As Introduced

127th General Assembly Regular Session 2007-2008

H. B. No. 369

Representative Lundy 

Cosponsors: Representatives Letson, Yuko, Brown, Williams, B., DeGeeter, Fende, Book, Luckie 

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A BILL

To amend sections 5739.02 and 5739.05 of the Revised

1

Code to provide a two-day sales tax "holiday" each

2

August during which sales of back-to-school

3

clothing, school supplies, computers, and computer

4

accessories are exempt from sales and use taxes.

5

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

Section 1. That sections 5739.02 and 5739.05 of the Revised	6
Code be amended to read as follows:	7

Sec. 5739.02.  For the purpose of providing revenue with	8
which to meet the needs of the state, for the use of the general	9
revenue fund of the state, for the purpose of securing a thorough	10
and efficient system of common schools throughout the state, for	11
the purpose of affording revenues, in addition to those from	12
general property taxes, permitted under constitutional	13
limitations, and from other sources, for the support of local	14
governmental functions, and for the purpose of reimbursing the	15
state for the expense of administering this chapter, an excise tax	16
is hereby levied on each retail sale made in this state.	17

(A)(1) The tax shall be collected as provided in section	18
5739.025 of the Revised Code, provided that on and after July 1,	19
2003, and on or before June 30, 2005, the rate of tax shall be six	20
per cent. On and after July 1, 2005, the rate of the tax shall be	21
five and one-half per cent. The tax applies and is collectible	22
when the sale is made, regardless of the time when the price is	23
paid or delivered.	24

(2) In the case of the lease or rental, with a fixed term of	25
more than thirty days or an indefinite term with a minimum period	26
of more than thirty days, of any motor vehicles designed by the	27
manufacturer to carry a load of not more than one ton, watercraft,	28
outboard motor, or aircraft, or of any tangible personal property,	29
other than motor vehicles designed by the manufacturer to carry a	30
load of more than one ton, to be used by the lessee or renter	31
primarily for business purposes, the tax shall be collected by the	32
vendor at the time the lease or rental is consummated and shall be	33
calculated by the vendor on the basis of the total amount to be	34
paid by the lessee or renter under the lease agreement. If the	35
total amount of the consideration for the lease or rental includes	36
amounts that are not calculated at the time the lease or rental is	37
executed, the tax shall be calculated and collected by the vendor	38
at the time such amounts are billed to the lessee or renter. In	39
the case of an open-end lease or rental, the tax shall be	40
calculated by the vendor on the basis of the total amount to be	41
paid during the initial fixed term of the lease or rental, and for	42
each subsequent renewal period as it comes due. As used in this	43
division, "motor vehicle" has the same meaning as in section	44
4501.01 of the Revised Code, and "watercraft" includes an outdrive	45
unit attached to the watercraft.	46

A lease with a renewal clause and a termination penalty or	47
similar provision that applies if the renewal clause is not	48
exercised is presumed to be a sham transaction. In such a case,	49
the tax shall be calculated and paid on the basis of the entire	50
length of the lease period, including any renewal periods, until	51
the termination penalty or similar provision no longer applies.	52
The taxpayer shall bear the burden, by a preponderance of the	53
evidence, that the transaction or series of transactions is not a	54
sham transaction.	55

(3) Except as provided in division (A)(2) of this section, in	56
the case of a sale, the price of which consists in whole or in	57
part of the lease or rental of tangible personal property, the tax	58
shall be measured by the installments of that lease or rental.	59

(4) In the case of a sale of a physical fitness facility	60
service or recreation and sports club service, the price of which	61
consists in whole or in part of a membership for the receipt of	62
the benefit of the service, the tax applicable to the sale shall	63
be measured by the installments thereof.	64

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

65

(1) Sales to the state or any of its political subdivisions,	66
or to any other state or its political subdivisions if the laws of	67
that state exempt from taxation sales made to this state and its	68
political subdivisions;	69

(2) Sales of food for human consumption off the premises	70
where sold;	71

(3) Sales of food sold to students only in a cafeteria,	72
dormitory, fraternity, or sorority maintained in a private,	73
public, or parochial school, college, or university;	74

(4) Sales of newspapers and of magazine subscriptions and	75
sales or transfers of magazines distributed as controlled	76
circulation publications;	77

(5) The furnishing, preparing, or serving of meals without	78
charge by an employer to an employee provided the employer records	79
the meals as part compensation for services performed or work	80
done;	81

(6) Sales of motor fuel upon receipt, use, distribution, or	82
sale of which in this state a tax is imposed by the law of this	83
state, but this exemption shall not apply to the sale of motor	84
fuel on which a refund of the tax is allowable under division (A)	85
of section 5735.14 of the Revised Code; and the tax commissioner	86
may deduct the amount of tax levied by this section applicable to	87
the price of motor fuel when granting a refund of motor fuel tax	88
pursuant to division (A) of section 5735.14 of the Revised Code	89
and shall cause the amount deducted to be paid into the general	90
revenue fund of this state;	91

(7) Sales of natural gas by a natural gas company, of water	92
by a water-works company, or of steam by a heating company, if in	93
each case the thing sold is delivered to consumers through pipes	94
or conduits, and all sales of communications services by a	95
telegraph company, all terms as defined in section 5727.01 of the	96
Revised Code, and sales of electricity delivered through wires;	97

(8) Casual sales by a person, or auctioneer employed directly	98
by the person to conduct such sales, except as to such sales of	99
motor vehicles, watercraft or outboard motors required to be	100
titled under section 1548.06 of the Revised Code, watercraft	101
documented with the United States coast guard, snowmobiles, and	102
all-purpose vehicles as defined in section 4519.01 of the Revised	103
Code;	104

(9) Sales of services or tangible personal property, other	105
than motor vehicles, mobile homes, and manufactured homes, by	106
churches, organizations exempt from taxation under section	107
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit	108
organizations operated exclusively for charitable purposes as	109
defined in division (B)(12) of this section, provided that the	110
number of days on which such tangible personal property or	111
services, other than items never subject to the tax, are sold does	112
not exceed six in any calendar year. If the number of days on	113
which such sales are made exceeds six in any calendar year, the	114
church or organization shall be considered to be engaged in	115
business and all subsequent sales by it shall be subject to the	116
tax. In counting the number of days, all sales by groups within a	117
church or within an organization shall be considered to be sales	118
of that church or organization, except that sales made by separate	119
student clubs and other groups of students of a primary or	120
secondary school, and sales made by a parent-teacher association,	121
booster group, or similar organization that raises money to	122
support or fund curricular or extracurricular activities of a	123
primary or secondary school, shall not be considered to be sales	124
of such school, and sales by each such club, group, association,	125
or organization shall be counted separately for purposes of the	126
six-day limitation. This division does not apply to sales by a	127
noncommercial educational radio or television broadcasting	128
station.	129

(10) Sales not within the taxing power of this state under	130
the Constitution of the United States;	131

(11) Except for transactions that are sales under division	132
(B)(3)(r) of section 5739.01 of the Revised Code, the	133
transportation of persons or property, unless the transportation	134
is by a private investigation and security service;	135

(12) Sales of tangible personal property or services to	136
churches, to organizations exempt from taxation under section	137
501(c)(3) of the Internal Revenue Code of 1986, and to any other	138
nonprofit organizations operated exclusively for charitable	139
purposes in this state, no part of the net income of which inures	140
to the benefit of any private shareholder or individual, and no	141
substantial part of the activities of which consists of carrying	142
on propaganda or otherwise attempting to influence legislation;	143
sales to offices administering one or more homes for the aged or	144
one or more hospital facilities exempt under section 140.08 of the	145
Revised Code; and sales to organizations described in division (D)	146
of section 5709.12 of the Revised Code.	147

"Charitable purposes" means the relief of poverty; the	148
improvement of health through the alleviation of illness, disease,	149
or injury; the operation of an organization exclusively for the	150
provision of professional, laundry, printing, and purchasing	151
services to hospitals or charitable institutions; the operation of	152
a home for the aged, as defined in section 5701.13 of the Revised	153
Code; the operation of a radio or television broadcasting station	154
that is licensed by the federal communications commission as a	155
noncommercial educational radio or television station; the	156
operation of a nonprofit animal adoption service or a county	157
humane society; the promotion of education by an institution of	158
learning that maintains a faculty of qualified instructors,	159
teaches regular continuous courses of study, and confers a	160
recognized diploma upon completion of a specific curriculum; the	161
operation of a parent-teacher association, booster group, or	162
similar organization primarily engaged in the promotion and	163
support of the curricular or extracurricular activities of a	164
primary or secondary school; the operation of a community or area	165
center in which presentations in music, dramatics, the arts, and	166
related fields are made in order to foster public interest and	167
education therein; the production of performances in music,	168
dramatics, and the arts; or the promotion of education by an	169
organization engaged in carrying on research in, or the	170
dissemination of, scientific and technological knowledge and	171
information primarily for the public.	172

Nothing in this division shall be deemed to exempt sales to	173
any organization for use in the operation or carrying on of a	174
trade or business, or sales to a home for the aged for use in the	175
operation of independent living facilities as defined in division	176
(A) of section 5709.12 of the Revised Code.	177

(13) Building and construction materials and services sold to	178
construction contractors for incorporation into a structure or	179
improvement to real property under a construction contract with	180
this state or a political subdivision of this state, or with the	181
United States government or any of its agencies; building and	182
construction materials and services sold to construction	183
contractors for incorporation into a structure or improvement to	184
real property that are accepted for ownership by this state or any	185
of its political subdivisions, or by the United States government	186
or any of its agencies at the time of completion of the structures	187
or improvements; building and construction materials sold to	188
construction contractors for incorporation into a horticulture	189
structure or livestock structure for a person engaged in the	190
business of horticulture or producing livestock; building	191
materials and services sold to a construction contractor for	192
incorporation into a house of public worship or religious	193
education, or a building used exclusively for charitable purposes	194
under a construction contract with an organization whose purpose	195
is as described in division (B)(12) of this section; building	196
materials and services sold to a construction contractor for	197
incorporation into a building under a construction contract with	198
an organization exempt from taxation under section 501(c)(3) of	199
the Internal Revenue Code of 1986 when the building is to be used	200
exclusively for the organization's exempt purposes; building and	201
construction materials sold for incorporation into the original	202
construction of a sports facility under section 307.696 of the	203
Revised Code; and building and construction materials and services	204
sold to a construction contractor for incorporation into real	205
property outside this state if such materials and services, when	206
sold to a construction contractor in the state in which the real	207
property is located for incorporation into real property in that	208
state, would be exempt from a tax on sales levied by that state;	209

(14) Sales of ships or vessels or rail rolling stock used or	210
to be used principally in interstate or foreign commerce, and	211
repairs, alterations, fuel, and lubricants for such ships or	212
vessels or rail rolling stock;	213

(15) Sales to persons primarily engaged in any of the	214
activities mentioned in division (B)(42)(a) or (g) of this	215
section, to persons engaged in making retail sales, or to persons	216
who purchase for sale from a manufacturer tangible personal	217
property that was produced by the manufacturer in accordance with	218
specific designs provided by the purchaser, of packages, including	219
material, labels, and parts for packages, and of machinery,	220
equipment, and material for use primarily in packaging tangible	221
personal property produced for sale, including any machinery,	222
equipment, and supplies used to make labels or packages, to	223
prepare packages or products for labeling, or to label packages or	224
products, by or on the order of the person doing the packaging, or	225
sold at retail. "Packages" includes bags, baskets, cartons,	226
crates, boxes, cans, bottles, bindings, wrappings, and other	227
similar devices and containers, but does not include motor	228
vehicles or bulk tanks, trailers, or similar devices attached to	229
motor vehicles. "Packaging" means placing in a package. Division	230
(B)(15) of this section does not apply to persons engaged in	231
highway transportation for hire.	232

(16) Sales of food to persons using food stamp benefits to	233
purchase the food. As used in this division, "food" has the same	234
meaning as in the "Food Stamp Act of 1977," 91 Stat. 958, 7 U.S.C.	235
2012, as amended, and federal regulations adopted pursuant to that	236
act.	237

(17) Sales to persons engaged in farming, agriculture,	238
horticulture, or floriculture, of tangible personal property for	239
use or consumption directly in the production by farming,	240
agriculture, horticulture, or floriculture of other tangible	241
personal property for use or consumption directly in the	242
production of tangible personal property for sale by farming,	243
agriculture, horticulture, or floriculture; or material and parts	244
for incorporation into any such tangible personal property for use	245
or consumption in production; and of tangible personal property	246
for such use or consumption in the conditioning or holding of	247
products produced by and for such use, consumption, or sale by	248
persons engaged in farming, agriculture, horticulture, or	249
floriculture, except where such property is incorporated into real	250
property;	251

(18) Sales of drugs for a human being that may be dispensed	252
only pursuant to a prescription; insulin as recognized in the	253
official United States pharmacopoeia; urine and blood testing	254
materials when used by diabetics or persons with hypoglycemia to	255
test for glucose or acetone; hypodermic syringes and needles when	256
used by diabetics for insulin injections; epoetin alfa when	257
purchased for use in the treatment of persons with medical	258
disease; hospital beds when purchased by hospitals, nursing homes,	259
or other medical facilities; and medical oxygen and medical	260
oxygen-dispensing equipment when purchased by hospitals, nursing	261
homes, or other medical facilities;	262

(19) Sales of prosthetic devices, durable medical equipment	263
for home use, or mobility enhancing equipment, when made pursuant	264
to a prescription and when such devices or equipment are for use	265
by a human being.	266

(20) Sales of emergency and fire protection vehicles and	267
equipment to nonprofit organizations for use solely in providing	268
fire protection and emergency services, including trauma care and	269
emergency medical services, for political subdivisions of the	270
state;	271

(21) Sales of tangible personal property manufactured in this	272
state, if sold by the manufacturer in this state to a retailer for	273
use in the retail business of the retailer outside of this state	274
and if possession is taken from the manufacturer by the purchaser	275
within this state for the sole purpose of immediately removing the	276
same from this state in a vehicle owned by the purchaser;	277

(22) Sales of services provided by the state or any of its	278
political subdivisions, agencies, instrumentalities, institutions,	279
or authorities, or by governmental entities of the state or any of	280
its political subdivisions, agencies, instrumentalities,	281
institutions, or authorities;	282

(23) Sales of motor vehicles to nonresidents of this state	283
upon the presentation of an affidavit executed in this state by	284
the nonresident purchaser affirming that the purchaser is a	285
nonresident of this state, that possession of the motor vehicle is	286
taken in this state for the sole purpose of immediately removing	287
it from this state, that the motor vehicle will be permanently	288
titled and registered in another state, and that the motor vehicle	289
will not be used in this state;	290

(24) Sales to persons engaged in the preparation of eggs for	291
sale of tangible personal property used or consumed directly in	292
such preparation, including such tangible personal property used	293
for cleaning, sanitizing, preserving, grading, sorting, and	294
classifying by size; packages, including material and parts for	295
packages, and machinery, equipment, and material for use in	296
packaging eggs for sale; and handling and transportation equipment	297
and parts therefor, except motor vehicles licensed to operate on	298
public highways, used in intraplant or interplant transfers or	299
shipment of eggs in the process of preparation for sale, when the	300
plant or plants within or between which such transfers or	301
shipments occur are operated by the same person. "Packages"	302
includes containers, cases, baskets, flats, fillers, filler flats,	303
cartons, closure materials, labels, and labeling materials, and	304
"packaging" means placing therein.	305

(25)(a) Sales of water to a consumer for residential use,	306
except the sale of bottled water, distilled water, mineral water,	307
carbonated water, or ice;	308

(b) Sales of water by a nonprofit corporation engaged	309
exclusively in the treatment, distribution, and sale of water to	310
consumers, if such water is delivered to consumers through pipes	311
or tubing.	312

(26) Fees charged for inspection or reinspection of motor	313
vehicles under section 3704.14 of the Revised Code;	314

(27) Sales to persons licensed to conduct a food service	315
operation pursuant to section 3717.43 of the Revised Code, of	316
tangible personal property primarily used directly for the	317
following:	318

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

319

(b) To preserve food that has been or will be prepared for	320
human consumption for sale by the food service operator, not	321
including tangible personal property used to display food for	322
selection by the consumer;	323

(c) To clean tangible personal property used to prepare or	324
serve food for human consumption for sale.	325

(28) Sales of animals by nonprofit animal adoption services	326
or county humane societies;	327

(29) Sales of services to a corporation described in division	328
(A) of section 5709.72 of the Revised Code, and sales of tangible	329
personal property that qualifies for exemption from taxation under	330
section 5709.72 of the Revised Code;	331

(30) Sales and installation of agricultural land tile, as	332
defined in division (B)(5)(a) of section 5739.01 of the Revised	333
Code;	334

(31) Sales and erection or installation of portable grain	335
bins, as defined in division (B)(5)(b) of section 5739.01 of the	336
Revised Code;	337

(32) The sale, lease, repair, and maintenance of, parts for,	338
or items attached to or incorporated in, motor vehicles that are	339
primarily used for transporting tangible personal property	340
belonging to others by a person engaged in highway transportation	341
for hire, except for packages and packaging used for the	342
transportation of tangible personal property;	343

(33) Sales to the state headquarters of any veterans'	344
organization in this state that is either incorporated and issued	345
a charter by the congress of the United States or is recognized by	346
the United States veterans administration, for use by the	347
headquarters;	348

(34) Sales to a telecommunications service vendor, mobile	349
telecommunications service vendor, or satellite broadcasting	350
service vendor of tangible personal property and services used	351
directly and primarily in transmitting, receiving, switching, or	352
recording any interactive, one- or two-way electromagnetic	353
communications, including voice, image, data, and information,	354
through the use of any medium, including, but not limited to,	355
poles, wires, cables, switching equipment, computers, and record	356
storage devices and media, and component parts for the tangible	357
personal property. The exemption provided in this division shall	358
be in lieu of all other exemptions under division (B)(42)(a) of	359
this section to which the vendor may otherwise be entitled, based	360
upon the use of the thing purchased in providing the	361
telecommunications, mobile telecommunications, or satellite	362
broadcasting service.	363

(35)(a) Sales where the purpose of the consumer is to use or	364
consume the things transferred in making retail sales and	365
consisting of newspaper inserts, catalogues, coupons, flyers, gift	366
certificates, or other advertising material that prices and	367
describes tangible personal property offered for retail sale.	368

(b) Sales to direct marketing vendors of preliminary	369
materials such as photographs, artwork, and typesetting that will	370
be used in printing advertising material; of printed matter that	371
offers free merchandise or chances to win sweepstake prizes and	372
that is mailed to potential customers with advertising material	373
described in division (B)(35)(a) of this section; and of equipment	374
such as telephones, computers, facsimile machines, and similar	375
tangible personal property primarily used to accept orders for	376
direct marketing retail sales.	377

(c) Sales of automatic food vending machines that preserve	378
food with a shelf life of forty-five days or less by refrigeration	379
and dispense it to the consumer.	380

For purposes of division (B)(35) of this section, "direct	381
marketing" means the method of selling where consumers order	382
tangible personal property by United States mail, delivery	383
service, or telecommunication and the vendor delivers or ships the	384
tangible personal property sold to the consumer from a warehouse,	385
catalogue distribution center, or similar fulfillment facility by	386
means of the United States mail, delivery service, or common	387
carrier.	388

(36) Sales to a person engaged in the business of	389
horticulture or producing livestock of materials to be	390
incorporated into a horticulture structure or livestock structure;	391

(37) Sales of personal computers, computer monitors, computer	392
keyboards, modems, and other peripheral computer equipment to an	393
individual who is licensed or certified to teach in an elementary	394
or a secondary school in this state for use by that individual in	395
preparation for teaching elementary or secondary school students;	396

(38) Sales to a professional racing team of any of the	397
following:	398

(a) Motor racing vehicles;

399

(b) Repair services for motor racing vehicles;

400

(c) Items of property that are attached to or incorporated in	401
motor racing vehicles, including engines, chassis, and all other	402
components of the vehicles, and all spare, replacement, and	403
rebuilt parts or components of the vehicles; except not including	404
tires, consumable fluids, paint, and accessories consisting of	405
instrumentation sensors and related items added to the vehicle to	406
collect and transmit data by means of telemetry and other forms of	407
communication.	408

(39) Sales of used manufactured homes and used mobile homes,	409
as defined in section 5739.0210 of the Revised Code, made on or	410
after January 1, 2000;	411

(40) Sales of tangible personal property and services to a	412
provider of electricity used or consumed directly and primarily in	413
generating, transmitting, or distributing electricity for use by	414
others, including property that is or is to be incorporated into	415
and will become a part of the consumer's production, transmission,	416
or distribution system and that retains its classification as	417
tangible personal property after incorporation; fuel or power used	418
in the production, transmission, or distribution of electricity;	419
and tangible personal property and services used in the repair and	420
maintenance of the production, transmission, or distribution	421
system, including only those motor vehicles as are specially	422
designed and equipped for such use. The exemption provided in this	423
division shall be in lieu of all other exemptions in division	424
(B)(42)(a) of this section to which a provider of electricity may	425
otherwise be entitled based on the use of the tangible personal	426
property or service purchased in generating, transmitting, or	427
distributing electricity.	428

(41) Sales to a person providing services under division	429
(B)(3)(r) of section 5739.01 of the Revised Code of tangible	430
personal property and services used directly and primarily in	431
providing taxable services under that section.	432

(42) Sales where the purpose of the purchaser is to do any of	433
the following:	434

(a) To incorporate the thing transferred as a material or a	435
part into tangible personal property to be produced for sale by	436
manufacturing, assembling, processing, or refining; or to use or	437
consume the thing transferred directly in producing tangible	438
personal property for sale by mining, including, without	439
limitation, the extraction from the earth of all substances that	440
are classed geologically as minerals, production of crude oil and	441
natural gas, farming, agriculture, horticulture, or floriculture,	442
or directly in the rendition of a public utility service, except	443
that the sales tax levied by this section shall be collected upon	444
all meals, drinks, and food for human consumption sold when	445
transporting persons. Persons engaged in rendering farming,	446
agricultural, horticultural, or floricultural services, and	447
services in the exploration for, and production of, crude oil and	448
natural gas, for others are deemed engaged directly in farming,	449
agriculture, horticulture, and floriculture, or exploration for,	450
and production of, crude oil and natural gas. This paragraph does	451
not exempt from "retail sale" or "sales at retail" the sale of	452
tangible personal property that is to be incorporated into a	453
structure or improvement to real property.	454

(b) To hold the thing transferred as security for the	455
performance of an obligation of the vendor;	456

(c) To resell, hold, use, or consume the thing transferred as	457
evidence of a contract of insurance;	458

(d) To use or consume the thing directly in commercial	459
fishing;	460

(e) To incorporate the thing transferred as a material or a	461
part into, or to use or consume the thing transferred directly in	462
the production of, magazines distributed as controlled circulation	463
publications;	464

(f) To use or consume the thing transferred in the production	465
and preparation in suitable condition for market and sale of	466
printed, imprinted, overprinted, lithographic, multilithic,	467
blueprinted, photostatic, or other productions or reproductions of	468
written or graphic matter;	469

(g) To use the thing transferred, as described in section	470
5739.011 of the Revised Code, primarily in a manufacturing	471
operation to produce tangible personal property for sale;	472

(h) To use the benefit of a warranty, maintenance or service	473
contract, or similar agreement, as described in division (B)(7) of	474
section 5739.01 of the Revised Code, to repair or maintain	475
tangible personal property, if all of the property that is the	476
subject of the warranty, contract, or agreement would not be	477
subject to the tax imposed by this section;	478

(i) To use the thing transferred as qualified research and	479
development equipment;	480

(j) To use or consume the thing transferred primarily in	481
storing, transporting, mailing, or otherwise handling purchased	482
sales inventory in a warehouse, distribution center, or similar	483
facility when the inventory is primarily distributed outside this	484
state to retail stores of the person who owns or controls the	485
warehouse, distribution center, or similar facility, to retail	486
stores of an affiliated group of which that person is a member, or	487
by means of direct marketing. This division does not apply to	488
motor vehicles registered for operation on the public highways. As	489
used in this division, "affiliated group" has the same meaning as	490
in division (B)(3)(e) of section 5739.01 of the Revised Code and	491
"direct marketing" has the same meaning as in division (B)(35) of	492
this section.	493

(k) To use or consume the thing transferred to fulfill a	494
contractual obligation incurred by a warrantor pursuant to a	495
warranty provided as a part of the price of the tangible personal	496
property sold or by a vendor of a warranty, maintenance or service	497
contract, or similar agreement the provision of which is defined	498
as a sale under division (B)(7) of section 5739.01 of the Revised	499
Code;	500

(l) To use or consume the thing transferred in the production	501
of a newspaper for distribution to the public;	502

(m) To use tangible personal property to perform a service	503
listed in division (B)(3) of section 5739.01 of the Revised Code,	504
if the property is or is to be permanently transferred to the	505
consumer of the service as an integral part of the performance of	506
the service.	507

As used in division (B)(42) of this section, "thing" includes	508
all transactions included in divisions (B)(3)(a), (b), and (e) of	509
section 5739.01 of the Revised Code.	510

(43) Sales conducted through a coin operated device that	511
activates vacuum equipment or equipment that dispenses water,	512
whether or not in combination with soap or other cleaning agents	513
or wax, to the consumer for the consumer's use on the premises in	514
washing, cleaning, or waxing a motor vehicle, provided no other	515
personal property or personal service is provided as part of the	516
transaction.	517

(44) Sales of replacement and modification parts for engines,	518
airframes, instruments, and interiors in, and paint for, aircraft	519
used primarily in a fractional aircraft ownership program, and	520
sales of services for the repair, modification, and maintenance of	521
such aircraft, and machinery, equipment, and supplies primarily	522
used to provide those services.	523

(45) Sales of telecommunications service that is used	524
directly and primarily to perform the functions of a call center.	525
As used in this division, "call center" means any physical	526
location where telephone calls are placed or received in high	527
volume for the purpose of making sales, marketing, customer	528
service, technical support, or other specialized business	529
activity, and that employs at least fifty individuals that engage	530
in call center activities on a full-time basis, or sufficient	531
individuals to fill fifty full-time equivalent positions.	532

(46) Sales by a telecommunications service vendor of 900	533
service to a subscriber. This division does not apply to	534
information services, as defined in division (FF) of section	535
5739.01 of the Revised Code.	536

(47) Sales of value-added non-voice data service. This	537
division does not apply to any similar service that is not	538
otherwise a telecommunications service.	539

(48)(a) Sales of the following occurring on the second	540
Saturday of August and the following Sunday of each year:	541

(i) An item of clothing, the price of which is less than one	542
hundred dollars;	543

(ii) An item of school supplies, the price of which is less	544
than one hundred dollars;	545

(iii) A computer, the price of which, less any manufacturer's	546
rebate, is less than seven hundred fifty dollars; and	547

(iv) A computer accessory, the price of which, less any	548
manufacturer's rebate, is less than one hundred dollars.	549

(b) For purposes of division (A)(48) of this section:

550

(i) "Clothing" does not include clothing or footwear that is	551
designed primarily for athletic activity or protective use and	552
that is not normally worn except when used for the athletic	553
activity or protective use for which it is designed; accessories,	554
including jewelry, handbags, luggage, umbrellas, wallets, watches,	555
and similar items carried on or about the human body, without	556
regard to whether the item is worn on the body in a manner	557
characteristic of clothing; or clothing that is rented, or that is	558
for use in a trade or business.	559

(ii) "School supplies" means pens, pencils, binders,	560
notebooks, reference books, book bags, lunch boxes, calculators,	561
and similar items. "School supplies" does not include furniture,	562
items that are rented, or tangible personal property for use in a	563
trade or business.	564

(C) For the purpose of the proper administration of this	565
chapter, and to prevent the evasion of the tax, it is presumed	566
that all sales made in this state are subject to the tax until the	567
contrary is established.	568

(D) The levy of this tax on retail sales of recreation and	569
sports club service shall not prevent a municipal corporation from	570
levying any tax on recreation and sports club dues or on any	571
income generated by recreation and sports club dues.	572

(E) The tax collected by the vendor from the consumer under	573
this chapter is not part of the price, but is a tax collection for	574
the benefit of the state, and of counties levying an additional	575
sales tax pursuant to section 5739.021 or 5739.026 of the Revised	576
Code and of transit authorities levying an additional sales tax	577
pursuant to section 5739.023 of the Revised Code. Except for the	578
discount authorized under section 5739.12 of the Revised Code and	579
the effects of any rounding pursuant to section 5703.055 of the	580
Revised Code, no person other than the state or such a county or	581
transit authority shall derive any benefit from the collection or	582
payment of the tax levied by this section or section 5739.021,	583
5739.023, or 5739.026 of the Revised Code.	584

Sec. 5739.05.  (A)(1) The tax commissioner shall enforce and	585
administer sections 5739.01 to 5739.31 of the Revised Code, which	586
are hereby declared to be sections which the commissioner is	587
required to administer within the meaning of sections 5703.17 to	588
5703.37, 5703.39, 5703.41, and 5703.45 of the Revised Code. The	589
commissioner may adopt and promulgate, in accordance with sections	590
119.01 to 119.13 of the Revised Code, such rules as the	591
commissioner deems necessary to administer sections 5739.01 to	592
5739.31 of the Revised Code.	593

(2) In accordance with section 5703.14 of the Revised Code,	594
the tax commissioner shall adopt rules that are necessary to	595
implement the tax exemption provided by division (B)(48) of	596
section 5739.02 of the Revised Code. Before each exemption period	597
required under that division, the commissioner shall make	598
available to vendors information bulletins explaining the	599
exemption.	600

(B) Upon application, the commissioner may authorize a vendor	601
to pay on a predetermined basis the tax levied by or pursuant to	602
section 5739.02, 5739.021, 5739.023, or 5739.026 of the Revised	603
Code upon sales of things produced or distributed or services	604
provided by such vendor, and the commissioner may waive the	605
collection of the tax from the consumer. The commissioner shall	606
not grant such authority unless the commissioner finds that the	607
granting of the authority would improve compliance and increase	608
the efficiency of the administration of the tax. The person to	609
whom such authority is granted shall post a notice, if required by	610
the commissioner, at the location where the product is offered for	611
sale that the tax is included in the selling price. The	612
comissionercommissioner may adopt rules to administer this	613
division.	614

(C) The commissioner may authorize a vendor to pay, on the	615
basis of a prearranged agreement under this division, the tax	616
levied by section 5739.02 or pursuant to section 5739.021,	617
5739.023, or 5739.026 of the Revised Code, and waive the	618
requirement that the vendor maintain the complete and accurate	619
record of individual taxable sales and tax collected thereon	620
required by section 5739.11 of the Revised Code, upon application	621
of the vendor, if the commissioner finds that the conditions of	622
the vendor-applicant's business are such that the maintenance of	623
such records of individual taxable sales and tax collected thereon	624
would impose an unreasonable burden upon the vendor. If the	625
commissioner determines that such unreasonable burden has been	626
imposed, the vendor and the commissioner shall agree to the terms	627
and conditions of a test check to be conducted. If the parties are	628
unable to agree to the terms and conditions of the test check, the	629
application shall be denied. The test check conducted shall	630
determine the proportion that taxable retail sales bear to all of	631
the vendor's retail sales and the ratio which the tax required to	632
be collected under sections 5739.02, 5739.021, and 5739.023 of the	633
Revised Code bears to the receipts from the vendor's taxable	634
retail sales.	635

The vendor shall collect the tax on the vendor's taxable	636
sales and the vendor's liability for collecting or remitting shall	637
be based upon the proportions and ratios established by the test	638
check, and not upon any other basis of determination, until such	639
time as a subsequent test check is made at the request of either	640
the vendor or the commissioner where either party believes that	641
the nature of the vendor's business has so changed as to make the	642
prior or existing test check no longer representative. The	643
commissioner may give notice to the vendor at any time that the	644
authorization is revoked or the vendor may notify the commissioner	645
that the vendor no longer elects to report under the	646
authorization. Such notice shall be delivered to the other party	647
personally or by registered mail. The revocation or cancellation	648
is not effective prior to the date of receipt of such notice.	649

Section 2. That existing sections 5739.02 and 5739.05 of the	650
Revised Code are hereby repealed.	651