
deposit for the use of tangible personal property to the extent1235
that it actually is refunded, if the consideration for such1236
refundable deposit is separately stated from the consideration1237
received or to be received for the tangible personal property1238
transferred in the retail sale. Such separation must appear in the 1239
sales agreement or on the initial invoice or initial billing1240
rendered by the vendor to the consumer. "Price" also does not1241
include delivery charges that are separately stated on the initial1242
invoice or initial billing rendered by the vendor. Price is the1243
amount received inclusive of the tax, provided the vendor1244
establishes to the satisfaction of the tax commissioner that the1245
tax was added to the price. When the price includes both a charge1246
for tangible personal property and a charge for providing a1247
service and the sale of the property and the charge for the1248
service are separately taxable, or have a separately determinable1249
tax status, the price shall be separately stated for each such1250
charge so the tax can be correctly computed and charged.1251

       The tax collected by the vendor from the consumer under this1252
chapter is not part of the price, but is a tax collection for the1253
benefit of the state and of counties levying an additional sales1254
tax pursuant to section 5739.021 or 5739.026 of the Revised Code1255
and of transit authorities levying an additional sales tax1256
pursuant to section 5739.023 of the Revised Code. Except for the1257
discount authorized in section 5739.12 of the Revised Code and the1258
effects of any rounding pursuant to section 5703.055 of the1259
Revised Code, no person other than the state or such a county or1260
transit authority shall derive any benefit from the collection or1261
payment of such tax.1262

       As used in division (H)(1) of this section, "delivery1263
charges" means charges by the vendor for preparation and delivery1264
to a location designated by the consumer of tangible personal1265
property or a service, including transportation, shipping,1266
postage, handling, crating, and packing.1267

       (2) In the case of a sale of any new motor vehicle by a new1268
motor vehicle dealer, as defined in section 4517.01 of the Revised1269
Code, in which another motor vehicle is accepted by the dealer as1270
part of the consideration received, "price" has the same meaning1271
as in division (H)(1) of this section, reduced by the credit1272
afforded the consumer by the dealer for the motor vehicle received1273
in trade.1274

       (3) In the case of a sale of any watercraft or outboard motor 1275
by a watercraft dealer licensed in accordance with section1276
1547.543 of the Revised Code, in which another watercraft,1277
watercraft and trailer, or outboard motor is accepted by the1278
dealer as part of the consideration received, "price" has the same1279
meaning as in division (H)(1) of this section, reduced by the1280
credit afforded the consumer by the dealer for the watercraft,1281
watercraft and trailer, or outboard motor received in trade.1282

       (4) In the case of the lease of any motor vehicle designed by 1283
the manufacturer to carry a load of not more than one ton,1284
watercraft, outboard motor, or aircraft, or the lease of any1285
tangible personal property, other than motor vehicles designed by1286
the manufacturer to carry a load of more than one ton, to be used1287
by the lessee primarily for business purposes, the sales tax shall1288
be collected by the vendor at the time the lease is consummated1289
and shall be calculated by the vendor on the basis of the total1290
amount to be paid by the lessee under the lease agreement. If the1291
total amount of the consideration for the lease includes amounts1292
that are not calculated at the time the lease is executed, the tax1293
shall be calculated and collected by the vendor at the time such1294
amounts are billed to the lessee. In the case of an open-end1295
lease, the sales tax shall be calculated by the vendor on the1296
basis of the total amount to be paid during the initial fixed term1297
of the lease, and then for each subsequent renewal period as it1298
comes due.1299

       As used in divisions (H)(3) and (4) of this section, "motor1300
vehicle" has the same meaning as in section 4501.01 of the Revised1301
Code, and "watercraft" includes an outdrive unit attached to the1302
watercraft.1303

       (I) "Receipts" means the total amount of the prices of the1304
sales of vendors, provided that cash discounts allowed and taken1305
on sales at the time they are consummated are not included, minus1306
any amount deducted as a bad debt pursuant to section 5739.121 of1307
the Revised Code. "Receipts" does not include the sale price of1308
property returned or services rejected by consumers when the full1309
sale price and tax are refunded either in cash or by credit.1310

       (J) "Place of business" means any location at which a person1311
engages in business.1312

       (K) "Premises" includes any real property or portion thereof1313
upon which any person engages in selling tangible personal1314
property at retail or making retail sales and also includes any1315
real property or portion thereof designated for, or devoted to,1316
use in conjunction with the business engaged in by such person.1317

       (L) "Casual sale" means a sale of an item of tangible1318
personal property that was obtained by the person making the sale, 1319
through purchase or otherwise, for the person's own use and was 1320
previously subject to any state's taxing jurisdiction on its sale 1321
or use, and includes such items acquired for the seller's use 1322
that are sold by an auctioneer employed directly by the person for1323
such purpose, provided the location of such sales is not the1324
auctioneer's permanent place of business. As used in this1325
division, "permanent place of business" includes any location1326
where such auctioneer has conducted more than two auctions during1327
the year.1328

       (M) "Hotel" means every establishment kept, used, maintained, 1329
advertised, or held out to the public to be a place where sleeping 1330
accommodations are offered to guests, in which five or more rooms 1331
are used for the accommodation of such guests, whether the rooms1332
are in one or several structures.1333

       (N) "Transient guests" means persons occupying a room or1334
rooms for sleeping accommodations for less than thirty consecutive1335
days.1336

       (O) "Making retail sales" means the effecting of transactions 1337
wherein one party is obligated to pay the price and the other 1338
party is obligated to provide a service or to transfer title to or 1339
possession of the item sold. "Making retail sales" does not 1340
include the preliminary acts of promoting or soliciting the retail 1341
sales, other than the distribution of printed matter which 1342
displays or describes and prices the item offered for sale, nor 1343
does it include delivery of a predetermined quantity of tangible 1344
personal property or transportation of property or personnel to or 1345
from a place where a service is performed, regardless of whether 1346
the vendor is a delivery vendor.1347

       (P) "Used directly in the rendition of a public utility1348
service" means that property which is to be incorporated into and1349
will become a part of the consumer's production, transmission,1350
transportation, or distribution system and that retains its1351
classification as tangible personal property after such1352
incorporation; fuel or power used in the production, transmission,1353
transportation, or distribution system; and tangible personal1354
property used in the repair and maintenance of the production,1355
transmission, transportation, or distribution system, including1356
only such motor vehicles as are specially designed and equipped1357
for such use. Tangible personal property and services used1358
primarily in providing highway transportation for hire are not1359
used in providing a public utility service as defined in this1360
division.1361

       (Q) "Refining" means removing or separating a desirable1362
product from raw or contaminated materials by distillation or1363
physical, mechanical, or chemical processes.1364

       (R) "Assembly" and "assembling" mean attaching or fitting1365
together parts to form a product, but do not include packaging a1366
product.1367

       (S) "Manufacturing operation" means a process in which1368
materials are changed, converted, or transformed into a different1369
state or form from which they previously existed and includes1370
refining materials, assembling parts, and preparing raw materials1371
and parts by mixing, measuring, blending, or otherwise committing1372
such materials or parts to the manufacturing process.1373
"Manufacturing operation" does not include packaging.1374

       (T) "Fiscal officer" means, with respect to a regional1375
transit authority, the secretary-treasurer thereof, and with1376
respect to a county that is a transit authority, the fiscal1377
officer of the county transit board if one is appointed pursuant1378
to section 306.03 of the Revised Code or the county auditor if the1379
board of county commissioners operates the county transit system.1380

       (U) "Transit authority" means a regional transit authority1381
created pursuant to section 306.31 of the Revised Code or a county1382
in which a county transit system is created pursuant to section1383
306.01 of the Revised Code. For the purposes of this chapter, a1384
transit authority must extend to at least the entire area of a1385
single county. A transit authority that includes territory in more 1386
than one county must include all the area of the most populous 1387
county that is a part of such transit authority. County population 1388
shall be measured by the most recent census taken by the United 1389
States census bureau.1390

       (V) "Legislative authority" means, with respect to a regional 1391
transit authority, the board of trustees thereof, and with respect 1392
to a county that is a transit authority, the board of county 1393
commissioners.1394

       (W) "Territory of the transit authority" means all of the1395
area included within the territorial boundaries of a transit1396
authority as they from time to time exist. Such territorial1397
boundaries must at all times include all the area of a single1398
county or all the area of the most populous county that is a part1399
of such transit authority. County population shall be measured by1400
the most recent census taken by the United States census bureau.1401

       (X) "Providing a service" means providing or furnishing1402
anything described in division (B)(3) of this section for1403
consideration.1404

       (Y)(1)(a) "Automatic data processing" means processing of1405
others' data, including keypunching or similar data entry services1406
together with verification thereof, or providing access to1407
computer equipment for the purpose of processing data.1408

       (b) "Computer services" means providing services consisting1409
of specifying computer hardware configurations and evaluating1410
technical processing characteristics, computer programming, and1411
training of computer programmers and operators, provided in1412
conjunction with and to support the sale, lease, or operation of1413
taxable computer equipment or systems.1414

       (c) "Electronic information services" means providing access1415
to computer equipment by means of telecommunications equipment for1416
the purpose of either of the following:1417

       (i) Examining or acquiring data stored in or accessible to1418
the computer equipment;1419

       (ii) Placing data into the computer equipment to be retrieved 1420
by designated recipients with access to the computer equipment.1421

       (d) "Automatic data processing, computer services, or1422
electronic information services" shall not include personal or1423
professional services.1424

       (2) As used in divisions (B)(3)(e) and (Y)(1) of this1425
section, "personal and professional services" means all services1426
other than automatic data processing, computer services, or1427
electronic information services, including but not limited to:1428

       (a) Accounting and legal services such as advice on tax1429
matters, asset management, budgetary matters, quality control,1430
information security, and auditing and any other situation where1431
the service provider receives data or information and studies,1432
alters, analyzes, interprets, or adjusts such material;1433

       (b) Analyzing business policies and procedures;1434

       (c) Identifying management information needs;1435

       (d) Feasibility studies, including economic and technical1436
analysis of existing or potential computer hardware or software1437
needs and alternatives;1438

       (e) Designing policies, procedures, and custom software for1439
collecting business information, and determining how data should1440
be summarized, sequenced, formatted, processed, controlled, and1441
reported so that it will be meaningful to management;1442

       (f) Developing policies and procedures that document how1443
business events and transactions are to be authorized, executed,1444
and controlled;1445

       (g) Testing of business procedures;1446

       (h) Training personnel in business procedure applications;1447

       (i) Providing credit information to users of such information 1448
by a consumer reporting agency, as defined in the "Fair Credit 1449
Reporting Act," 84 Stat. 1114, 1129 (1970), 15 U.S.C. 1681a(f), or 1450
as hereafter amended, including but not limited to gathering, 1451
organizing, analyzing, recording, and furnishing such information 1452
by any oral, written, graphic, or electronic medium;1453

       (j) Providing debt collection services by any oral, written,1454
graphic, or electronic means.1455

       The services listed in divisions (Y)(2)(a) to (j) of this1456
section are not automatic data processing or computer services.1457

       (Z) "Highway transportation for hire" means the1458
transportation of personal property belonging to others for1459
consideration by any of the following:1460

       (1) The holder of a permit or certificate issued by this1461
state or the United States authorizing the holder to engage in1462
transportation of personal property belonging to others for1463
consideration over or on highways, roadways, streets, or any1464
similar public thoroughfare;1465

       (2) A person who engages in the transportation of personal1466
property belonging to others for consideration over or on1467
highways, roadways, streets, or any similar public thoroughfare1468
but who could not have engaged in such transportation on December1469
11, 1985, unless the person was the holder of a permit or1470
certificate of the types described in division (Z)(1) of this1471
section;1472

       (3) A person who leases a motor vehicle to and operates it1473
for a person described by division (Z)(1) or (2) of this section.1474

       (AA) "Telecommunications service" means the transmission of1475
any interactive, two-way electromagnetic communications, including1476
voice, image, data, and information, through the use of any medium1477
such as wires, cables, microwaves, cellular radio, radio waves,1478
light waves, or any combination of those or similar media.1479
"Telecommunications service" includes message toll service even1480
though the vendor provides the message toll service by means of1481
wide area transmission type service or private communications1482
service purchased from another telecommunications service1483
provider, but does not include any of the following:1484

       (1) Sales of incoming or outgoing wide area transmission1485
service or wide area transmission type service, including eight1486
hundred or eight-hundred-type service, to the person contracting1487
for the receipt of that service;1488

       (2) Sales of private communications service to the person1489
contracting for the receipt of that service that entitles the1490
purchaser to exclusive or priority use of a communications channel1491
or group of channels between exchanges;1492

       (3) Sales of telecommunications service by companies subject1493
to the excise tax imposed by Chapter 5727. of the Revised Code;1494

       (4) Sales of telecommunications service to a provider of1495
telecommunications service, including access services, for use in1496
providing telecommunications service;1497

       (5) Value-added nonvoice services in which computer1498
processing applications are used to act on the form, content,1499
code, or protocol of the information to be transmitted;1500

       (6) Transmission of interactive video programming by a cable1501
television system as defined in section 505.90 of the Revised1502
Code;1503

       (7) After July 31, 2002, mobile telecommunications service.1504

       (BB) "Industrial laundry cleaning services" means removing1505
soil or dirt from or supplying towels, linens, or articles of1506
clothing that belong to others and are used in a trade or1507
business.1508

       (CC) "Magazines distributed as controlled circulation1509
publications" means magazines containing at least twenty-four1510
pages, at least twenty-five per cent editorial content, issued at1511
regular intervals four or more times a year, and circulated1512
without charge to the recipient, provided that such magazines are1513
not owned or controlled by individuals or business concerns which1514
conduct such publications as an auxiliary to, and essentially for1515
the advancement of the main business or calling of, those who own1516
or control them.1517

       (DD) "Landscaping and lawn care service" means the services1518
of planting, seeding, sodding, removing, cutting, trimming,1519
pruning, mulching, aerating, applying chemicals, watering,1520
fertilizing, and providing similar services to establish, promote,1521
or control the growth of trees, shrubs, flowers, grass, ground1522
cover, and other flora, or otherwise maintaining a lawn or1523
landscape grown or maintained by the owner for ornamentation or1524
other nonagricultural purpose. However, "landscaping and lawn care 1525
service" does not include the providing of such services by a1526
person who has less than five thousand dollars in sales of such1527
services during the calendar year.1528

       (EE) "Private investigation and security service" means the1529
performance of any activity for which the provider of such service1530
is required to be licensed pursuant to Chapter 4749. of the1531
Revised Code, or would be required to be so licensed in performing1532
such services in this state, and also includes the services of1533
conducting polygraph examinations and of monitoring or overseeing1534
the activities on or in, or the condition of, the consumer's home,1535
business, or other facility by means of electronic or similar1536
monitoring devices. "Private investigation and security service"1537
does not include special duty services provided by off-duty police1538
officers, deputy sheriffs, and other peace officers regularly1539
employed by the state or a political subdivision.1540

       (FF) "Information services" means providing conversation,1541
giving consultation or advice, playing or making a voice or other1542
recording, making or keeping a record of the number of callers,1543
and any other service provided to a consumer by means of a nine1544
hundred telephone call, except when the nine hundred telephone1545
call is the means by which the consumer makes a contribution to a1546
recognized charity.1547

       (GG) "Research and development" means designing, creating, or 1548
formulating new or enhanced products, equipment, or manufacturing 1549
processes, and also means conducting scientific or technological 1550
inquiry and experimentation in the physical sciences with the goal 1551
of increasing scientific knowledge which may reveal the bases for 1552
new or enhanced products, equipment, or manufacturing processes.1553

       (HH) "Qualified research and development equipment" means1554
capitalized tangible personal property, and leased personal1555
property that would be capitalized if purchased, used by a person1556
primarily to perform research and development. Tangible personal1557
property primarily used in testing, as defined in division (A)(4)1558
of section 5739.011 of the Revised Code, or used for recording or1559
storing test results, is not qualified research and development1560
equipment unless such property is primarily used by the consumer1561
in testing the product, equipment, or manufacturing process being1562
created, designed, or formulated by the consumer in the research1563
and development activity or in recording or storing such test1564
results.1565

       (II) "Building maintenance and janitorial service" means1566
cleaning the interior or exterior of a building and any tangible1567
personal property located therein or thereon, including any1568
services incidental to such cleaning for which no separate charge1569
is made. However, "building maintenance and janitorial service"1570
does not include the providing of such service by a person who has1571
less than five thousand dollars in sales of such service during1572
the calendar year.1573

       (JJ) "Employment service" means providing or supplying1574
personnel, on a temporary or long-term basis, to perform work or1575
labor under the supervision or control of another, when the1576
personnel so supplied receive their wages, salary, or other1577
compensation from the provider of the service. "Employment1578
service" does not include:1579

       (1) Acting as a contractor or subcontractor, where the1580
personnel performing the work are not under the direct control of1581
the purchaser.1582

       (2) Medical and health care services.1583

       (3) Supplying personnel to a purchaser pursuant to a contract 1584
of at least one year between the service provider and the1585
purchaser that specifies that each employee covered under the1586
contract is assigned to the purchaser on a permanent basis.1587

       (4) Transactions between members of an affiliated group, as1588
defined in division (B)(3)(e) of this section.1589

       (KK) "Employment placement service" means locating or finding 1590
employment for a person or finding or locating an employee to fill 1591
an available position.1592

       (LL) "Exterminating service" means eradicating or attempting1593
to eradicate vermin infestations from a building or structure, or1594
the area surrounding a building or structure, and includes1595
activities to inspect, detect, or prevent vermin infestation of a1596
building or structure.1597

       (MM) "Physical fitness facility service" means all1598
transactions by which a membership is granted, maintained, or1599
renewed, including initiation fees, membership dues, renewal fees,1600
monthly minimum fees, and other similar fees and dues, by a1601
physical fitness facility such as an athletic club, health spa, or1602
gymnasium, which entitles the member to use the facility for1603
physical exercise.1604

       (NN) "Recreation and sports club service" means all1605
transactions by which a membership is granted, maintained, or1606
renewed, including initiation fees, membership dues, renewal fees,1607
monthly minimum fees, and other similar fees and dues, by a1608
recreation and sports club, which entitles the member to use the1609
facilities of the organization. "Recreation and sports club" means 1610
an organization that has ownership of, or controls or leases on a 1611
continuing, long-term basis, the facilities used by its members 1612
and includes an aviation club, gun or shooting club, yacht club, 1613
card club, swimming club, tennis club, golf club, country club, 1614
riding club, amateur sports club, or similar organization.1615

       (OO) "Livestock" means farm animals commonly raised for food1616
or food production, and includes but is not limited to cattle,1617
sheep, goats, swine, and poultry. "Livestock" does not include1618
invertebrates, fish, amphibians, reptiles, horses, domestic pets,1619
animals for use in laboratories or for exhibition, or other1620
animals not commonly raised for food or food production.1621

       (PP) "Livestock structure" means a building or structure used 1622
exclusively for the housing, raising, feeding, or sheltering of 1623
livestock, and includes feed storage or handling structures and1624
structures for livestock waste handling.1625

       (QQ) "Horticulture" means the growing, cultivation, and1626
production of flowers, fruits, herbs, vegetables, sod, mushrooms,1627
and nursery stock. As used in this division, "nursery stock" has1628
the same meaning as in section 927.51 of the Revised Code.1629

       (RR) "Horticulture structure" means a building or structure1630
used exclusively for the commercial growing, raising, or1631
overwintering of horticultural products, and includes the area1632
used for stocking, storing, and packing horticultural products1633
when done in conjunction with the production of those products.1634

       (SS) "Newspaper" means an unbound publication bearing a title 1635
or name that is regularly published, at least as frequently as 1636
biweekly, and distributed from a fixed place of business to the1637
public in a specific geographic area, and that contains a1638
substantial amount of news matter of international, national, or1639
local events of interest to the general public.1640

       (TT) "Professional racing team" means a person that employs1641
at least twenty full-time employees for the purpose of conducting1642
a motor vehicle racing business for profit. The person must1643
conduct the business with the purpose of racing one or more motor1644
racing vehicles in at least ten competitive professional racing1645
events each year that comprise all or part of a motor racing1646
series sanctioned by one or more motor racing sanctioning1647
organizations. A "motor racing vehicle" means a vehicle for which1648
the chassis, engine, and parts are designed exclusively for motor1649
racing, and does not include a stock or production model vehicle1650
that may be modified for use in racing. For the purposes of this1651
division:1652

       (1) A "competitive professional racing event" is a motor1653
vehicle racing event sanctioned by one or more motor racing1654
sanctioning organizations, at which aggregate cash prizes in1655
excess of eight hundred thousand dollars are awarded to the1656
competitors.1657

       (2) "Full-time employee" means an individual who is employed1658
for consideration for thirty-five or more hours a week, or who1659
renders any other standard of service generally accepted by custom1660
or specified by contract as full-time employment.1661

       (UU)(1) "Prepaid authorization number" means a numeric or1662
alphanumeric combination that represents a prepaid account that1663
can be used by the account holder solely to obtain1664
telecommunications service, and includes any renewals or increases1665
in the prepaid account.1666

       (2) "Prepaid telephone calling card" means a tangible item1667
that contains a prepaid authorization number that can be used1668
solely to obtain telecommunications service, and includes any1669
renewals or increases in the prepaid account.1670

       (VV) "Lease" means any transfer for a consideration of the1671
possession of and right to use, but not title to, tangible1672
personal property for a fixed period of time greater than thirty1673
days or for an open-ended period of time with a minimum fixed1674
period of more than thirty days.1675

       (WW) "Mobile telecommunications service" has the same meaning 1676
as in the "Mobile Telecommunications Sourcing Act," Pub. L. No. 1677
106-252, 114 Stat. 631 (2000), 4 U.S.C.A. 124(7), as amended.1678

       (XX) "Certified service provider" has the same meaning as in1679
section 5740.01 of the Revised Code.1680

       Sec. 5739.02.  For the purpose of providing revenue with1681
which to meet the needs of the state, for the use of the general1682
revenue fund of the state, for the purpose of securing a thorough1683
and efficient system of common schools throughout the state, for1684
the purpose of affording revenues, in addition to those from1685
general property taxes, permitted under constitutional1686
limitations, and from other sources, for the support of local1687
governmental functions, and for the purpose of reimbursing the1688
state for the expense of administering this chapter, an excise tax1689
is hereby levied on each retail sale made in this state.1690

       (A) The tax shall be collected pursuant to the schedules in1691
section 5739.025 of the Revised Code.1692

       The tax applies and is collectible when the sale is made,1693
regardless of the time when the price is paid or delivered.1694

       In the case of a sale, the price of which consists in whole1695
or in part of rentals for the use of the thing transferred, the1696
tax, as regards those rentals, shall be measured by the1697
installments of those rentals.1698

       In the case of a sale of a service defined under division1699
(MM) or (NN) of section 5739.01 of the Revised Code, the price of1700
which consists in whole or in part of a membership for the receipt1701
of the benefit of the service, the tax applicable to the sale1702
shall be measured by the installments thereof.1703

       (B) The tax does not apply to the following:1704

       (1) Sales to the state or any of its political subdivisions,1705
or to any other state or its political subdivisions if the laws of1706
that state exempt from taxation sales made to this state and its1707
political subdivisions;1708

       (2) Sales of food for human consumption off the premises1709
where sold;1710

       (3) Sales of food sold to students only in a cafeteria,1711
dormitory, fraternity, or sorority maintained in a private,1712
public, or parochial school, college, or university;1713

       (4) Sales of newspapers and of magazine subscriptions and1714
sales or transfers of magazines distributed as controlled1715
circulation publications;1716

       (5) The furnishing, preparing, or serving of meals without1717
charge by an employer to an employee provided the employer records1718
the meals as part compensation for services performed or work1719
done;1720

       (6) Sales of motor fuel upon receipt, use, distribution, or1721
sale of which in this state a tax is imposed by the law of this1722
state, but this exemption shall not apply to the sale of motor1723
fuel on which a refund of the tax is allowable under section1724
5735.14 of the Revised Code; and the tax commissioner may deduct1725
the amount of tax levied by this section applicable to the price1726
of motor fuel when granting a refund of motor fuel tax pursuant to1727
section 5735.14 of the Revised Code and shall cause the amount1728
deducted to be paid into the general revenue fund of this state;1729

       (7) Sales of natural gas by a natural gas company, of water1730
by a water-works company, or of steam by a heating company, if in1731
each case the thing sold is delivered to consumers through pipes1732
or conduits, and all sales of communications services by a1733
telephone or telegraph company, all terms as defined in section1734
5727.01 of the Revised Code;1735

       (8) Casual sales by a person, or auctioneer employed directly 1736
by the person to conduct such sales, except as to such sales of1737
motor vehicles, watercraft or outboard motors required to be1738
titled under section 1548.06 of the Revised Code, watercraft1739
documented with the United States coast guard, snowmobiles, and1740
all-purpose vehicles as defined in section 4519.01 of the Revised1741
Code;1742

       (9) Sales of services or tangible personal property, other1743
than motor vehicles, mobile homes, and manufactured homes, by1744
churches, organizations exempt from taxation under section1745
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit1746
organizations operated exclusively for charitable purposes as1747
defined in division (B)(12) of this section, provided that the1748
number of days on which such tangible personal property or1749
services, other than items never subject to the tax, are sold does1750
not exceed six in any calendar year. If the number of days on1751
which such sales are made exceeds six in any calendar year, the1752
church or organization shall be considered to be engaged in1753
business and all subsequent sales by it shall be subject to the1754
tax. In counting the number of days, all sales by groups within a1755
church or within an organization shall be considered to be sales1756
of that church or organization, except that sales made by separate1757
student clubs and other groups of students of a primary or1758
secondary school, and sales made by a parent-teacher association,1759
booster group, or similar organization that raises money to1760
support or fund curricular or extracurricular activities of a1761
primary or secondary school, shall not be considered to be sales1762
of such school, and sales by each such club, group, association,1763
or organization shall be counted separately for purposes of the1764
six-day limitation. This division does not apply to sales by a1765
noncommercial educational radio or television broadcasting1766
station.1767

       (10) Sales not within the taxing power of this state under1768
the Constitution of the United States;1769

       (11) The transportation of persons or property, unless the1770
transportation is by a private investigation and security service;1771

       (12) Sales of tangible personal property or services to1772
churches, to organizations exempt from taxation under section1773
501(c)(3) of the Internal Revenue Code of 1986, and to any other1774
nonprofit organizations operated exclusively for charitable1775
purposes in this state, no part of the net income of which inures1776
to the benefit of any private shareholder or individual, and no1777
substantial part of the activities of which consists of carrying1778
on propaganda or otherwise attempting to influence legislation;1779
sales to offices administering one or more homes for the aged or1780
one or more hospital facilities exempt under section 140.08 of the1781
Revised Code; and sales to organizations described in division (D)1782
of section 5709.12 of the Revised Code.1783

       "Charitable purposes" means the relief of poverty; the1784
improvement of health through the alleviation of illness, disease,1785
or injury; the operation of an organization exclusively for the1786
provision of professional, laundry, printing, and purchasing1787
services to hospitals or charitable institutions; the operation of1788
a home for the aged, as defined in section 5701.13 of the Revised1789
Code; the operation of a radio or television broadcasting station1790
that is licensed by the federal communications commission as a1791
noncommercial educational radio or television station; the1792
operation of a nonprofit animal adoption service or a county1793
humane society; the promotion of education by an institution of1794
learning that maintains a faculty of qualified instructors,1795
teaches regular continuous courses of study, and confers a1796
recognized diploma upon completion of a specific curriculum; the1797
operation of a parent-teacher association, booster group, or1798
similar organization primarily engaged in the promotion and1799
support of the curricular or extracurricular activities of a1800
primary or secondary school; the operation of a community or area1801
center in which presentations in music, dramatics, the arts, and1802
related fields are made in order to foster public interest and1803
education therein; the production of performances in music,1804
dramatics, and the arts; or the promotion of education by an1805
organization engaged in carrying on research in, or the1806
dissemination of, scientific and technological knowledge and1807
information primarily for the public.1808

       Nothing in this division shall be deemed to exempt sales to1809
any organization for use in the operation or carrying on of a1810
trade or business, or sales to a home for the aged for use in the1811
operation of independent living facilities as defined in division1812
(A) of section 5709.12 of the Revised Code.1813

       (13)(12) Building and construction materials and services1814
sold to construction contractors for incorporation into a1815
structure or improvement to real property under a construction1816
contract with this state or a political subdivision of this state, 1817
or with the United States government or any of its agencies; 1818
building and construction materials and services sold to1819
construction contractors for incorporation into a structure or1820
improvement to real property that are accepted for ownership by1821
this state or any of its political subdivisions, or by the United1822
States government or any of its agencies at the time of completion1823
of the structures or improvements; building and construction1824
materials sold to construction contractors for incorporation into1825
a horticulture structure or livestock structure for a person1826
engaged in the business of horticulture or producing livestock;1827
building materials and services sold to a construction contractor1828
for incorporation into a house of public worship or religious1829
education, or a building used exclusively for charitable purposes1830
under a construction contract with an organization whose purpose1831
is as described in division (B)(12)(11) of this section; building1832
materials and services sold to a construction contractor for1833
incorporation into a building under a construction contract with1834
an organization exempt from taxation under section 501(c)(3) of1835
the Internal Revenue Code of 1986 when the building is to be used1836
exclusively for the organization's exempt purposes; building and1837
construction materials sold for incorporation into the original1838
construction of a sports facility under section 307.696 of the1839
Revised Code; and building and construction materials and services1840
sold to a construction contractor for incorporation into real1841
property outside this state if such materials and services, when1842
sold to a construction contractor in the state in which the real1843
property is located for incorporation into real property in that1844
state, would be exempt from a tax on sales levied by that state;1845

       (14)(13) Sales of ships or vessels or rail rolling stock used 1846
or to be used principally in interstate or foreign commerce, and1847
repairs, alterations, fuel, and lubricants for such ships or1848
vessels or rail rolling stock;1849

       (15)(14) Sales to persons primarily engaged in any of the1850
activities mentioned in division (E)(2) or (9) of section 5739.011851
of the Revised Code, to persons engaged in making retail sales, or1852
to persons who purchase for sale from a manufacturer tangible1853
personal property that was produced by the manufacturer in1854
accordance with specific designs provided by the purchaser, of1855
packages, including material, labels, and parts for packages, and1856
of machinery, equipment, and material for use primarily in1857
packaging tangible personal property produced for sale, including1858
any machinery, equipment, and supplies used to make labels or1859
packages, to prepare packages or products for labeling, or to1860
label packages or products, by or on the order of the person doing1861
the packaging, or sold at retail. "Packages" includes bags,1862
baskets, cartons, crates, boxes, cans, bottles, bindings,1863
wrappings, and other similar devices and containers, and1864
"packaging"but does not include motor vehicles or bulk tanks,1865
trailers, or similar devices attached to motor vehicles.1866
"Packaging" means placing thereinin a package. Division (B)(14) 1867
of this section does not apply to persons engaged in highway 1868
transportation for hire.1869

       (16)(15) Sales of food to persons using food stamp benefits1870
to purchase the food. As used in division (B)(16)(15) of this1871
section, "food" has the same meaning as in the "Food Stamp Act of1872
1977," 91 Stat. 958, 7 U.S.C. 2012, as amended, and federal1873
regulations adopted pursuant to that act.1874

       (17)(16) Sales to persons engaged in farming, agriculture,1875
horticulture, or floriculture, of tangible personal property for1876
use or consumption directly in the production by farming,1877
agriculture, horticulture, or floriculture of other tangible1878
personal property for use or consumption directly in the1879
production of tangible personal property for sale by farming,1880
agriculture, horticulture, or floriculture; or material and parts1881
for incorporation into any such tangible personal property for use1882
or consumption in production; and of tangible personal property1883
for such use or consumption in the conditioning or holding of1884
products produced by and for such use, consumption, or sale by1885
persons engaged in farming, agriculture, horticulture, or1886
floriculture, except where such property is incorporated into real1887
property;1888

       (18)(17) Sales of drugs dispensed by a licensed pharmacist1889
upon the order of a licensed health professional authorized to1890
prescribe drugs to a human being, as the term "licensed health1891
professional authorized to prescribe drugs" is defined in section1892
4729.01 of the Revised Code; insulin as recognized in the official1893
United States pharmacopoeia; urine and blood testing materials1894
when used by diabetics or persons with hypoglycemia to test for1895
glucose or acetone; hypodermic syringes and needles when used by1896
diabetics for insulin injections; epoetin alfa when purchased for1897
use in the treatment of persons with end-stage renal disease;1898
hospital beds when purchased for use by persons with medical1899
problems for medical purposes; and oxygen and oxygen-dispensing1900
equipment when purchased for use by persons with medical problems1901
for medical purposes;1902

       (19)(18)(a) Sales of artificial limbs or portion thereof,1903
breast prostheses, and other prosthetic devices for humans; braces1904
or other devices for supporting weakened or nonfunctioning parts1905
of the human body; crutches or other devices to aid human1906
perambulation; and items of tangible personal property used to1907
supplement impaired functions of the human body such as1908
respiration, hearing, or elimination;1909

       (b) Sales of wheelchairs; items incorporated into or used in1910
conjunction with a motor vehicle for the purpose of transporting1911
wheelchairs, other than transportation conducted in connection1912
with the sale or delivery of wheelchairs; and items incorporated1913
into or used in conjunction with a motor vehicle that are1914
specifically designed to assist a person with a disability to1915
access or operate the motor vehicle. As used in this division,1916
"person with a disability" means any person who has lost the use1917
of one or both legs or one or both arms, who is blind, deaf, or1918
disabled to the extent that the person is unable to move about1919
without the aid of crutches or a wheelchair, or whose mobility is1920
restricted by a permanent cardiovascular, pulmonary, or other1921
disabling condition.1922

       (c) No exemption under this division shall be allowed for1923
nonprescription drugs, medicines, or remedies; items or devices1924
used to supplement vision; items or devices whose function is1925
solely or primarily cosmetic; or physical fitness equipment. This1926
division does not apply to sales to a physician or medical1927
facility for use in the treatment of a patient.1928

       (20)(19) Sales of emergency and fire protection vehicles and1929
equipment to nonprofit organizations for use solely in providing1930
fire protection and emergency services, including trauma care and1931
emergency medical services, for political subdivisions of the1932
state;1933

       (21)(20) Sales of tangible personal property manufactured in1934
this state, if sold by the manufacturer in this state to a1935
retailer for use in the retail business of the retailer outside of1936
this state and if possession is taken from the manufacturer by the1937
purchaser within this state for the sole purpose of immediately1938
removing the same from this state in a vehicle owned by the1939
purchaser;1940

       (22)(21) Sales of services provided by the state or any of1941
its political subdivisions, agencies, instrumentalities,1942
institutions, or authorities, or by governmental entities of the1943
state or any of its political subdivisions, agencies,1944
instrumentalities, institutions, or authorities;1945

       (23)(22) Sales of motor vehicles to nonresidents of this1946
state upon the presentation of an affidavit executed in this state1947
by the nonresident purchaser affirming that the purchaser is a1948
nonresident of this state, that possession of the motor vehicle is1949
taken in this state for the sole purpose of immediately removing1950
it from this state, that the motor vehicle will be permanently1951
titled and registered in another state, and that the motor vehicle1952
will not be used in this state;1953

       (24)(23) Sales to persons engaged in the preparation of eggs1954
for sale of tangible personal property used or consumed directly1955
in such preparation, including such tangible personal property1956
used for cleaning, sanitizing, preserving, grading, sorting, and1957
classifying by size; packages, including material and parts for1958
packages, and machinery, equipment, and material for use in1959
packaging eggs for sale; and handling and transportation equipment1960
and parts therefor, except motor vehicles licensed to operate on1961
public highways, used in intraplant or interplant transfers or1962
shipment of eggs in the process of preparation for sale, when the1963
plant or plants within or between which such transfers or1964
shipments occur are operated by the same person. "Packages"1965
includes containers, cases, baskets, flats, fillers, filler flats,1966
cartons, closure materials, labels, and labeling materials, and1967
"packaging" means placing therein.1968

       (25)(24)(a) Sales of water to a consumer for residential use,1969
except the sale of bottled water, distilled water, mineral water,1970
carbonated water, or ice;1971

       (b) Sales of water by a nonprofit corporation engaged1972
exclusively in the treatment, distribution, and sale of water to1973
consumers, if such water is delivered to consumers through pipes1974
or tubing.1975

       (26)(25) Fees charged for inspection or reinspection of motor1976
vehicles under section 3704.14 of the Revised Code;1977

       (27)(26) Sales to persons licensed to conduct a food service1978
operation pursuant to section 3717.43 of the Revised Code, of1979
tangible personal property primarily used directly for the1980
following:1981

       (a) To prepare food for human consumption for sale;1982

       (b) To preserve food that has been or will be prepared for1983
human consumption for sale by the food service operator, not1984
including tangible personal property used to display food for1985
selection by the consumer;1986

       (c) To clean tangible personal property used to prepare or1987
serve food for human consumption for sale.1988

       (28)(27) Sales of animals by nonprofit animal adoption1989
services or county humane societies;1990

       (29)(28) Sales of services to a corporation described in1991
division (A) of section 5709.72 of the Revised Code, and sales of1992
tangible personal property that qualifies for exemption from1993
taxation under section 5709.72 of the Revised Code;1994

       (30)(29) Sales and installation of agricultural land tile, as1995
defined in division (B)(5)(a) of section 5739.01 of the Revised1996
Code;1997

       (31)(30) Sales and erection or installation of portable grain1998
bins, as defined in division (B)(5)(b) of section 5739.01 of the1999
Revised Code;2000

       (32)(31) The sale, lease, repair, and maintenance of, parts2001
for, or items attached to or incorporated in, motor vehicles that2002
are primarily used for transporting tangible personal property2003
belonging to others by a person engaged in highway transportation2004
for hire, except for packages and packaging used for the2005
transportation of tangible personal property;2006

       (33)(32) Sales to the state headquarters of any veterans'2007
organization in this state that is either incorporated and issued2008
a charter by the congress of the United States or is recognized by2009
the United States veterans administration, for use by the2010
headquarters;2011

       (34)(33) Sales to a telecommunications service vendor of2012
tangible personal property and services used directly and2013
primarily in transmitting, receiving, switching, or recording any2014
interactive, two-way electromagnetic communications, including2015
voice, image, data, and information, through the use of any2016
medium, including, but not limited to, poles, wires, cables,2017
switching equipment, computers, and record storage devices and2018
media, and component parts for the tangible personal property. 2019
The exemption provided in division (B)(34)(33) of this section2020
shall be in lieu of all other exceptions under division (E)(2) of2021
section 5739.01 of the Revised Code to which a telecommunications2022
service vendor may otherwise be entitled based upon the use of the2023
thing purchased in providing the telecommunications service.2024

       (35)(34) Sales of investment metal bullion and investment2025
coins. "Investment metal bullion" means any elementary precious2026
metal that has been put through a process of smelting or refining,2027
including, but not limited to, gold, silver, platinum, and2028
palladium, and which is in such state or condition that its value2029
depends upon its content and not upon its form. "Investment metal2030
bullion" does not include fabricated precious metal that has been2031
processed or manufactured for one or more specific and customary2032
industrial, professional, or artistic uses. "Investment coins"2033
means numismatic coins or other forms of money and legal tender2034
manufactured of gold, silver, platinum, palladium, or other metal2035
under the laws of the United States or any foreign nation with a2036
fair market value greater than any statutory or nominal value of2037
such coins.2038

       (36)(35)(a) Sales where the purpose of the consumer is to use2039
or consume the things transferred in making retail sales and2040
consisting of newspaper inserts, catalogues, coupons, flyers, gift2041
certificates, or other advertising material that prices and2042
describes tangible personal property offered for retail sale.2043

       (b) Sales to direct marketing vendors of preliminary2044
materials such as photographs, artwork, and typesetting that will2045
be used in printing advertising material; of printed matter that2046
offers free merchandise or chances to win sweepstake prizes and2047
that is mailed to potential customers with advertising material2048
described in division (B)(36)(35)(a) of this section; and of2049
equipment such as telephones, computers, facsimile machines, and2050
similar tangible personal property primarily used to accept orders2051
for direct marketing retail sales.2052

       (c) Sales of automatic food vending machines that preserve2053
food with a shelf life of forty-five days or less by refrigeration2054
and dispense it to the consumer.2055

       For purposes of division (B)(36)(35) of this section, "direct2056
marketing" means the method of selling where consumers order2057
tangible personal property by United States mail, delivery2058
service, or telecommunication and the vendor delivers or ships the2059
tangible personal property sold to the consumer from a warehouse,2060
catalogue distribution center, or similar fulfillment facility by2061
means of the United States mail, delivery service, or common2062
carrier.2063

       (37)(36) Sales to a person engaged in the business of2064
horticulture or producing livestock of materials to be2065
incorporated into a horticulture structure or livestock structure;2066

       (38)(37) The sale of a motor vehicle that is used exclusively2067
for a vanpool ridesharing arrangement to persons participating in2068
the vanpool ridesharing arrangement when the vendor is selling the2069
vehicle pursuant to a contract between the vendor and the2070
department of transportation;2071

       (39)(38) Sales of personal computers, computer monitors,2072
computer keyboards, modems, and other peripheral computer2073
equipment to an individual who is licensed or certified to teach2074
in an elementary or a secondary school in this state for use by2075
that individual in preparation for teaching elementary or2076
secondary school students;2077

       (40)(39) Sales to a professional racing team of any of the2078
following:2079

       (a) Motor racing vehicles;2080

       (b) Repair services for motor racing vehicles;2081

       (c) Items of property that are attached to or incorporated in 2082
motor racing vehicles, including engines, chassis, and all other 2083
components of the vehicles, and all spare, replacement, and2084
rebuilt parts or components of the vehicles; except not including2085
tires, consumable fluids, paint, and accessories consisting of2086
instrumentation sensors and related items added to the vehicle to2087
collect and transmit data by means of telemetry and other forms of2088
communication.2089

       (41)(40) Sales of used manufactured homes and used mobile2090
homes, as defined in section 5739.0210 of the Revised Code, made2091
on or after January 1, 2000;2092

       (42)(41) Sales of tangible personal property and services to2093
a provider of electricity used or consumed directly and primarily2094
in generating, transmitting, or distributing electricity for use2095
by others, including property that is or is to be incorporated2096
into and will become a part of the consumer's production,2097
transmission, or distribution system and that retains its2098
classification as tangible personal property after incorporation;2099
fuel or power used in the production, transmission, or2100
distribution of electricity; and tangible personal property and2101
services used in the repair and maintenance of the production,2102
transmission, or distribution system, including only those motor2103
vehicles as are specially designed and equipped for such use. The2104
exemption provided in this division shall be in lieu of all other2105
exceptions in division (E)(2) of section 5739.01 of the Revised2106
Code to which a provider of electricity may otherwise be entitled2107
based on the use of the tangible personal property or service2108
purchased in generating, transmitting, or distributing2109
electricity.2110

       (C) For the purpose of the proper administration of this2111
chapter, and to prevent the evasion of the tax, it is presumed2112
that all sales made in this state are subject to the tax until the2113
contrary is established.2114

       (D) As used in this section, except in division (B)(16)(15)2115
of this section, "food" includes cereals and cereal products, milk2116
and milk products including ice cream, meat and meat products,2117
fish and fish products, eggs and egg products, vegetables and2118
vegetable products, fruits, fruit products, and pure fruit juices,2119
condiments, sugar and sugar products, coffee and coffee2120
substitutes, tea, and cocoa and cocoa products. It does not2121
include: spirituous liquors, wine, mixed beverages, or beer; soft 2122
drinks; sodas and beverages that are ordinarily dispensed at or in 2123
connection with bars and soda fountains, other than coffee, tea, 2124
and cocoa; root beer and root beer extracts; malt and malt2125
extracts; mineral oils, cod liver oils, and halibut liver oil;2126
medicines, including tonics, vitamin preparations, and other2127
products sold primarily for their medicinal properties; and water,2128
including mineral, bottled, and carbonated waters, and ice.2129

       (C)(E) The levy of this tax on retail sales of recreation and2130
sports club service shall not prevent a municipal corporation from2131
levying any tax on recreation and sports club dues or on any2132
income generated by recreation and sports club dues.2133

       Sec. 5739.03.  (A) Except as provided in section 5739.05 of2134
the Revised Code, the tax imposed by or pursuant to section2135
5739.02, 5739.021, 5739.023, or 5739.026 of the Revised Code shall2136
be paid by the consumer to the vendor, and each vendor shall2137
collect from the consumer, as a trustee for the state of Ohio, the2138
full and exact amount of the tax payable on each taxable sale, in2139
the manner and at the times provided as follows:2140

       (1) If the price is, at or prior to the provision of the2141
service or the delivery of possession of the thing sold to the2142
consumer, paid in currency passed from hand to hand by the2143
consumer or the consumer's agent to the vendor or the vendor's2144
agent, the vendor or the vendor's agent shall collect the tax with2145
and at the same time as the price;2146

       (2) If the price is otherwise paid or to be paid, the vendor2147
or the vendor's agent shall, at or prior to the provision of the2148
service or the delivery of possession of the thing sold to the2149
consumer, charge the tax imposed by or pursuant to section2150
5739.02, 5739.021, 5739.023, or 5739.026 of the Revised Code to2151
the account of the consumer, which amount shall be collected by2152
the vendor from the consumer in addition to the price. Such sale2153
shall be reported on and the amount of the tax applicable thereto2154
shall be remitted with the return for the period in which the sale2155
is made, and the amount of the tax shall become a legal charge in2156
favor of the vendor and against the consumer.2157

       (B)(1) If any sale is claimed to be exempt under division (E) 2158
of section 5739.01 of the Revised Code or under section 5739.02 of2159
the Revised Code, with the exception of divisions (B)(1) to 2160
(11)(10) or (28)(27) of section 5739.02 of the Revised Code, the2161
consumer must provide to the vendor, and the vendor must obtain2162
from the consumer, a certificate specifying the reason that the2163
sale is not legally subject to the tax. The certificate shall be2164
provided either in a hard copy form or electronic form, as2165
prescribed by the tax commissioner. If the transaction is claimed2166
to be exempt under division (B)(13)(12) of section 5739.02 of the2167
Revised Code, the exemption certificate shall be provided by both2168
the contractor and the contractee. Such contractee shall be deemed2169
to be the consumer of all items purchased under such claim of2170
exemption, if it is subsequently determined that the exemption is2171
not properly claimed. The certificate shall be in such form as the 2172
tax commissioner by regulation prescribes.2173

       (2) The vendor shall maintain records, including exemption2174
certificates, of all sales on which a consumer has claimed an2175
exemption, and provide them to the tax commissioner on request.2176

       (3) The tax commissioner may establish an identification2177
system whereby the commissioner issues an identification number to2178
a consumer that is exempt from payment of the tax. The consumer2179
must present the number to the vendor, if any sale is claimed to 2180
be exempt as provided in this section.2181

       (4) If no certificate is provided or obtained within the2182
period for filing the return for the period in which such sale is2183
consummated, it shall be presumed that the tax applies. Failure to 2184
have so provided, or to have so obtained, a certificate shall not2185
prevent a vendor or consumer from establishing that the sale is2186
not subject to the tax within one hundred twenty days of the2187
giving of notice by the commissioner of intention to levy an 2188
assessment, in which event the tax shall not apply.2189

       (5) Certificates need not be obtained nor provided where the2190
identity of the consumer is such that the transaction is never2191
subject to the tax imposed or where the item of tangible personal2192
property sold or the service provided is never subject to the tax2193
imposed, regardless of use, or when the sale is in interstate2194
commerce.2195

       (C) As used in this division, "contractee" means a person who 2196
seeks to enter or enters into a contract or agreement with a2197
contractor or vendor for the construction of real property or for2198
the sale and installation onto real property of tangible personal2199
property.2200

       Any contractor or vendor may request from any contractee a2201
certification of what portion of the property to be transferred2202
under such contract or agreement is to be incorporated into the2203
realty and what portion will retain its status as tangible2204
personal property after installation is completed. The contractor2205
or vendor shall request the certification by certified mail2206
delivered to the contractee, return receipt requested. Upon2207
receipt of such request and prior to entering into the contract or2208
agreement, the contractee shall provide to the contractor or2209
vendor a certification sufficiently detailed to enable the2210
contractor or vendor to ascertain the resulting classification of2211
all materials purchased or fabricated by the contractor or vendor2212
and transferred to the contractee. This requirement applies to a2213
contractee regardless of whether the contractee holds a direct2214
payment permit under section 5739.031 of the Revised Code or 2215
provides to the contractor or vendor an exemption certificate as2216
provided under this section.2217

       For the purposes of the taxes levied by this chapter and2218
Chapter 5741. of the Revised Code, the contractor or vendor may in2219
good faith rely on the contractee's certification. Notwithstanding2220
division (B) of section 5739.01 of the Revised Code, if the tax2221
commissioner determines that certain property certified by the2222
contractee as tangible personal property pursuant to this division2223
is, in fact, real property, the contractee shall be considered to2224
be the consumer of all materials so incorporated into that real2225
property and shall be liable for the applicable tax, and the2226
contractor or vendor shall be excused from any liability on those2227
materials.2228

       If a contractee fails to provide such certification upon the2229
request of the contractor or vendor, the contractor or vendor2230
shall comply with the provisions of this chapter and Chapter 5741.2231
of the Revised Code without the certification. If the tax2232
commissioner determines that such compliance has been performed in2233
good faith and that certain property treated as tangible personal2234
property by the contractor or vendor is, in fact, real property,2235
the contractee shall be considered to be the consumer of all2236
materials so incorporated into that real property and shall be2237
liable for the applicable tax, and the construction contractor or2238
vendor shall be excused from any liability on those materials.2239

       This division does not apply to any contract or agreement2240
where the tax commissioner determines as a fact that a2241
certification under this division was made solely on the decision2242
or advice of the contractor or vendor.2243

       (D) Notwithstanding division (B) of section 5739.01 of the2244
Revised Code, whenever the total rate of tax imposed under this2245
chapter is increased after the date after a construction contract2246
is entered into, the contractee shall reimburse the construction2247
contractor for any additional tax paid on tangible property2248
consumed or services received pursuant to the contract.2249

       (E) A vendor who files a petition for reassessment contesting 2250
the assessment of tax on sales for which the vendor obtained no 2251
valid exemption certificates and for which the vendor failed to 2252
establish that the sales were properly not subject to the tax 2253
during the one-hundred-twenty-day period allowed under division 2254
(B) of this section, may present to the tax commissioner2255
additional evidence to prove that the sales were properly subject2256
to a claim of exception or exemption. The vendor shall file such2257
evidence within ninety days of the receipt by the vendor of the2258
notice of assessment, except that, upon application and for2259
reasonable cause, the period for submitting such evidence shall be2260
extended thirty days.2261

       The commissioner shall consider such additional evidence in2262
reaching the final determination on the assessment and petition2263
for reassessment.2264

       (F) Whenever a vendor refunds to the consumer the full price2265
of an item of tangible personal property on which the tax imposed2266
under this chapter has been paid, the vendor shall also refund the2267
full amount of the tax paid.2268

       Sec. 5739.11.  As used in this section, "food service2269
operator" means a vendor who conducts a food service operation2270
under Chapter 3717. of the Revised Code.2271

       Each vendor shall keep complete and accurate records of2272
sales, together with a record of the tax collected on the sales,2273
which shall be the amount due under sections 5739.01 to 5739.31 of2274
the Revised Code, and shall keep all invoices, bills of lading,2275
and other such pertinent documents. Alternatively, any food2276
service operator who has not been convicted under section 5739.992277
of the Revised Code, with respect to the vendor's food service2278
operation, may keep a sample of primary sales records. Such sample2279
shall consist of all sales invoices, guest checks, cash register2280
tapes, and other such documents for each of fourteen days in every2281
calendar quarter. The specific days to be included in the sample2282
shall be determined by the tax commissioner and entered in the2283
commissioner's journal within ten days after the close of every2284
calendar quarter. The tax commissioner shall notify each such2285
operator registered pursuant to section 5739.17 of the Revised2286
Code who requests such notification of the days to be included in2287
each sample by the last day of the month following the close of2288
each calendar quarter. The notice also shall contain a statement2289
that destruction of primary records for time periods other than2290
the specified sample period is optional, and that some operators2291
may wish to keep all such records for four full years so as to be2292
able to clearly demonstrate that they have fully complied with2293
this chapter and Chapter 5741. of the Revised Code. The tax2294
commissioner shall further make such determination known through a2295
general news release.2296

       Each vendor shall keep exemption certificates required to be2297
obtained under section 5739.03 of the Revised Code. If the vendor2298
makes sales not subject to the tax and not required to be2299
evidenced by an exemption certificate, the vendor's records shall2300
show the identity of the purchaser, if the sale was exempted by2301
reason of such identity, or the nature of the transaction, if2302
exempted for any other reason. Vendors are not required to2303
differentiate in record-keeping between sales that are exempt from2304
taxation under division (B)(2) of section 5739.02 of the Revised2305
Code and those that are exempt under division (B)(16)(15) of that2306
section. Such records and other documents required to be kept by2307
this section shall be open during business hours to the inspection2308
of the tax commissioner, and shall be preserved for a period of2309
four years, unless the commissioner, in writing, consents to their2310
destruction within that period, or by order requires that they be2311
kept longer.2312

       Sec. 5741.02.  (A) For the use of the general revenue fund of 2313
the state, an excise tax is hereby levied on the storage, use, or 2314
other consumption in this state of tangible personal property or 2315
the benefit realized in this state of any service provided. The2316
tax shall be collected pursuant to the schedules in section2317
5739.025 of the Revised Code.2318

       (B) Each consumer, storing, using, or otherwise consuming in2319
this state tangible personal property or realizing in this state2320
the benefit of any service provided, shall be liable for the tax,2321
and such liability shall not be extinguished until the tax has2322
been paid to this state; provided, that the consumer shall be2323
relieved from further liability for the tax if the tax has been2324
paid to a seller in accordance with section 5741.04 of the Revised2325
Code or prepaid by the seller in accordance with section 5741.062326
of the Revised Code.2327

       (C) The tax does not apply to the storage, use, or2328
consumption in this state of the following described tangible2329
personal property or services, nor to the storage, use, or2330
consumption or benefit in this state of tangible personal property2331
or services purchased under the following described circumstances:2332

       (1) When the sale of property or service in this state is2333
subject to the excise tax imposed by sections 5739.01 to 5739.312334
of the Revised Code, provided said tax has been paid;2335

       (2) Except as provided in division (D) of this section,2336
tangible personal property or services, the acquisition of which,2337
if made in Ohio, would be a sale not subject to the tax imposed by2338
sections 5739.01 to 5739.31 of the Revised Code;2339

       (3) Property or services, the storage, use, or other2340
consumption of or benefit from which this state is prohibited from2341
taxing by the Constitution of the United States, laws of the2342
United States, or the Constitution of this state. This exemption2343
shall not exempt from the application of the tax imposed by this2344
section the storage, use, or consumption of tangible personal2345
property that was purchased in interstate commerce, but that has2346
come to rest in this state, provided that fuel to be used or2347
transported in carrying on interstate commerce that is stopped2348
within this state pending transfer from one conveyance to another2349
is exempt from the excise tax imposed by this section and section2350
5739.02 of the Revised Code;2351

       (4) Transient use of tangible personal property in this state 2352
by a nonresident tourist or vacationer, or a non-business use 2353
within this state by a nonresident of this state, if the property 2354
so used was purchased outside this state for use outside this 2355
state and is not required to be registered or licensed under the 2356
laws of this state;2357

       (5) Tangible personal property or services rendered, upon2358
which taxes have been paid to another jurisdiction to the extent2359
of the amount of the tax paid to such other jurisdiction. Where2360
the amount of the tax imposed by this section and imposed pursuant2361
to section 5741.021, 5741.022, or 5741.023 of the Revised Code2362
exceeds the amount paid to another jurisdiction, the difference2363
shall be allocated between the tax imposed by this section and any2364
tax imposed by a county or a transit authority pursuant to section2365
5741.021, 5741.022, or 5741.023 of the Revised Code, in proportion2366
to the respective rates of such taxes.2367

       As used in this subdivision, "taxes paid to another2368
jurisdiction" means the total amount of retail sales or use tax or2369
similar tax based upon the sale, purchase, or use of tangible2370
personal property or services rendered legally, levied by and paid2371
to another state or political subdivision thereof, or to the2372
District of Columbia, where the payment of such tax does not2373
entitle the taxpayer to any refund or credit for such payment.2374

       (6) The transfer of a used manufactured home or used mobile2375
home, as defined by section 5739.0210 of the Revised Code, made on2376
or after January 1, 2000;2377

       (7) Drugs that are or are intended to be distributed free of2378
charge to a practitioner licensed to prescribe, dispense, and2379
administer drugs to a human being in the course of a professional2380
practice and that by law may be dispensed only by or upon the2381
order of such a practitioner.2382

       (D) The tax applies to the storage, use, or other consumption 2383
in this state of tangible personal property or services, the 2384
acquisition of which at the time of sale was excepted under 2385
division (E)(1) of section 5739.01 of the Revised Code from the 2386
tax imposed by section 5739.02 of the Revised Code, but which has 2387
subsequently been temporarily or permanently stored, used, or 2388
otherwise consumed in a taxable manner.2389

       (E)(1) If any transaction is claimed to be exempt under2390
division (E) of section 5739.01 of the Revised Code or under2391
section 5739.02 of the Revised Code, with the exception of2392
divisions (B)(1) to (11)(10) or (28)(27) of section 5739.02 of the 2393
Revised Code, the consumer shall provide to the seller, and the2394
seller shall obtain from the consumer, a certificate specifying2395
the reason that the transaction is not subject to the tax. The2396
certificate shall be provided either in a hard copy form or2397
electronic form, as prescribed by the tax commissioner. If the2398
transaction is claimed to be exempt under division (B)(13)(12) of2399
section 5739.02 of the Revised Code, the exemption certificate2400
shall be provided by both the contractor and contractee. Such2401
contractee shall be deemed to be the consumer of all items2402
purchased under the claim of exemption, if it is subsequently2403
determined that the exemption is not properly claimed. The2404
certificate shall be in such form as the tax commissioner by rule2405
prescribes. The seller shall maintain records, including exemption 2406
certificates, of all sales on which a consumer has claimed an 2407
exemption, and provide them to the tax commissioner on request.2408

       (2) If no certificate is provided or obtained within the2409
period for filing the return for the period in which the2410
transaction is consummated, it shall be presumed that the tax2411
applies. The failure to have so provided or obtained a certificate 2412
shall not preclude a seller or consumer from establishing, within 2413
one hundred twenty days of the giving of notice by the 2414
commissioner of intention to levy an assessment, that the 2415
transaction is not subject to the tax.2416

       (F) A seller who files a petition for reassessment contesting 2417
the assessment of tax on transactions for which the seller 2418
obtained no valid exemption certificates, and for which the seller 2419
failed to establish that the transactions were not subject to the 2420
tax during the one-hundred-twenty-day period allowed under2421
division (E) of this section, may present to the tax commissioner2422
additional evidence to prove that the transactions were exempt.2423
The seller shall file such evidence within ninety days of the2424
receipt by the seller of the notice of assessment, except that,2425
upon application and for reasonable cause, the tax commissioner2426
may extend the period for submitting such evidence thirty days.2427

       (G) For the purpose of the proper administration of sections2428
5741.01 to 5741.22 of the Revised Code, and to prevent the evasion2429
of the tax hereby levied, it shall be presumed that any use,2430
storage, or other consumption of tangible personal property in2431
this state is subject to the tax until the contrary is2432
established.2433

       Section 2. That existing sections 165.09, 902.11, 2915.01,2434
4505.06, 4981.20, 5739.01, 5739.02, 5739.03, 5739.11, and 5741.022435
of the Revised Code are hereby repealed.2436

       Section 3.  Section 5739.01 of the Revised Code was amended2437
by Am. Sub. H.B. 524, Am. Sub. S.B. 143, and Sub. S.B. 200, all of2438
the 124th General Assembly. Comparison of these amendments in2439
pursuance of section 1.52 of the Revised Code discloses that while2440
certain of the amendments of these acts are reconcilable, certain2441
other of the amendments are substantively irreconcilable. Am. Sub.2442
H.B. 524 was passed on March 21, 2002; Am. Sub. S.B. 143 was2443
passed on January 30, 2002; Sub. S.B. 200 was passed on March 13,2444
2002. Section 5739.01 of the Revised Code is therefore presented2445
in this act as it results from Am. Sub. H.B. 524 and Sub. S.B. 2002446
and such of the amendments of Am. Sub. S.B. 143 as are not in2447
conflict with the amendments of Sub. S.B. 200. The General2448
Assembly, applying the principle stated in division (B) of section2449
1.52 of the Revised Code that amendments are to be harmonized if2450
reasonably capable of simultaneous operation, finds that the2451
composite is the resulting version of the section in effect prior2452
to the effective date of the section as presented in this act.2453