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

126th General Assembly Regular Session 2005-2006

Sub. H. B. No. 293

Representatives Kilbane, Miller, Trakas, McGregor, J., Wolpert, Evans, C., Reidelbach, Gilb, Faber, Cassell, Kearns, Hartnett, Carano, Boccieri, Healy, Buehrer, Aslanides, Barrett, Beatty, Blessing, Book, Brinkman, Brown, Bubp, Calvert, Chandler, Coley, Collier, Combs, DeBose, DeGeeter, DeWine, Distel, Dolan, Domenick, Evans, D., Fessler, Garrison, Gibbs, Hagan, Harwood, Hughes, Key, Koziura, Latta, Law, Martin, Mason, Oelslager, Otterman, Patton, T., Perry, Peterson, Raussen, Reed, Sayre, Schaffer, Schlichter, Schneider, Seitz, Setzer, Skindell, Smith, S., Stewart, D., Stewart, J., Strahorn, Taylor, Ujvagi, Wagoner, Webster, Williams, Woodard, Yates, Yuko 

Senator Schuler 

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A BILL

To amend sections 135.353 and 5739.01 and to enact

1

sections 135.804, 135.805, 135.806, and 135.807 of

2

the Revised Code to authorize boards of county

3

commissioners to establish property tax payment

4

linked deposit programs to assist senior citizens

5

and permanently and totally disabled citizens in

6

paying property taxes on their homesteads, and to

7

change who pays sales or use taxes when employment

8

service personnel are supplied by the purchaser to

9

a third party as an employment service.

10

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

Section 1. That sections 135.353 and 5739.01 be amended and	11
sections 135.804, 135.805, 135.806, and 135.807 of the Revised	12
Code be enacted to read as follows:	13

Sec. 135.353. (A) In addition to the investments specified	14
in section 135.35 of the Revised Code, the investing authority of	15
a county may do bothall of the following:	16

(A)(1) Invest inactive or public moneys in linked deposits as	17
authorized by resolution adopted pursuant to section 135.80 or	18
135.801 of the Revised Code;	19

(B)(2) Invest inactive or public moneys in linked deposits as	20
authorized by resolution adopted pursuant to section 135.805 of	21
the Revised Code for a term considered appropriate by the	22
investing authority, but not exceeding fifteen years, which	23
investment may be renewed for up to two additional terms with each	24
additional term not exceeding fifteen years.	25

(3) Invest inactive moneys in certificates of deposit in	26
accordance with all of the following:	27

(1)(a) The inactive moneys initially are deposited with an	28
eligible public depository described in section 135.32 of the	29
Revised Code and selected by the investing authority.	30

(2)(b) For the investing authority depositing the inactive	31
moneys pursuant to division (B)(1)(A)(3)(a) of this section, the	32
eligible public depository selected pursuant to that division	33
invests the inactive moneys in certificates of deposit of one or	34
more federally insured banks or savings and loan associations,	35
wherever located. The full amount of principal and any accrued	36
interest of each certificate of deposit invested in pursuant to	37
division (B)(2)(A)(3)(b) of this section shall be insured by	38
federal deposit insurance.	39

(3)(c) For the investing authority depositing the inactive	40
moneys pursuant to division (B)(1)(A)(3)(a) of this section, the	41
eligible public depository selected pursuant to that division acts	42
as custodian of the certificates of deposit described in division	43
(B)(2)(A)(3)(b) of this section.	44

(4)(d) At the same time that the eligible public depository	45
selected in accordance with division (B)(1)(A)(3)(a) of this	46
section invests the deposit received pursuant to that division in	47
the certificates of deposit described in division (B)(2)(A)(3)(b)	48
of this section, and the certificates of deposit are issued by the	49
bank or savings and loan association, the eligible public	50
depository receives an amount of deposits from customers of other	51
federally insured financial institutions, wherever located, that	52
are equal to or greater than the amount initially deposited by the	53
investing authority pursuant to division (B)(1)(A)(3)(a) of this	54
section.	55

(C)(B) Inactive moneys deposited or invested in accordance	56
with division (B)(A)(3) of this section are not subject to any	57
pledging requirements described in section 135.181 or 135.37 of	58
the Revised Code.	59

Sec. 135.804.  As used in sections 135.804 to 135.807 of the	60
Revised Code:	61

(A) "Taxes" has the same meaning as in section 323.01 of the	62
Revised Code.	63

(B) "Eligible borrower" means a person meeting all of the	64
following:	65

(1) The person is the owner of a homestead that is not	66
charged with more than two years' worth of certified delinquent	67
taxes.	68

(2) The person had total income in the year prior to	69
submitting an application for a reduced rate loan under a property	70
tax payment linked deposit program of the lesser of fifty thousand	71
dollars or the total income limit established pursuant to section	72
135.805 of the Revised Code by the board of county commissioners	73
as an eligibility requirement for participation in a property tax	74
payment linked deposit program.	75

(3) The person meets all other eligibility requirements	76
established pursuant to section 135.805 of the Revised Code by the	77
board of county commissioners for participation in a property tax	78
payment linked deposit program.	79

(C) "Eligible lending institution" means a financial	80
institution that meets all of the following:	81

(1) The financial institution is eligible to make loans to	82
individuals that are secured by mortgages, including mortgages	83
commonly known as reverse mortgages.	84

(2) The financial institution has an office located within	85
the territorial limits of the county.	86

(3) The financial institution is an eligible public	87
depository described in section 135.32 of the Revised Code into	88
which the county's investing authority may deposit the public	89
moneys of the county.	90

(4) The financial institution has entered into an agreement	91
described in division (B)(4) of section 135.805 of the Revised	92
Code with the investing authority of the county to participate in	93
the property tax payment linked deposit program.	94

(D) "Homestead" means either of the following:

95

(1) A dwelling, including a unit in a multiple-unit dwelling	96
and a manufactured home or mobile home taxed as real property	97
pursuant to division (B) of section 4503.06 of the Revised Code,	98
owned and occupied as a home by an individual whose domicile is in	99
this state and who has not acquired ownership from a person, other	100
than the individual's spouse, related by consanguinity or affinity	101
for the purpose of qualifying for a property tax payment linked	102
deposit program.	103

(2) A unit in a housing cooperative that is occupied as a	104
home, but not owned, by an individual whose domicile is in this	105
state.	106

The homestead shall include so much of the land surrounding	107
it, not exceeding one acre, as is reasonably necessary for the use	108
of the dwelling or unit as a home. An owner includes a holder of	109
one of the several estates in fee, a vendee in possession under a	110
purchase agreement or a land contract, a mortgagor, a life tenant,	111
one or more tenants with a right of survivorship, tenants in	112
common, and a settlor of a revocable inter vivos trust holding the	113
title to a homestead occupied by the settlor as of right under the	114
trust.	115

(E) "Housing cooperative" means a housing complex of at least	116
two hundred fifty units that is owned and operated by a nonprofit	117
corporation that issues a share of the corporation's stock to an	118
individual, entitling the individual to live in a unit of the	119
complex, and collects a monthly maintenance fee from the	120
individual to maintain, operate, and pay the taxes of the complex.	121

(F) "Investing authority" and "public moneys" have the same	122
meanings as in section 135.31 of the Revised Code.	123

(G) "Lien certificate" means the certificate described in	124
section 135.807 of the Revised Code.	125

(H) "Old age and survivors benefits received pursuant to the	126
'Social Security Act'" or "tier I railroad retirement benefits	127
received pursuant to the 'Railroad Retirement Act'" means:	128

(1) Old age benefits payable under the social security or	129
railroad retirement laws in effect on the last day of the calendar	130
year prior to the year for which a reduced rate loan under a	131
property tax payment linked deposit program is applied for, or, if	132
no such benefits are payable that year, old age benefits payable	133
the first succeeding year in which old age benefits under the	134
social security or railroad retirement laws are payable, except in	135
those cases where a change in social security or railroad	136
retirement benefits results in a reduction in income.	137

(2) The lesser of:

138

(a) Survivors benefits payable under the social security or	139
railroad retirement laws in effect on the last day of the calendar	140
year prior to the year for which a reduced rate loan under a	141
property tax payment linked deposit program is applied for, or, if	142
no such benefits are payable that year, survivors benefits payable	143
the first succeeding year in which survivors benefits are payable;	144
or	145

(b) Old age benefits of the deceased spouse, as determined	146
under division (H)(1) of this section, upon which the surviving	147
spouse's survivors benefits are based under the social security or	148
railroad retirement laws, except in those cases where a change in	149
benefits would cause a reduction in income.	150

Survivors benefits are those described in division (H)(2)(b)	151
of this section only if the deceased spouse received old age	152
benefits in the year in which the deceased spouse died. If the	153
deceased spouse did not receive old age benefits in the year in	154
which the deceased spouse died, then survivors benefits are those	155
described in division (H)(2)(a) of this section.	156

(I) "Permanently and totally disabled" means a person who, on	157
the first day of January of the year that a reduced rate loan	158
under a property tax payment linked deposit program is applied	159
for, has some impairment in body or mind that makes the person	160
unable to work at any substantially remunerative employment that	161
the person reasonably is able to perform and that will, with	162
reasonable probability, continue for an indefinite period of at	163
least twelve months without any present indication of recovery	164
therefrom or has been certified as permanently and totally	165
disabled by a state or federal agency having the function of so	166
classifying persons.	167

(J) "Property tax payment linked deposit program" means a	168
county-wide program authorized under section 135.805 of the	169
Revised Code and established by the board of county commissioners	170
of a county pursuant to that section.	171

(K) "Sixty-five years of age or older" means a person who has	172
attained age sixty-four prior to the first day of January of the	173
year of application for a reduced rate loan under a property tax	174
payment linked deposit program.	175

(L) "Total income" means the adjusted gross income of the	176
owner and the owner's spouse for the year preceding the year in	177
which application for a reduced rate loan under a property tax	178
payment linked deposit program is made, as determined under the	179
"Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as	180
amended, adjusted as follows:	181

(1) Subtract the amount of disability benefits included in	182
adjusted gross income, but not to exceed fifty-two hundred	183
dollars;	184

(2) Add old age and survivors benefits received pursuant to	185
the "Social Security Act" that are not included in adjusted gross	186
income;	187

(3) Add retirement, pension, annuity, or other retirement	188
payments or benefits not included in adjusted gross income;	189

(4) Add tier I and tier II railroad retirement benefits	190
received pursuant to the "Railroad Retirement Act," 50 Stat. 307,	191
45 U.S.C.A. 228;	192

(5) Add interest on federal, state, and local government	193
obligations;	194

(6) For a person who received a reduced rate loan under a	195
property tax payment linked deposit program for a prior year on	196
the basis of being permanently and totally disabled and whose	197
current application for a reduced rate loan is made on the basis	198
of age, subtract the following amount:	199

(a) If the person received disability benefits that were not	200
included in adjusted gross income in the year preceding the first	201
year in which the person applied for a reduced rate loan on the	202
basis of age, subtract an amount equal to the disability benefits	203
the person received in that preceding year, to the extent included	204
in total income in the current year and not subtracted under	205
division (L)(1) of this section in the current year;	206

(b) If the person received disability benefits that were	207
included in adjusted gross income in the year preceding the first	208
year in which the person applied for a reduced rate loan on the	209
basis of age, subtract an amount equal to the amount of disability	210
benefits that were subtracted pursuant to division (L)(1) of this	211
section in that preceding year, to the extent included in total	212
income in the current year and not subtracted under division	213
(L)(1) of this section in the current year.	214

Disability benefits that are paid by the department of	215
veterans affairs or a branch of the armed forces of the United	216
States on account of an injury or disability shall not be included	217
in total income.	218

Sec. 135.805.  (A) The general assembly finds that many low	219
to moderate income senior citizens and permanently and totally	220
disabled citizens face financial hardship and find it difficult to	221
timely pay property taxes on their homesteads, which can lead to	222
delinquencies, penalties, declines in tax receipts, foreclosures,	223
a loss of stable and affordable housing, a loss of neighborhoods	224
and communities, and a decline in property values. Accordingly, it	225
is declared to be the public policy of the state through property	226
tax payment linked deposit programs established by counties to	227
provide a source of low-cost funds for lending purposes to assist	228
these citizens in timely paying property taxes on their	229
homesteads.	230

(B) A board of county commissioners, by resolution, may	231
establish for the benefit of persons sixty-five years of age or	232
older, or persons who are permanently and totally disabled, or	233
both groups of persons, a property tax payment linked deposit	234
program. The program shall authorize the investing authority of	235
the county, in accordance with division (A)(2) of section 135.353	236
of the Revised Code, to place certificates of deposit at up to	237
three per cent below market rates with an eligible lending	238
institution, provided that the eligible lending institution agrees	239
to lend the value of such deposit to eligible borrowers at up to	240
three per cent below the present borrowing rate applicable to each	241
eligible borrower. The resolution shall include requirements,	242
parameters, limitations, and other provisions that are consistent	243
with sections 135.804 to 135.807 of the Revised Code and are	244
necessary to establish and carry out the property tax payment	245
linked deposit program, including, but not limited to, all of the	246
following:	247

(1) Eligibility requirements for borrowers who may receive	248
reduced rate loans under the property tax payment linked deposit	249
program, including both of the following:	250

(a) A total income limit for a borrower to be eligible for	251
such a loan;	252

(b) An indebtedness limit that a borrower may not exceed to	253
be eligible for such a loan, under which the sum of all recorded	254
liens on the homestead plus the amount of the reduced rate loan	255
cannot exceed eighty per cent of the homestead's true value as	256
most recently determined by the county auditor.	257

(2) Application procedures for eligible borrowers and	258
eligible lending institutions wishing to participate in the	259
property tax payment linked deposit program;	260

(3) Review procedures for applications and criteria for	261
acceptance or rejection of applications for reduced rate loans	262
under the property tax payment linked deposit program;	263

(4) Necessary agreements between the eligible lending	264
institution and the investing authority of the county to carry out	265
the purposes of the property tax payment linked deposit program,	266
including procedures for the payment directly to the county	267
treasurer by the eligible lending institution of the property	268
taxes due on the homestead and delivery by the county treasurer to	269
the eligible lending institution of the lien certificate as	270
provided in section 135.807 of the Revised Code;	271

(5) Annual reports regarding the operation of the property	272
tax payment linked deposit program to be made by the investing	273
authority to the board of county commissioners.	274

(C) A board of county commissioners may appropriate funds	275
from the general fund of the county or any other lawfully	276
available funds of the county for the purpose of defraying some or	277
all of the closing costs and expenses of reduced rate loans made	278
by eligible lending institutions to eligible borrowers pursuant to	279
the property tax payment linked deposit program.	280

(D) The county and its investing authority and the board of	281
county commissioners are not liable to any eligible lending	282
institution in any manner for the payment of the principal or	283
interest on any reduced rate loan made under the property tax	284
payment linked deposit program, and any delay in payment or	285
default on the part of any borrower does not in any manner affect	286
the deposit agreement between the eligible lending institution and	287
the investing authority or board of county commissioners.	288

Sec. 135.806.  Upon placement of a certificate of deposit	289
with an eligible lending institution pursuant to an agreement	290
described in section 135.805 of the Revised Code, the eligible	291
lending institution shall do both of the following:	292

(A) Lend funds pursuant to the agreement to an eligible	293
borrower;	294

(B) Comply fully with the requirements of sections 135.804 to	295
135.807 of the Revised Code.	296

Sec. 135.807.  (A) A property tax payment linked deposit	297
program shall provide for the delivery of a lien certificate to an	298
eligible lending institution making payment to the county	299
treasurer, pursuant to a loan agreement between the eligible	300
lending institution and eligible borrower, of some or all of the	301
taxes then due on the homestead of that eligible borrower.	302

(B)(1) To ensure uniformity among all counties, the tax	303
commissioner shall prescribe the form for a lien certificate	304
delivered pursuant to division (A) of this section, which form	305
shall include the identity of the homestead, the eligible	306
borrower, the eligible lending institution, the amount of taxes	307
paid by that eligible lending institution, and the tax year for	308
which the taxes were paid. The tax commissioner shall distribute	309
the forms to the county treasurers of all counties in which a	310
property tax payment linked deposit program is established.	311

(2) A county treasurer shall use the lien certificate form	312
prescribed by the tax commissioner, except that, prior to the time	313
that a lien certificate form is prescribed and the forms are	314
distributed by the tax commissioner, the form shall be prepared by	315
the county treasurer of the county, contain the information	316
required by division (B)(1) of this section, and include the	317
following sentence: "This lien certificate is delivered pursuant	318
to section 135.807 of the Revised Code and vests in the eligible	319
lending institution the first lien held previously by the state	320
and its taxing districts for the amount of taxes paid by the	321
eligible lending institution, together with any and all unpaid	322
interest thereon."	323

(C)(1) The delivery of the lien certificate pursuant to	324
division (A) of this section vests in the eligible lending	325
institution the first lien held previously by the state and its	326
taxing districts for the amount of the taxes paid by the eligible	327
lending institution, together with any unpaid interest thereon	328
from the date of delivery at the interest rate specified in the	329
loan agreement between the eligible lending institution and the	330
eligible borrower. The lien is superior to any subsequent tax	331
liens.	332

(2) Subject to division (C)(3) of this section, the lien	333
certificate delivered pursuant to division (A) of this section is	334
superior to all other liens and encumbrances upon the homestead	335
described in that lien certificate, and the lien continues in full	336
force and effect until the amount of all taxes paid by the	337
eligible lending institution, together with any unpaid interest	338
thereon, has been repaid to the eligible lending institution.	339

(3) With respect to the priority as among first liens of the	340
state and its taxing districts, the priority is determined by the	341
date that the first liens of the state and its taxing districts	342
attached pursuant to section 323.11 of the Revised Code, with	343
first priority to the earliest attached lien and each immediately	344
subsequent priority based upon the next earliest attached lien.	345

(D) The eligible lending institution may record the lien	346
certificate or memorandum thereof as a mortgage on the land in the	347
office of the county recorder of the county in which the homestead	348
is situated. The county recorder shall record the certificate in	349
the record of mortgages provided in division (B) of section 317.08	350
of the Revised Code and shall index the certificate in the indexes	351
provided for under section 317.18 of the Revised Code. If the lien	352
subsequently is canceled, the cancellation also shall be recorded	353
by the county recorder. When a loan is repaid in full, the	354
eligible financial institution shall promptly record the full	355
payment and cancel or otherwise release the lien. On repayment of	356
the loan in full, the lien certificate shall be null and void.	357

Sec. 5739.01.  As used in this chapter:

358

(A) "Person" includes individuals, receivers, assignees,	359
trustees in bankruptcy, estates, firms, partnerships,	360
associations, joint-stock companies, joint ventures, clubs,	361
societies, corporations, the state and its political subdivisions,	362
and combinations of individuals of any form.	363

(B) "Sale" and "selling" include all of the following	364
transactions for a consideration in any manner, whether absolutely	365
or conditionally, whether for a price or rental, in money or by	366
exchange, and by any means whatsoever:	367

(1) All transactions by which title or possession, or both,	368
of tangible personal property, is or is to be transferred, or a	369
license to use or consume tangible personal property is or is to	370
be granted;	371

(2) All transactions by which lodging by a hotel is or is to	372
be furnished to transient guests;	373

(3) All transactions by which:

374

(a) An item of tangible personal property is or is to be	375
repaired, except property, the purchase of which would not be	376
subject to the tax imposed by section 5739.02 of the Revised Code;	377

(b) An item of tangible personal property is or is to be	378
installed, except property, the purchase of which would not be	379
subject to the tax imposed by section 5739.02 of the Revised Code	380
or property that is or is to be incorporated into and will become	381
a part of a production, transmission, transportation, or	382
distribution system for the delivery of a public utility service;	383

(c) The service of washing, cleaning, waxing, polishing, or	384
painting a motor vehicle is or is to be furnished;	385

(d) Until August 1, 2003, industrial laundry cleaning	386
services are or are to be provided and, on and after August 1,	387
2003, laundry and dry cleaning services are or are to be provided;	388

(e) Automatic data processing, computer services, or	389
electronic information services are or are to be provided for use	390
in business when the true object of the transaction is the receipt	391
by the consumer of automatic data processing, computer services,	392
or electronic information services rather than the receipt of	393
personal or professional services to which automatic data	394
processing, computer services, or electronic information services	395
are incidental or supplemental. Notwithstanding any other	396
provision of this chapter, such transactions that occur between	397
members of an affiliated group are not sales. An affiliated group	398
means two or more persons related in such a way that one person	399
owns or controls the business operation of another member of the	400
group. In the case of corporations with stock, one corporation	401
owns or controls another if it owns more than fifty per cent of	402
the other corporation's common stock with voting rights.	403

(f) Telecommunications service, including prepaid calling	404
service, prepaid wireless calling service, or ancillary service,	405
is or is to be provided, but not including coin-operated telephone	406
service;	407

(g) Landscaping and lawn care service is or is to be	408
provided;	409

(h) Private investigation and security service is or is to be	410
provided;	411

(i) Information services or tangible personal property is	412
provided or ordered by means of a nine hundred telephone call;	413

(j) Building maintenance and janitorial service is or is to	414
be provided;	415

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

416

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

417

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

418

(n) Physical fitness facility service is or is to be	419
provided;	420

(o) Recreation and sports club service is or is to be	421
provided.	422

(p) On and after August 1, 2003, satellite broadcasting	423
service is or is to be provided;	424

(q) On and after August 1, 2003, personal care service is or	425
is to be provided to an individual. As used in this division,	426
"personal care service" includes skin care, the application of	427
cosmetics, manicuring, pedicuring, hair removal, tattooing, body	428
piercing, tanning, massage, and other similar services. "Personal	429
care service" does not include a service provided by or on the	430
order of a licensed physician or licensed chiropractor, or the	431
cutting, coloring, or styling of an individual's hair.	432

(r) On and after August 1, 2003, the transportation of	433
persons by motor vehicle or aircraft is or is to be provided, when	434
the transportation is entirely within this state, except for	435
transportation provided by an ambulance service, by a transit bus,	436
as defined in section 5735.01 of the Revised Code, and	437
transportation provided by a citizen of the United States holding	438
a certificate of public convenience and necessity issued under 49	439
U.S.C. 41102;	440

(s) On and after August 1, 2003, motor vehicle towing service	441
is or is to be provided. As used in this division, "motor vehicle	442
towing service" means the towing or conveyance of a wrecked,	443
disabled, or illegally parked motor vehicle.	444

(t) On and after August 1, 2003, snow removal service is or	445
is to be provided. As used in this division, "snow removal	446
service" means the removal of snow by any mechanized means, but	447
does not include the providing of such service by a person that	448
has less than five thousand dollars in sales of such service	449
during the calendar year.	450

(4) All transactions by which printed, imprinted,	451
overprinted, lithographic, multilithic, blueprinted, photostatic,	452
or other productions or reproductions of written or graphic matter	453
are or are to be furnished or transferred;	454

(5) The production or fabrication of tangible personal	455
property for a consideration for consumers who furnish either	456
directly or indirectly the materials used in the production of	457
fabrication work; and include the furnishing, preparing, or	458
serving for a consideration of any tangible personal property	459
consumed on the premises of the person furnishing, preparing, or	460
serving such tangible personal property. Except as provided in	461
section 5739.03 of the Revised Code, a construction contract	462
pursuant to which tangible personal property is or is to be	463
incorporated into a structure or improvement on and becoming a	464
part of real property is not a sale of such tangible personal	465
property. The construction contractor is the consumer of such	466
tangible personal property, provided that the sale and	467
installation of carpeting, the sale and installation of	468
agricultural land tile, the sale and erection or installation of	469
portable grain bins, or the provision of landscaping and lawn care	470
service and the transfer of property as part of such service is	471
never a construction contract.	472

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

473

(a) "Agricultural land tile" means fired clay or concrete	474
tile, or flexible or rigid perforated plastic pipe or tubing,	475
incorporated or to be incorporated into a subsurface drainage	476
system appurtenant to land used or to be used directly in	477
production by farming, agriculture, horticulture, or floriculture.	478
The term does not include such materials when they are or are to	479
be incorporated into a drainage system appurtenant to a building	480
or structure even if the building or structure is used or to be	481
used in such production.	482

(b) "Portable grain bin" means a structure that is used or to	483
be used by a person engaged in farming or agriculture to shelter	484
the person's grain and that is designed to be disassembled without	485
significant damage to its component parts.	486

(6) All transactions in which all of the shares of stock of a	487
closely held corporation are transferred, if the corporation is	488
not engaging in business and its entire assets consist of boats,	489
planes, motor vehicles, or other tangible personal property	490
operated primarily for the use and enjoyment of the shareholders;	491

(7) All transactions in which a warranty, maintenance or	492
service contract, or similar agreement by which the vendor of the	493
warranty, contract, or agreement agrees to repair or maintain the	494
tangible personal property of the consumer is or is to be	495
provided;	496

(8) The transfer of copyrighted motion picture films used	497
solely for advertising purposes, except that the transfer of such	498
films for exhibition purposes is not a sale.	499

(9) On and after August 1, 2003, all transactions by which	500
tangible personal property is or is to be stored, except such	501
property that the consumer of the storage holds for sale in the	502
regular course of business.	503

Except as provided in this section, "sale" and "selling" do	504
not include transfers of interest in leased property where the	505
original lessee and the terms of the original lease agreement	506
remain unchanged, or professional, insurance, or personal service	507
transactions that involve the transfer of tangible personal	508
property as an inconsequential element, for which no separate	509
charges are made.	510

(C) "Vendor" means the person providing the service or by	511
whom the transfer effected or license given by a sale is or is to	512
be made or given and, for sales described in division (B)(3)(i) of	513
this section, the telecommunications service vendor that provides	514
the nine hundred telephone service; if two or more persons are	515
engaged in business at the same place of business under a single	516
trade name in which all collections on account of sales by each	517
are made, such persons shall constitute a single vendor.	518

Physicians, dentists, hospitals, and veterinarians who are	519
engaged in selling tangible personal property as received from	520
others, such as eyeglasses, mouthwashes, dentifrices, or similar	521
articles, are vendors. Veterinarians who are engaged in	522
transferring to others for a consideration drugs, the dispensing	523
of which does not require an order of a licensed veterinarian or	524
physician under federal law, are vendors.	525

(D)(1) "Consumer" means the person for whom the service is	526
provided, to whom the transfer effected or license given by a sale	527
is or is to be made or given, to whom the service described in	528
division (B)(3)(f) or (i) of this section is charged, or to whom	529
the admission is granted.	530

(2) Physicians, dentists, hospitals, and blood banks operated	531
by nonprofit institutions and persons licensed to practice	532
veterinary medicine, surgery, and dentistry are consumers of all	533
tangible personal property and services purchased by them in	534
connection with the practice of medicine, dentistry, the rendition	535
of hospital or blood bank service, or the practice of veterinary	536
medicine, surgery, and dentistry. In addition to being consumers	537
of drugs administered by them or by their assistants according to	538
their direction, veterinarians also are consumers of drugs that	539
under federal law may be dispensed only by or upon the order of a	540
licensed veterinarian or physician, when transferred by them to	541
others for a consideration to provide treatment to animals as	542
directed by the veterinarian.	543

(3) A person who performs a facility management, or similar	544
service contract for a contractee is a consumer of all tangible	545
personal property and services purchased for use in connection	546
with the performance of such contract, regardless of whether title	547
to any such property vests in the contractee. The purchase of such	548
property and services is not subject to the exception for resale	549
under division (E)(1) of this section.	550

(4)(a) In the case of a person who purchases printed matter	551
for the purpose of distributing it or having it distributed to the	552
public or to a designated segment of the public, free of charge,	553
that person is the consumer of that printed matter, and the	554
purchase of that printed matter for that purpose is a sale.	555

(b) In the case of a person who produces, rather than	556
purchases, printed matter for the purpose of distributing it or	557
having it distributed to the public or to a designated segment of	558
the public, free of charge, that person is the consumer of all	559
tangible personal property and services purchased for use or	560
consumption in the production of that printed matter. That person	561
is not entitled to claim exemption under division (B)(42)(f) of	562
section 5739.02 of the Revised Code for any material incorporated	563
into the printed matter or any equipment, supplies, or services	564
primarily used to produce the printed matter.	565

(c) The distribution of printed matter to the public or to a	566
designated segment of the public, free of charge, is not a sale to	567
the members of the public to whom the printed matter is	568
distributed or to any persons who purchase space in the printed	569
matter for advertising or other purposes.	570

(5) A person who makes sales of any of the services listed in	571
division (B)(3) of this section is the consumer of any tangible	572
personal property used in performing the service. The purchase of	573
that property is not subject to the resale exception under	574
division (E)(1) of this section.	575

(6) A person who engages in highway transportation for hire	576
is the consumer of all packaging materials purchased by that	577
person and used in performing the service, except for packaging	578
materials sold by such person in a transaction separate from the	579
service.	580

(E) "Retail sale" and "sales at retail" include all sales,	581
except those in which the purpose of the consumer is to resell the	582
thing transferred or benefit of the service provided, by a person	583
engaging in business, in the form in which the same is, or is to	584
be, received by the person.	585

(F) "Business" includes any activity engaged in by any person	586
with the object of gain, benefit, or advantage, either direct or	587
indirect. "Business" does not include the activity of a person in	588
managing and investing the person's own funds.	589

(G) "Engaging in business" means commencing, conducting, or	590
continuing in business, and liquidating a business when the	591
liquidator thereof holds itself out to the public as conducting	592
such business. Making a casual sale is not engaging in business.	593

(H)(1)(a) "Price," except as provided in divisions (H)(2) and	594
(3) of this section, means the total amount of consideration,	595
including cash, credit, property, and services, for which tangible	596
personal property or services are sold, leased, or rented, valued	597
in money, whether received in money or otherwise, without any	598
deduction for any of the following:	599

(i) The vendor's cost of the property sold;

600

(ii) The cost of materials used, labor or service costs,	601
interest, losses, all costs of transportation to the vendor, all	602
taxes imposed on the vendor, including the tax imposed under	603
Chapter 5751. of the Revised Code, and any other expense of the	604
vendor;	605

(iii) Charges by the vendor for any services necessary to	606
complete the sale;	607

(iv) On and after August 1, 2003, delivery charges. As used	608
in this division, "delivery charges" means charges by the vendor	609
for preparation and delivery to a location designated by the	610
consumer of tangible personal property or a service, including	611
transportation, shipping, postage, handling, crating, and packing.	612

(v) Installation charges;

613

(vi) Credit for any trade-in.

614

(b) "Price" includes consideration received by the vendor	615
from a third party, if the vendor actually receives the	616
consideration from a party other than the consumer, and the	617
consideration is directly related to a price reduction or discount	618
on the sale; the vendor has an obligation to pass the price	619
reduction or discount through to the consumer; the amount of the	620
consideration attributable to the sale is fixed and determinable	621
by the vendor at the time of the sale of the item to the consumer;	622
and one of the following criteria is met:	623

(i) The consumer presents a coupon, certificate, or other	624
document to the vendor to claim a price reduction or discount	625
where the coupon, certificate, or document is authorized,	626
distributed, or granted by a third party with the understanding	627
that the third party will reimburse any vendor to whom the coupon,	628
certificate, or document is presented;	629

(ii) The consumer identifies the consumer's self to the	630
seller as a member of a group or organization entitled to a price	631
reduction or discount. A preferred customer card that is available	632
to any patron does not constitute membership in such a group or	633
organization.	634

(iii) The price reduction or discount is identified as a	635
third party price reduction or discount on the invoice received by	636
the consumer, or on a coupon, certificate, or other document	637
presented by the consumer.	638

(c) "Price" does not include any of the following:

639

(i) Discounts, including cash, term, or coupons that are not	640
reimbursed by a third party that are allowed by a vendor and taken	641
by a consumer on a sale;	642

(ii) Interest, financing, and carrying charges from credit	643
extended on the sale of tangible personal property or services, if	644
the amount is separately stated on the invoice, bill of sale, or	645
similar document given to the purchaser;	646

(iii) Any taxes legally imposed directly on the consumer that	647
are separately stated on the invoice, bill of sale, or similar	648
document given to the consumer. For the purpose of this division,	649
the tax imposed under Chapter 5751. of the Revised Code is not a	650
tax directly on the consumer, even if the tax or a portion thereof	651
is separately stated.	652

(iv) Notwithstanding divisions (H)(1)(b)(i) to (iii) of this	653
section, any discount allowed by an automobile manufacturer to its	654
employee, or to the employee of a supplier, on the purchase of a	655
new motor vehicle from a new motor vehicle dealer in this state.	656

(2) In the case of a sale of any new motor vehicle by a new	657
motor vehicle dealer, as defined in section 4517.01 of the Revised	658
Code, in which another motor vehicle is accepted by the dealer as	659
part of the consideration received, "price" has the same meaning	660
as in division (H)(1) of this section, reduced by the credit	661
afforded the consumer by the dealer for the motor vehicle received	662
in trade.	663

(3) In the case of a sale of any watercraft or outboard motor	664
by a watercraft dealer licensed in accordance with section	665
1547.543 of the Revised Code, in which another watercraft,	666
watercraft and trailer, or outboard motor is accepted by the	667
dealer as part of the consideration received, "price" has the same	668
meaning as in division (H)(1) of this section, reduced by the	669
credit afforded the consumer by the dealer for the watercraft,	670
watercraft and trailer, or outboard motor received in trade. As	671
used in this division, "watercraft" includes an outdrive unit	672
attached to the watercraft.	673

(I) "Receipts" means the total amount of the prices of the	674
sales of vendors, provided that cash discounts allowed and taken	675
on sales at the time they are consummated are not included, minus	676
any amount deducted as a bad debt pursuant to section 5739.121 of	677
the Revised Code. "Receipts" does not include the sale price of	678
property returned or services rejected by consumers when the full	679
sale price and tax are refunded either in cash or by credit.	680

(J) "Place of business" means any location at which a person	681
engages in business.	682

(K) "Premises" includes any real property or portion thereof	683
upon which any person engages in selling tangible personal	684
property at retail or making retail sales and also includes any	685
real property or portion thereof designated for, or devoted to,	686
use in conjunction with the business engaged in by such person.	687

(L) "Casual sale" means a sale of an item of tangible	688
personal property that was obtained by the person making the sale,	689
through purchase or otherwise, for the person's own use and was	690
previously subject to any state's taxing jurisdiction on its sale	691
or use, and includes such items acquired for the seller's use that	692
are sold by an auctioneer employed directly by the person for such	693
purpose, provided the location of such sales is not the	694
auctioneer's permanent place of business. As used in this	695
division, "permanent place of business" includes any location	696
where such auctioneer has conducted more than two auctions during	697
the year.	698

(M) "Hotel" means every establishment kept, used, maintained,	699
advertised, or held out to the public to be a place where sleeping	700
accommodations are offered to guests, in which five or more rooms	701
are used for the accommodation of such guests, whether the rooms	702
are in one or several structures.	703

(N) "Transient guests" means persons occupying a room or	704
rooms for sleeping accommodations for less than thirty consecutive	705
days.	706

(O) "Making retail sales" means the effecting of transactions	707
wherein one party is obligated to pay the price and the other	708
party is obligated to provide a service or to transfer title to or	709
possession of the item sold. "Making retail sales" does not	710
include the preliminary acts of promoting or soliciting the retail	711
sales, other than the distribution of printed matter which	712
displays or describes and prices the item offered for sale, nor	713
does it include delivery of a predetermined quantity of tangible	714
personal property or transportation of property or personnel to or	715
from a place where a service is performed, regardless of whether	716
the vendor is a delivery vendor.	717

(P) "Used directly in the rendition of a public utility	718
service" means that property that is to be incorporated into and	719
will become a part of the consumer's production, transmission,	720
transportation, or distribution system and that retains its	721
classification as tangible personal property after such	722
incorporation; fuel or power used in the production, transmission,	723
transportation, or distribution system; and tangible personal	724
property used in the repair and maintenance of the production,	725
transmission, transportation, or distribution system, including	726
only such motor vehicles as are specially designed and equipped	727
for such use. Tangible personal property and services used	728
primarily in providing highway transportation for hire are not	729
used directly in the rendition of a public utility service.	730

(Q) "Refining" means removing or separating a desirable	731
product from raw or contaminated materials by distillation or	732
physical, mechanical, or chemical processes.	733

(R) "Assembly" and "assembling" mean attaching or fitting	734
together parts to form a product, but do not include packaging a	735
product.	736

(S) "Manufacturing operation" means a process in which	737
materials are changed, converted, or transformed into a different	738
state or form from which they previously existed and includes	739
refining materials, assembling parts, and preparing raw materials	740
and parts by mixing, measuring, blending, or otherwise committing	741
such materials or parts to the manufacturing process.	742
"Manufacturing operation" does not include packaging.	743

(T) "Fiscal officer" means, with respect to a regional	744
transit authority, the secretary-treasurer thereof, and with	745
respect to a county that is a transit authority, the fiscal	746
officer of the county transit board if one is appointed pursuant	747
to section 306.03 of the Revised Code or the county auditor if the	748
board of county commissioners operates the county transit system.	749

(U) "Transit authority" means a regional transit authority	750
created pursuant to section 306.31 of the Revised Code or a county	751
in which a county transit system is created pursuant to section	752
306.01 of the Revised Code. For the purposes of this chapter, a	753
transit authority must extend to at least the entire area of a	754
single county. A transit authority that includes territory in more	755
than one county must include all the area of the most populous	756
county that is a part of such transit authority. County population	757
shall be measured by the most recent census taken by the United	758
States census bureau.	759

(V) "Legislative authority" means, with respect to a regional	760
transit authority, the board of trustees thereof, and with respect	761
to a county that is a transit authority, the board of county	762
commissioners.	763

(W) "Territory of the transit authority" means all of the	764
area included within the territorial boundaries of a transit	765
authority as they from time to time exist. Such territorial	766
boundaries must at all times include all the area of a single	767
county or all the area of the most populous county that is a part	768
of such transit authority. County population shall be measured by	769
the most recent census taken by the United States census bureau.	770

(X) "Providing a service" means providing or furnishing	771
anything described in division (B)(3) of this section for	772
consideration.	773

(Y)(1)(a) "Automatic data processing" means processing of	774
others' data, including keypunching or similar data entry services	775
together with verification thereof, or providing access to	776
computer equipment for the purpose of processing data.	777

(b) "Computer services" means providing services consisting	778
of specifying computer hardware configurations and evaluating	779
technical processing characteristics, computer programming, and	780
training of computer programmers and operators, provided in	781
conjunction with and to support the sale, lease, or operation of	782
taxable computer equipment or systems.	783

(c) "Electronic information services" means providing access	784
to computer equipment by means of telecommunications equipment for	785
the purpose of either of the following:	786

(i) Examining or acquiring data stored in or accessible to	787
the computer equipment;	788

(ii) Placing data into the computer equipment to be retrieved	789
by designated recipients with access to the computer equipment.	790

(d) "Automatic data processing, computer services, or	791
electronic information services" shall not include personal or	792
professional services.	793

(2) As used in divisions (B)(3)(e) and (Y)(1) of this	794
section, "personal and professional services" means all services	795
other than automatic data processing, computer services, or	796
electronic information services, including but not limited to:	797

(a) Accounting and legal services such as advice on tax	798
matters, asset management, budgetary matters, quality control,	799
information security, and auditing and any other situation where	800
the service provider receives data or information and studies,	801
alters, analyzes, interprets, or adjusts such material;	802

(b) Analyzing business policies and procedures;

803

(c) Identifying management information needs;

804

(d) Feasibility studies, including economic and technical	805
analysis of existing or potential computer hardware or software	806
needs and alternatives;	807

(e) Designing policies, procedures, and custom software for	808
collecting business information, and determining how data should	809
be summarized, sequenced, formatted, processed, controlled, and	810
reported so that it will be meaningful to management;	811

(f) Developing policies and procedures that document how	812
business events and transactions are to be authorized, executed,	813
and controlled;	814

(g) Testing of business procedures;

815

(h) Training personnel in business procedure applications;

816

(i) Providing credit information to users of such information	817
by a consumer reporting agency, as defined in the "Fair Credit	818
Reporting Act," 84 Stat. 1114, 1129 (1970), 15 U.S.C. 1681a(f), or	819
as hereafter amended, including but not limited to gathering,	820
organizing, analyzing, recording, and furnishing such information	821
by any oral, written, graphic, or electronic medium;	822

(j) Providing debt collection services by any oral, written,	823
graphic, or electronic means.	824

The services listed in divisions (Y)(2)(a) to (j) of this	825
section are not automatic data processing or computer services.	826

(Z) "Highway transportation for hire" means the	827
transportation of personal property belonging to others for	828
consideration by any of the following:	829

(1) The holder of a permit or certificate issued by this	830
state or the United States authorizing the holder to engage in	831
transportation of personal property belonging to others for	832
consideration over or on highways, roadways, streets, or any	833
similar public thoroughfare;	834

(2) A person who engages in the transportation of personal	835
property belonging to others for consideration over or on	836
highways, roadways, streets, or any similar public thoroughfare	837
but who could not have engaged in such transportation on December	838
11, 1985, unless the person was the holder of a permit or	839
certificate of the types described in division (Z)(1) of this	840
section;	841

(3) A person who leases a motor vehicle to and operates it	842
for a person described by division (Z)(1) or (2) of this section.	843

(AA)(1) "Telecommunications service" means the electronic	844
transmission, conveyance, or routing of voice, data, audio, video,	845
or any other information or signals to a point, or between or	846
among points. "Telecommunications service" includes such	847
transmission, conveyance, or routing in which computer processing	848
applications are used to act on the form, code, or protocol of the	849
content for purposes of transmission, conveyance, or routing	850
without regard to whether the service is referred to as voice-over	851
internet protocol service or is classified by the federal	852
communications commission as enhanced or value-added.	853
"Telecommunications service" does not include any of the	854
following:	855

(a) Data processing and information services that allow data	856
to be generated, acquired, stored, processed, or retrieved and	857
delivered by an electronic transmission to a consumer where the	858
consumer's primary purpose for the underlying transaction is the	859
processed data or information;	860

(b) Installation or maintenance of wiring or equipment on a	861
customer's premises;	862

(c) Tangible personal property;

863

(d) Advertising, including directory advertising;

864

(e) Billing and collection services provided to third	865
parties;	866

(f) Internet access service;

867

(g) Radio and television audio and video programming	868
services, regardless of the medium, including the furnishing of	869
transmission, conveyance, and routing of such services by the	870
programming service provider. Radio and television audio and video	871
programming services include, but are not limited to, cable	872
service, as defined in 47 U.S.C. 522(6), and audio and video	873
programming services delivered by commercial mobile radio service	874
providers, as defined in 47 C.F.R. 20.3;	875

(h) Ancillary service;

876

(i) Digital products delivered electronically, including	877
software, music, video, reading materials, or ring tones.	878

(2) "Ancillary service" means a service that is associated	879
with or incidental to the provision of telecommunications service,	880
including conference bridging service, detailed telecommunications	881
billing service, directory assistance, vertical service, and voice	882
mail service. As used in this division:	883

(a) "Conference bridging service" means an ancillary service	884
that links two or more participants of an audio or video	885
conference call, including providing a telephone number.	886
"Conference bridging service" does not include telecommunications	887
services used to reach the conference bridge.	888

(b) "Detailed telecommunications billing service" means an	889
ancillary service of separately stating information pertaining to	890
individual calls on a customer's billing statement.	891

(c) "Directory assistance" means an ancillary service of	892
providing telephone number or address information.	893

(d) "Vertical service" means an ancillary service that is	894
offered in connection with one or more telecommunications	895
services, which offers advanced calling features that allow	896
customers to identify callers and manage multiple calls and call	897
connections, including conference bridging service.	898

(e) "Voice mail service" means an ancillary service that	899
enables the customer to store, send, or receive recorded messages.	900
"Voice mail service" does not include any vertical services that	901
the customer may be required to have in order to utilize the voice	902
mail service.	903

(3) "900 service" means an inbound toll telecommunications	904
service purchased by a subscriber that allows the subscriber's	905
customers to call in to the subscriber's prerecorded announcement	906
or live service, and which is typically marketed under the name	907
"900" service and any subsequent numbers designated by the federal	908
communications commission. "900 service" does not include the	909
charge for collection services provided by the seller of the	910
telecommunications service to the subscriber, or services or	911
products sold by the subscriber to the subscriber's customer.	912

(4) "Prepaid calling service" means the right to access	913
exclusively telecommunications services, which must be paid for in	914
advance and which enables the origination of calls using an access	915
number or authorization code, whether manually or electronically	916
dialed, and that is sold in predetermined units of dollars of	917
which the number declines with use in a known amount.	918

(5) "Prepaid wireless calling service" means a	919
telecommunications service that provides the right to utilize	920
mobile telecommunications service as well as other	921
non-telecommunications services, including the download of digital	922
products delivered electronically, and content and ancillary	923
services, that must be paid for in advance and that is sold in	924
predetermined units of dollars of which the number declines with	925
use in a known amount.	926

(6) "Value-added non-voice data service" means a	927
telecommunications service in which computer processing	928
applications are used to act on the form, content, code, or	929
protocol of the information or data primarily for a purpose other	930
than transmission, conveyance, or routing.	931

(7) "Coin-operated telephone service" means a	932
telecommunications service paid for by inserting money into a	933
telephone accepting direct deposits of money to operate.	934

(8) "Customer" has the same meaning as in section 5739.034 of	935
the Revised Code.	936

(BB) "Laundry and dry cleaning services" means removing soil	937
or dirt from towels, linens, articles of clothing, or other fabric	938
items that belong to others and supplying towels, linens, articles	939
of clothing, or other fabric items. "Laundry and dry cleaning	940
services" does not include the provision of self-service	941
facilities for use by consumers to remove soil or dirt from	942
towels, linens, articles of clothing, or other fabric items.	943

(CC) "Magazines distributed as controlled circulation	944
publications" means magazines containing at least twenty-four	945
pages, at least twenty-five per cent editorial content, issued at	946
regular intervals four or more times a year, and circulated	947
without charge to the recipient, provided that such magazines are	948
not owned or controlled by individuals or business concerns which	949
conduct such publications as an auxiliary to, and essentially for	950
the advancement of the main business or calling of, those who own	951
or control them.	952

(DD) "Landscaping and lawn care service" means the services	953
of planting, seeding, sodding, removing, cutting, trimming,	954
pruning, mulching, aerating, applying chemicals, watering,	955
fertilizing, and providing similar services to establish, promote,	956
or control the growth of trees, shrubs, flowers, grass, ground	957
cover, and other flora, or otherwise maintaining a lawn or	958
landscape grown or maintained by the owner for ornamentation or	959
other nonagricultural purpose. However, "landscaping and lawn care	960
service" does not include the providing of such services by a	961
person who has less than five thousand dollars in sales of such	962
services during the calendar year.	963

(EE) "Private investigation and security service" means the	964
performance of any activity for which the provider of such service	965
is required to be licensed pursuant to Chapter 4749. of the	966
Revised Code, or would be required to be so licensed in performing	967
such services in this state, and also includes the services of	968
conducting polygraph examinations and of monitoring or overseeing	969
the activities on or in, or the condition of, the consumer's home,	970
business, or other facility by means of electronic or similar	971
monitoring devices. "Private investigation and security service"	972
does not include special duty services provided by off-duty police	973
officers, deputy sheriffs, and other peace officers regularly	974
employed by the state or a political subdivision.	975

(FF) "Information services" means providing conversation,	976
giving consultation or advice, playing or making a voice or other	977
recording, making or keeping a record of the number of callers,	978
and any other service provided to a consumer by means of a nine	979
hundred telephone call, except when the nine hundred telephone	980
call is the means by which the consumer makes a contribution to a	981
recognized charity.	982

(GG) "Research and development" means designing, creating, or	983
formulating new or enhanced products, equipment, or manufacturing	984
processes, and also means conducting scientific or technological	985
inquiry and experimentation in the physical sciences with the goal	986
of increasing scientific knowledge which may reveal the bases for	987
new or enhanced products, equipment, or manufacturing processes.	988

(HH) "Qualified research and development equipment" means	989
capitalized tangible personal property, and leased personal	990
property that would be capitalized if purchased, used by a person	991
primarily to perform research and development. Tangible personal	992
property primarily used in testing, as defined in division (A)(4)	993
of section 5739.011 of the Revised Code, or used for recording or	994
storing test results, is not qualified research and development	995
equipment unless such property is primarily used by the consumer	996
in testing the product, equipment, or manufacturing process being	997
created, designed, or formulated by the consumer in the research	998
and development activity or in recording or storing such test	999
results.	1000

(II) "Building maintenance and janitorial service" means	1001
cleaning the interior or exterior of a building and any tangible	1002
personal property located therein or thereon, including any	1003
services incidental to such cleaning for which no separate charge	1004
is made. However, "building maintenance and janitorial service"	1005
does not include the providing of such service by a person who has	1006
less than five thousand dollars in sales of such service during	1007
the calendar year.	1008

(JJ) "Employment service" means providing or supplying	1009
personnel, on a temporary or long-term basis, to perform work or	1010
labor under the supervision or control of another, when the	1011
personnel so provided or supplied receive their wages, salary, or	1012
other compensation from the provider or supplier of the employment	1013
service or from a third party that provided or supplied the	1014
personnel to the provider or supplier. "Employment service" does	1015
not include:	1016

(1) Acting as a contractor or subcontractor, where the	1017
personnel performing the work are not under the direct control of	1018
the purchaser.	1019

(2) Medical and health care services.

1020

(3) Supplying personnel to a purchaser pursuant to a contract	1021
of at least one year between the service provider and the	1022
purchaser that specifies that each employee covered under the	1023
contract is assigned to the purchaser on a permanent basis.	1024

(4) Transactions between members of an affiliated group, as	1025
defined in division (B)(3)(e) of this section.	1026

(5) Transactions where the personnel so provided or supplied	1027
by a provider or supplier to a purchaser of an employment service	1028
are then provided or supplied by that purchaser to a third party	1029
as an employment service, except "employment service" does include	1030
the transaction between that purchaser and the third party.	1031

(KK) "Employment placement service" means locating or finding	1032
employment for a person or finding or locating an employee to fill	1033
an available position.	1034

(LL) "Exterminating service" means eradicating or attempting	1035
to eradicate vermin infestations from a building or structure, or	1036
the area surrounding a building or structure, and includes	1037
activities to inspect, detect, or prevent vermin infestation of a	1038
building or structure.	1039

(MM) "Physical fitness facility service" means all	1040
transactions by which a membership is granted, maintained, or	1041
renewed, including initiation fees, membership dues, renewal fees,	1042
monthly minimum fees, and other similar fees and dues, by a	1043
physical fitness facility such as an athletic club, health spa, or	1044
gymnasium, which entitles the member to use the facility for	1045
physical exercise.	1046

(NN) "Recreation and sports club service" means all	1047
transactions by which a membership is granted, maintained, or	1048
renewed, including initiation fees, membership dues, renewal fees,	1049
monthly minimum fees, and other similar fees and dues, by a	1050
recreation and sports club, which entitles the member to use the	1051
facilities of the organization. "Recreation and sports club" means	1052
an organization that has ownership of, or controls or leases on a	1053
continuing, long-term basis, the facilities used by its members	1054
and includes an aviation club, gun or shooting club, yacht club,	1055
card club, swimming club, tennis club, golf club, country club,	1056
riding club, amateur sports club, or similar organization.	1057

(OO) "Livestock" means farm animals commonly raised for food	1058
or food production, and includes but is not limited to cattle,	1059
sheep, goats, swine, and poultry. "Livestock" does not include	1060
invertebrates, fish, amphibians, reptiles, horses, domestic pets,	1061
animals for use in laboratories or for exhibition, or other	1062
animals not commonly raised for food or food production.	1063

(PP) "Livestock structure" means a building or structure used	1064
exclusively for the housing, raising, feeding, or sheltering of	1065
livestock, and includes feed storage or handling structures and	1066
structures for livestock waste handling.	1067

(QQ) "Horticulture" means the growing, cultivation, and	1068
production of flowers, fruits, herbs, vegetables, sod, mushrooms,	1069
and nursery stock. As used in this division, "nursery stock" has	1070
the same meaning as in section 927.51 of the Revised Code.	1071

(RR) "Horticulture structure" means a building or structure	1072
used exclusively for the commercial growing, raising, or	1073
overwintering of horticultural products, and includes the area	1074
used for stocking, storing, and packing horticultural products	1075
when done in conjunction with the production of those products.	1076

(SS) "Newspaper" means an unbound publication bearing a title	1077
or name that is regularly published, at least as frequently as	1078
biweekly, and distributed from a fixed place of business to the	1079
public in a specific geographic area, and that contains a	1080
substantial amount of news matter of international, national, or	1081
local events of interest to the general public.	1082

(TT) "Professional racing team" means a person that employs	1083
at least twenty full-time employees for the purpose of conducting	1084
a motor vehicle racing business for profit. The person must	1085
conduct the business with the purpose of racing one or more motor	1086
racing vehicles in at least ten competitive professional racing	1087
events each year that comprise all or part of a motor racing	1088
series sanctioned by one or more motor racing sanctioning	1089
organizations. A "motor racing vehicle" means a vehicle for which	1090
the chassis, engine, and parts are designed exclusively for motor	1091
racing, and does not include a stock or production model vehicle	1092
that may be modified for use in racing. For the purposes of this	1093
division:	1094

(1) A "competitive professional racing event" is a motor	1095
vehicle racing event sanctioned by one or more motor racing	1096
sanctioning organizations, at which aggregate cash prizes in	1097
excess of eight hundred thousand dollars are awarded to the	1098
competitors.	1099

(2) "Full-time employee" means an individual who is employed	1100
for consideration for thirty-five or more hours a week, or who	1101
renders any other standard of service generally accepted by custom	1102
or specified by contract as full-time employment.	1103

(UU)(1) "Lease" or "rental" means any transfer of the	1104
possession or control of tangible personal property for a fixed or	1105
indefinite term, for consideration. "Lease" or "rental" includes	1106
future options to purchase or extend, and agreements described in	1107
26 U.S.C. 7701(h)(1) covering motor vehicles and trailers where	1108
the amount of consideration may be increased or decreased by	1109
reference to the amount realized upon the sale or disposition of	1110
the property. "Lease" or "rental" does not include:	1111

(a) A transfer of possession or control of tangible personal	1112
property under a security agreement or a deferred payment plan	1113
that requires the transfer of title upon completion of the	1114
required payments;	1115

(b) A transfer of possession or control of tangible personal	1116
property under an agreement that requires the transfer of title	1117
upon completion of required payments and payment of an option	1118
price that does not exceed the greater of one hundred dollars or	1119
one per cent of the total required payments;	1120

(c) Providing tangible personal property along with an	1121
operator for a fixed or indefinite period of time, if the operator	1122
is necessary for the property to perform as designed. For purposes	1123
of this division, the operator must do more than maintain,	1124
inspect, or set-up the tangible personal property.	1125

(2) "Lease" and "rental," as defined in division (UU) of this	1126
section, shall not apply to leases or rentals that exist before	1127
June 26, 2003.	1128

(3) "Lease" and "rental" have the same meaning as in division	1129
(UU)(1) of this section regardless of whether a transaction is	1130
characterized as a lease or rental under generally accepted	1131
accounting principles, the Internal Revenue Code, Title XIII of	1132
the Revised Code, or other federal, state, or local laws.	1133

(VV) "Mobile telecommunications service" has the same meaning	1134
as in the "Mobile Telecommunications Sourcing Act," Pub. L. No.	1135
106-252, 114 Stat. 631 (2000), 4 U.S.C.A. 124(7), as amended, and,	1136
on and after August 1, 2003, includes related fees and ancillary	1137
services, including universal service fees, detailed billing	1138
service, directory assistance, service initiation, voice mail	1139
service, and vertical services, such as caller ID and three-way	1140
calling.	1141

(WW) "Certified service provider" has the same meaning as in	1142
section 5740.01 of the Revised Code.	1143

(XX) "Satellite broadcasting service" means the distribution	1144
or broadcasting of programming or services by satellite directly	1145
to the subscriber's receiving equipment without the use of ground	1146
receiving or distribution equipment, except the subscriber's	1147
receiving equipment or equipment used in the uplink process to the	1148
satellite, and includes all service and rental charges, premium	1149
channels or other special services, installation and repair	1150
service charges, and any other charges having any connection with	1151
the provision of the satellite broadcasting service.	1152

(YY) "Tangible personal property" means personal property	1153
that can be seen, weighed, measured, felt, or touched, or that is	1154
in any other manner perceptible to the senses. For purposes of	1155
this chapter and Chapter 5741. of the Revised Code, "tangible	1156
personal property" includes motor vehicles, electricity, water,	1157
gas, steam, and prewritten computer software.	1158

(ZZ) "Direct mail" means printed material delivered or	1159
distributed by United States mail or other delivery service to a	1160
mass audience or to addressees on a mailing list provided by the	1161
consumer or at the direction of the consumer when the cost of the	1162
items are not billed directly to the recipients. "Direct mail"	1163
includes tangible personal property supplied directly or	1164
indirectly by the consumer to the direct mail vendor for inclusion	1165
in the package containing the printed material. "Direct mail" does	1166
not include multiple items of printed material delivered to a	1167
single address.	1168

(AAA) "Computer" means an electronic device that accepts	1169
information in digital or similar form and manipulates it for a	1170
result based on a sequence of instructions.	1171

(BBB) "Computer software" means a set of coded instructions	1172
designed to cause a computer or automatic data processing	1173
equipment to perform a task.	1174

(CCC) "Delivered electronically" means delivery of computer	1175
software from the seller to the purchaser by means other than	1176
tangible storage media.	1177

(DDD) "Prewritten computer software" means computer software,	1178
including prewritten upgrades, that is not designed and developed	1179
by the author or other creator to the specifications of a specific	1180
purchaser. The combining of two or more prewritten computer	1181
software programs or prewritten portions thereof does not cause	1182
the combination to be other than prewritten computer software.	1183
"Prewritten computer software" includes software designed and	1184
developed by the author or other creator to the specifications of	1185
a specific purchaser when it is sold to a person other than the	1186
purchaser. If a person modifies or enhances computer software of	1187
which the person is not the author or creator, the person shall be	1188
deemed to be the author or creator only of such person's	1189
modifications or enhancements. Prewritten computer software or a	1190
prewritten portion thereof that is modified or enhanced to any	1191
degree, where such modification or enhancement is designed and	1192
developed to the specifications of a specific purchaser, remains	1193
prewritten computer software; provided, however, that where there	1194
is a reasonable, separately stated charge or an invoice or other	1195
statement of the price given to the purchaser for the modification	1196
or enhancement, the modification or enhancement shall not	1197
constitute prewritten computer software.	1198

(EEE)(1) "Food" means substances, whether in liquid,	1199
concentrated, solid, frozen, dried, or dehydrated form, that are	1200
sold for ingestion or chewing by humans and are consumed for their	1201
taste or nutritional value. "Food" does not include alcoholic	1202
beverages, dietary supplements, soft drinks, or tobacco.	1203

(2) As used in division (EEE)(1) of this section:

1204

(a) "Alcoholic beverages" means beverages that are suitable	1205
for human consumption and contain one-half of one per cent or more	1206
of alcohol by volume.	1207

(b) "Dietary supplements" means any product, other than	1208
tobacco, that is intended to supplement the diet and that is	1209
intended for ingestion in tablet, capsule, powder, softgel,	1210
gelcap, or liquid form, or, if not intended for ingestion in such	1211
a form, is not represented as conventional food for use as a sole	1212
item of a meal or of the diet; that is required to be labeled as a	1213
dietary supplement, identifiable by the "supplement facts" box	1214
found on the label, as required by 21 C.F.R. 101.36; and that	1215
contains one or more of the following dietary ingredients:	1216

(i) A vitamin;

1217

(ii) A mineral;

1218

(iii) An herb or other botanical;

1219

(iv) An amino acid;

1220

(v) A dietary substance for use by humans to supplement the	1221
diet by increasing the total dietary intake;	1222

(vi) A concentrate, metabolite, constituent, extract, or	1223
combination of any ingredient described in divisions	1224
(EEE)(2)(b)(i) to (v) of this section.	1225

(c) "Soft drinks" means nonalcoholic beverages that contain	1226
natural or artificial sweeteners. "Soft drinks" does not include	1227
beverages that contain milk or milk products, soy, rice, or	1228
similar milk substitutes, or that contains greater than fifty per	1229
cent vegetable or fruit juice by volume.	1230

(d) "Tobacco" means cigarettes, cigars, chewing or pipe	1231
tobacco, or any other item that contains tobacco.	1232

(FFF) "Drug" means a compound, substance, or preparation, and	1233
any component of a compound, substance, or preparation, other than	1234
food, dietary supplements, or alcoholic beverages that is	1235
recognized in the official United States pharmacopoeia, official	1236
homeopathic pharmacopoeia of the United States, or official	1237
national formulary, and supplements to them; is intended for use	1238
in the diagnosis, cure, mitigation, treatment, or prevention of	1239
disease; or is intended to affect the structure or any function of	1240
the body.	1241

(GGG) "Prescription" means an order, formula, or recipe	1242
issued in any form of oral, written, electronic, or other means of	1243
transmission by a duly licensed practitioner authorized by the	1244
laws of this state to issue a prescription.	1245

(HHH) "Durable medical equipment" means equipment, including	1246
repair and replacement parts for such equipment, that can	1247
withstand repeated use, is primarily and customarily used to serve	1248
a medical purpose, generally is not useful to a person in the	1249
absence of illness or injury, and is not worn in or on the body.	1250
"Durable medical equipment" does not include mobility enhancing	1251
equipment.	1252

(III) "Mobility enhancing equipment" means equipment,	1253
including repair and replacement parts for such equipment, that is	1254
primarily and customarily used to provide or increase the ability	1255
to move from one place to another and is appropriate for use	1256
either in a home or a motor vehicle, that is not generally used by	1257
persons with normal mobility, and that does not include any motor	1258
vehicle or equipment on a motor vehicle normally provided by a	1259
motor vehicle manufacturer. "Mobility enhancing equipment" does	1260
not include durable medical equipment.	1261

(JJJ) "Prosthetic device" means a replacement, corrective, or	1262
supportive device, including repair and replacement parts for the	1263
device, worn on or in the human body to artificially replace a	1264
missing portion of the body, prevent or correct physical deformity	1265
or malfunction, or support a weak or deformed portion of the body.	1266
As used in this division, "prosthetic device" does not include	1267
corrective eyeglasses, contact lenses, or dental prosthesis.	1268

(KKK)(1) "Fractional aircraft ownership program" means a	1269
program in which persons within an affiliated group sell and	1270
manage fractional ownership program aircraft, provided that at	1271
least one hundred airworthy aircraft are operated in the program	1272
and the program meets all of the following criteria:	1273

(a) Management services are provided by at least one program	1274
manager within an affiliated group on behalf of the fractional	1275
owners.	1276

(b) Each program aircraft is owned or possessed by at least	1277
one fractional owner.	1278

(c) Each fractional owner owns or possesses at least a	1279
one-sixteenth interest in at least one fixed-wing program	1280
aircraft.	1281

(d) A dry-lease aircraft interchange arrangement is in effect	1282
among all of the fractional owners.	1283

(e) Multi-year program agreements are in effect regarding the	1284
fractional ownership, management services, and dry-lease aircraft	1285
interchange arrangement aspects of the program.	1286

(2) As used in division (KKK)(1) of this section:

1287

(a) "Affiliated group" has the same meaning as in division	1288
(B)(3)(e) of this section.	1289

(b) "Fractional owner" means a person that owns or possesses	1290
at least a one-sixteenth interest in a program aircraft and has	1291
entered into the agreements described in division (KKK)(1)(e) of	1292
this section.	1293

(c) "Fractional ownership program aircraft" or "program	1294
aircraft" means a turbojet aircraft that is owned or possessed by	1295
a fractional owner and that has been included in a dry-lease	1296
aircraft interchange arrangement and agreement under divisions	1297
(KKK)(1)(d) and (e) of this section, or an aircraft a program	1298
manager owns or possesses primarily for use in a fractional	1299
aircraft ownership program.	1300

(d) "Management services" means administrative and aviation	1301
support services furnished under a fractional aircraft ownership	1302
program in accordance with a management services agreement under	1303
division (KKK)(1)(e) of this section, and offered by the program	1304
manager to the fractional owners, including, at a minimum, the	1305
establishment and implementation of safety guidelines; the	1306
coordination of the scheduling of the program aircraft and crews;	1307
program aircraft maintenance; program aircraft insurance; crew	1308
training for crews employed, furnished, or contracted by the	1309
program manager or the fractional owner; the satisfaction of	1310
record-keeping requirements; and the development and use of an	1311
operations manual and a maintenance manual for the fractional	1312
aircraft ownership program.	1313

(e) "Program manager" means the person that offers management	1314
services to fractional owners pursuant to a management services	1315
agreement under division (KKK)(1)(e) of this section.	1316

Section 2. That existing sections 135.353 and 5739.01 of the	1317
Revised Code are hereby repealed.	1318

Section 3. The amendment by this act to division (JJ) of	1319
section 5739.01 of the Revised Code is essential to the	1320
implementation of a tax levy. Therefore, under Ohio Constitution,	1321
Article II, Section 1d, the amendment goes into effect January 1,	1322
2007.	1323