As Introduced

127th General Assembly Regular Session 2007-2008

H. B. No. 370

Representative Bacon 

Cosponsors: Representatives Hughes, Wagoner, Peterson, Brown, Flowers, Williams, S., Fessler, Beatty, Zehringer, Oelslager, Boyd 

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A BILL

To amend sections 5739.02 and 5739.05 of the Revised

1

Code to provide a three-day period in August each

2

year during which sales of clothing, footwear,

3

school supplies, and personal computers are

4

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)(a) 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, except as otherwise provided	113
in division (B)(9)(b) of this section. If the number of days on	114
which such sales are made exceeds six in any calendar year, the	115
church or organization shall be considered to be engaged in	116
business and all subsequent sales by it shall be subject to the	117
tax. In counting the number of days, all sales by groups within a	118
church or within an organization shall be considered to be sales	119
of that church or organization.	120

(b) The limitation on the number of days on which tax-exempt	121
sales may be made by a church or organization under division	122
(B)(9)(a) of this section does not apply to sales made by student	123
clubs and other groups of students of a primary or secondary	124
school, or a parent-teacher association, booster group, or similar	125
organization that raises money to support or fund curricular or	126
extracurricular activities of a primary or secondary school.	127

(c) Divisions (B)(9)(a) and (b) of this section do not apply	128
to sales by a noncommercial educational radio or television	129
broadcasting station.	130

(10) Sales not within the taxing power of this state under	131
the Constitution of the United States;	132

(11) Except for transactions that are sales under division	133
(B)(3)(r) of section 5739.01 of the Revised Code, the	134
transportation of persons or property, unless the transportation	135
is by a private investigation and security service;	136

(12) Sales of tangible personal property or services to	137
churches, to organizations exempt from taxation under section	138
501(c)(3) of the Internal Revenue Code of 1986, and to any other	139
nonprofit organizations operated exclusively for charitable	140
purposes in this state, no part of the net income of which inures	141
to the benefit of any private shareholder or individual, and no	142
substantial part of the activities of which consists of carrying	143
on propaganda or otherwise attempting to influence legislation;	144
sales to offices administering one or more homes for the aged or	145
one or more hospital facilities exempt under section 140.08 of the	146
Revised Code; and sales to organizations described in division (D)	147
of section 5709.12 of the Revised Code.	148

"Charitable purposes" means the relief of poverty; the	149
improvement of health through the alleviation of illness, disease,	150
or injury; the operation of an organization exclusively for the	151
provision of professional, laundry, printing, and purchasing	152
services to hospitals or charitable institutions; the operation of	153
a home for the aged, as defined in section 5701.13 of the Revised	154
Code; the operation of a radio or television broadcasting station	155
that is licensed by the federal communications commission as a	156
noncommercial educational radio or television station; the	157
operation of a nonprofit animal adoption service or a county	158
humane society; the promotion of education by an institution of	159
learning that maintains a faculty of qualified instructors,	160
teaches regular continuous courses of study, and confers a	161
recognized diploma upon completion of a specific curriculum; the	162
operation of a parent-teacher association, booster group, or	163
similar organization primarily engaged in the promotion and	164
support of the curricular or extracurricular activities of a	165
primary or secondary school; the operation of a community or area	166
center in which presentations in music, dramatics, the arts, and	167
related fields are made in order to foster public interest and	168
education therein; the production of performances in music,	169
dramatics, and the arts; or the promotion of education by an	170
organization engaged in carrying on research in, or the	171
dissemination of, scientific and technological knowledge and	172
information primarily for the public.	173

Nothing in this division shall be deemed to exempt sales to	174
any organization for use in the operation or carrying on of a	175
trade or business, or sales to a home for the aged for use in the	176
operation of independent living facilities as defined in division	177
(A) of section 5709.12 of the Revised Code.	178

(13) Building and construction materials and services sold to	179
construction contractors for incorporation into a structure or	180
improvement to real property under a construction contract with	181
this state or a political subdivision of this state, or with the	182
United States government or any of its agencies; building and	183
construction materials and services sold to construction	184
contractors for incorporation into a structure or improvement to	185
real property that are accepted for ownership by this state or any	186
of its political subdivisions, or by the United States government	187
or any of its agencies at the time of completion of the structures	188
or improvements; building and construction materials sold to	189
construction contractors for incorporation into a horticulture	190
structure or livestock structure for a person engaged in the	191
business of horticulture or producing livestock; building	192
materials and services sold to a construction contractor for	193
incorporation into a house of public worship or religious	194
education, or a building used exclusively for charitable purposes	195
under a construction contract with an organization whose purpose	196
is as described in division (B)(12) of this section; building	197
materials and services sold to a construction contractor for	198
incorporation into a building under a construction contract with	199
an organization exempt from taxation under section 501(c)(3) of	200
the Internal Revenue Code of 1986 when the building is to be used	201
exclusively for the organization's exempt purposes; building and	202
construction materials sold for incorporation into the original	203
construction of a sports facility under section 307.696 of the	204
Revised Code; and building and construction materials and services	205
sold to a construction contractor for incorporation into real	206
property outside this state if such materials and services, when	207
sold to a construction contractor in the state in which the real	208
property is located for incorporation into real property in that	209
state, would be exempt from a tax on sales levied by that state;	210

(14) Sales of ships or vessels or rail rolling stock used or	211
to be used principally in interstate or foreign commerce, and	212
repairs, alterations, fuel, and lubricants for such ships or	213
vessels or rail rolling stock;	214

(15) Sales to persons primarily engaged in any of the	215
activities mentioned in division (B)(42)(a) or (g) of this	216
section, to persons engaged in making retail sales, or to persons	217
who purchase for sale from a manufacturer tangible personal	218
property that was produced by the manufacturer in accordance with	219
specific designs provided by the purchaser, of packages, including	220
material, labels, and parts for packages, and of machinery,	221
equipment, and material for use primarily in packaging tangible	222
personal property produced for sale, including any machinery,	223
equipment, and supplies used to make labels or packages, to	224
prepare packages or products for labeling, or to label packages or	225
products, by or on the order of the person doing the packaging, or	226
sold at retail. "Packages" includes bags, baskets, cartons,	227
crates, boxes, cans, bottles, bindings, wrappings, and other	228
similar devices and containers, but does not include motor	229
vehicles or bulk tanks, trailers, or similar devices attached to	230
motor vehicles. "Packaging" means placing in a package. Division	231
(B)(15) of this section does not apply to persons engaged in	232
highway transportation for hire.	233

(16) Sales of food to persons using food stamp benefits to	234
purchase the food. As used in this division, "food" has the same	235
meaning as in the "Food Stamp Act of 1977," 91 Stat. 958, 7 U.S.C.	236
2012, as amended, and federal regulations adopted pursuant to that	237
act.	238

(17) Sales to persons engaged in farming, agriculture,	239
horticulture, or floriculture, of tangible personal property for	240
use or consumption directly in the production by farming,	241
agriculture, horticulture, or floriculture of other tangible	242
personal property for use or consumption directly in the	243
production of tangible personal property for sale by farming,	244
agriculture, horticulture, or floriculture; or material and parts	245
for incorporation into any such tangible personal property for use	246
or consumption in production; and of tangible personal property	247
for such use or consumption in the conditioning or holding of	248
products produced by and for such use, consumption, or sale by	249
persons engaged in farming, agriculture, horticulture, or	250
floriculture, except where such property is incorporated into real	251
property;	252

(18) Sales of drugs for a human being that may be dispensed	253
only pursuant to a prescription; insulin as recognized in the	254
official United States pharmacopoeia; urine and blood testing	255
materials when used by diabetics or persons with hypoglycemia to	256
test for glucose or acetone; hypodermic syringes and needles when	257
used by diabetics for insulin injections; epoetin alfa when	258
purchased for use in the treatment of persons with medical	259
disease; hospital beds when purchased by hospitals, nursing homes,	260
or other medical facilities; and medical oxygen and medical	261
oxygen-dispensing equipment when purchased by hospitals, nursing	262
homes, or other medical facilities;	263

(19) Sales of prosthetic devices, durable medical equipment	264
for home use, or mobility enhancing equipment, when made pursuant	265
to a prescription and when such devices or equipment are for use	266
by a human being.	267

(20) Sales of emergency and fire protection vehicles and	268
equipment to nonprofit organizations for use solely in providing	269
fire protection and emergency services, including trauma care and	270
emergency medical services, for political subdivisions of the	271
state;	272

(21) Sales of tangible personal property manufactured in this	273
state, if sold by the manufacturer in this state to a retailer for	274
use in the retail business of the retailer outside of this state	275
and if possession is taken from the manufacturer by the purchaser	276
within this state for the sole purpose of immediately removing the	277
same from this state in a vehicle owned by the purchaser;	278

(22) Sales of services provided by the state or any of its	279
political subdivisions, agencies, instrumentalities, institutions,	280
or authorities, or by governmental entities of the state or any of	281
its political subdivisions, agencies, instrumentalities,	282
institutions, or authorities;	283

(23) Sales of motor vehicles to nonresidents of this state	284
under the circumstances described in division (B) of section	285
5739.029 of the Revised Code;	286

(24) Sales to persons engaged in the preparation of eggs for	287
sale of tangible personal property used or consumed directly in	288
such preparation, including such tangible personal property used	289
for cleaning, sanitizing, preserving, grading, sorting, and	290
classifying by size; packages, including material and parts for	291
packages, and machinery, equipment, and material for use in	292
packaging eggs for sale; and handling and transportation equipment	293
and parts therefor, except motor vehicles licensed to operate on	294
public highways, used in intraplant or interplant transfers or	295
shipment of eggs in the process of preparation for sale, when the	296
plant or plants within or between which such transfers or	297
shipments occur are operated by the same person. "Packages"	298
includes containers, cases, baskets, flats, fillers, filler flats,	299
cartons, closure materials, labels, and labeling materials, and	300
"packaging" means placing therein.	301

(25)(a) Sales of water to a consumer for residential use,	302
except the sale of bottled water, distilled water, mineral water,	303
carbonated water, or ice;	304

(b) Sales of water by a nonprofit corporation engaged	305
exclusively in the treatment, distribution, and sale of water to	306
consumers, if such water is delivered to consumers through pipes	307
or tubing.	308

(26) Fees charged for inspection or reinspection of motor	309
vehicles under section 3704.14 of the Revised Code;	310

(27) Sales to persons licensed to conduct a food service	311
operation pursuant to section 3717.43 of the Revised Code, of	312
tangible personal property primarily used directly for the	313
following:	314

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

315

(b) To preserve food that has been or will be prepared for	316
human consumption for sale by the food service operator, not	317
including tangible personal property used to display food for	318
selection by the consumer;	319

(c) To clean tangible personal property used to prepare or	320
serve food for human consumption for sale.	321

(28) Sales of animals by nonprofit animal adoption services	322
or county humane societies;	323

(29) Sales of services to a corporation described in division	324
(A) of section 5709.72 of the Revised Code, and sales of tangible	325
personal property that qualifies for exemption from taxation under	326
section 5709.72 of the Revised Code;	327

(30) Sales and installation of agricultural land tile, as	328
defined in division (B)(5)(a) of section 5739.01 of the Revised	329
Code;	330

(31) Sales and erection or installation of portable grain	331
bins, as defined in division (B)(5)(b) of section 5739.01 of the	332
Revised Code;	333

(32) The sale, lease, repair, and maintenance of, parts for,	334
or items attached to or incorporated in, motor vehicles that are	335
primarily used for transporting tangible personal property	336
belonging to others by a person engaged in highway transportation	337
for hire, except for packages and packaging used for the	338
transportation of tangible personal property;	339

(33) Sales to the state headquarters of any veterans'	340
organization in this state that is either incorporated and issued	341
a charter by the congress of the United States or is recognized by	342
the United States veterans administration, for use by the	343
headquarters;	344

(34) Sales to a telecommunications service vendor, mobile	345
telecommunications service vendor, or satellite broadcasting	346
service vendor of tangible personal property and services used	347
directly and primarily in transmitting, receiving, switching, or	348
recording any interactive, one- or two-way electromagnetic	349
communications, including voice, image, data, and information,	350
through the use of any medium, including, but not limited to,	351
poles, wires, cables, switching equipment, computers, and record	352
storage devices and media, and component parts for the tangible	353
personal property. The exemption provided in this division shall	354
be in lieu of all other exemptions under division (B)(42)(a) of	355
this section to which the vendor may otherwise be entitled, based	356
upon the use of the thing purchased in providing the	357
telecommunications, mobile telecommunications, or satellite	358
broadcasting service.	359

(35)(a) Sales where the purpose of the consumer is to use or	360
consume the things transferred in making retail sales and	361
consisting of newspaper inserts, catalogues, coupons, flyers, gift	362
certificates, or other advertising material that prices and	363
describes tangible personal property offered for retail sale.	364

(b) Sales to direct marketing vendors of preliminary	365
materials such as photographs, artwork, and typesetting that will	366
be used in printing advertising material; of printed matter that	367
offers free merchandise or chances to win sweepstake prizes and	368
that is mailed to potential customers with advertising material	369
described in division (B)(35)(a) of this section; and of equipment	370
such as telephones, computers, facsimile machines, and similar	371
tangible personal property primarily used to accept orders for	372
direct marketing retail sales.	373

(c) Sales of automatic food vending machines that preserve	374
food with a shelf life of forty-five days or less by refrigeration	375
and dispense it to the consumer.	376

For purposes of division (B)(35) of this section, "direct	377
marketing" means the method of selling where consumers order	378
tangible personal property by United States mail, delivery	379
service, or telecommunication and the vendor delivers or ships the	380
tangible personal property sold to the consumer from a warehouse,	381
catalogue distribution center, or similar fulfillment facility by	382
means of the United States mail, delivery service, or common	383
carrier.	384

(36) Sales to a person engaged in the business of	385
horticulture or producing livestock of materials to be	386
incorporated into a horticulture structure or livestock structure;	387

(37) Sales of personal computers, computer monitors, computer	388
keyboards, modems, and other peripheral computer equipment to an	389
individual who is licensed or certified to teach in an elementary	390
or a secondary school in this state for use by that individual in	391
preparation for teaching elementary or secondary school students;	392

(38) Sales to a professional racing team of any of the	393
following:	394

(a) Motor racing vehicles;

395

(b) Repair services for motor racing vehicles;

396

(c) Items of property that are attached to or incorporated in	397
motor racing vehicles, including engines, chassis, and all other	398
components of the vehicles, and all spare, replacement, and	399
rebuilt parts or components of the vehicles; except not including	400
tires, consumable fluids, paint, and accessories consisting of	401
instrumentation sensors and related items added to the vehicle to	402
collect and transmit data by means of telemetry and other forms of	403
communication.	404

(39) Sales of used manufactured homes and used mobile homes,	405
as defined in section 5739.0210 of the Revised Code, made on or	406
after January 1, 2000;	407

(40) Sales of tangible personal property and services to a	408
provider of electricity used or consumed directly and primarily in	409
generating, transmitting, or distributing electricity for use by	410
others, including property that is or is to be incorporated into	411
and will become a part of the consumer's production, transmission,	412
or distribution system and that retains its classification as	413
tangible personal property after incorporation; fuel or power used	414
in the production, transmission, or distribution of electricity;	415
and tangible personal property and services used in the repair and	416
maintenance of the production, transmission, or distribution	417
system, including only those motor vehicles as are specially	418
designed and equipped for such use. The exemption provided in this	419
division shall be in lieu of all other exemptions in division	420
(B)(42)(a) of this section to which a provider of electricity may	421
otherwise be entitled based on the use of the tangible personal	422
property or service purchased in generating, transmitting, or	423
distributing electricity.	424

(41) Sales to a person providing services under division	425
(B)(3)(r) of section 5739.01 of the Revised Code of tangible	426
personal property and services used directly and primarily in	427
providing taxable services under that section.	428

(42) Sales where the purpose of the purchaser is to do any of	429
the following:	430

(a) To incorporate the thing transferred as a material or a	431
part into tangible personal property to be produced for sale by	432
manufacturing, assembling, processing, or refining; or to use or	433
consume the thing transferred directly in producing tangible	434
personal property for sale by mining, including, without	435
limitation, the extraction from the earth of all substances that	436
are classed geologically as minerals, production of crude oil and	437
natural gas, farming, agriculture, horticulture, or floriculture,	438
or directly in the rendition of a public utility service, except	439
that the sales tax levied by this section shall be collected upon	440
all meals, drinks, and food for human consumption sold when	441
transporting persons. Persons engaged in rendering farming,	442
agricultural, horticultural, or floricultural services, and	443
services in the exploration for, and production of, crude oil and	444
natural gas, for others are deemed engaged directly in farming,	445
agriculture, horticulture, and floriculture, or exploration for,	446
and production of, crude oil and natural gas. This paragraph does	447
not exempt from "retail sale" or "sales at retail" the sale of	448
tangible personal property that is to be incorporated into a	449
structure or improvement to real property.	450

(b) To hold the thing transferred as security for the	451
performance of an obligation of the vendor;	452

(c) To resell, hold, use, or consume the thing transferred as	453
evidence of a contract of insurance;	454

(d) To use or consume the thing directly in commercial	455
fishing;	456

(e) To incorporate the thing transferred as a material or a	457
part into, or to use or consume the thing transferred directly in	458
the production of, magazines distributed as controlled circulation	459
publications;	460

(f) To use or consume the thing transferred in the production	461
and preparation in suitable condition for market and sale of	462
printed, imprinted, overprinted, lithographic, multilithic,	463
blueprinted, photostatic, or other productions or reproductions of	464
written or graphic matter;	465

(g) To use the thing transferred, as described in section	466
5739.011 of the Revised Code, primarily in a manufacturing	467
operation to produce tangible personal property for sale;	468

(h) To use the benefit of a warranty, maintenance or service	469
contract, or similar agreement, as described in division (B)(7) of	470
section 5739.01 of the Revised Code, to repair or maintain	471
tangible personal property, if all of the property that is the	472
subject of the warranty, contract, or agreement would not be	473
subject to the tax imposed by this section;	474

(i) To use the thing transferred as qualified research and	475
development equipment;	476

(j) To use or consume the thing transferred primarily in	477
storing, transporting, mailing, or otherwise handling purchased	478
sales inventory in a warehouse, distribution center, or similar	479
facility when the inventory is primarily distributed outside this	480
state to retail stores of the person who owns or controls the	481
warehouse, distribution center, or similar facility, to retail	482
stores of an affiliated group of which that person is a member, or	483
by means of direct marketing. This division does not apply to	484
motor vehicles registered for operation on the public highways. As	485
used in this division, "affiliated group" has the same meaning as	486
in division (B)(3)(e) of section 5739.01 of the Revised Code and	487
"direct marketing" has the same meaning as in division (B)(35) of	488
this section.	489

(k) To use or consume the thing transferred to fulfill a	490
contractual obligation incurred by a warrantor pursuant to a	491
warranty provided as a part of the price of the tangible personal	492
property sold or by a vendor of a warranty, maintenance or service	493
contract, or similar agreement the provision of which is defined	494
as a sale under division (B)(7) of section 5739.01 of the Revised	495
Code;	496

(l) To use or consume the thing transferred in the production	497
of a newspaper for distribution to the public;	498

(m) To use tangible personal property to perform a service	499
listed in division (B)(3) of section 5739.01 of the Revised Code,	500
if the property is or is to be permanently transferred to the	501
consumer of the service as an integral part of the performance of	502
the service.	503

As used in division (B)(42) of this section, "thing" includes	504
all transactions included in divisions (B)(3)(a), (b), and (e) of	505
section 5739.01 of the Revised Code.	506

(43) Sales conducted through a coin operated device that	507
activates vacuum equipment or equipment that dispenses water,	508
whether or not in combination with soap or other cleaning agents	509
or wax, to the consumer for the consumer's use on the premises in	510
washing, cleaning, or waxing a motor vehicle, provided no other	511
personal property or personal service is provided as part of the	512
transaction.	513

(44) Sales of replacement and modification parts for engines,	514
airframes, instruments, and interiors in, and paint for, aircraft	515
used primarily in a fractional aircraft ownership program, and	516
sales of services for the repair, modification, and maintenance of	517
such aircraft, and machinery, equipment, and supplies primarily	518
used to provide those services.	519

(45) Sales of telecommunications service that is used	520
directly and primarily to perform the functions of a call center.	521
As used in this division, "call center" means any physical	522
location where telephone calls are placed or received in high	523
volume for the purpose of making sales, marketing, customer	524
service, technical support, or other specialized business	525
activity, and that employs at least fifty individuals that engage	526
in call center activities on a full-time basis, or sufficient	527
individuals to fill fifty full-time equivalent positions.	528

(46) Sales by a telecommunications service vendor of 900	529
service to a subscriber. This division does not apply to	530
information services, as defined in division (FF) of section	531
5739.01 of the Revised Code.	532

(47) Sales of value-added non-voice data service. This	533
division does not apply to any similar service that is not	534
otherwise a telecommunications service.	535

(48)(a) Sales of the following occurring during the three-day	536
period each year that includes the first Friday, Saturday, and	537
Sunday in August:	538

(i) An article of clothing or footwear intended to be worn on	539
or about the human body, the price of which does not exceed one	540
hundred twenty-five dollars;	541

(ii) An item of school supplies, the price of which does not	542
exceed thirty dollars;	543

(iii) A personal computer system, the price of which does not	544
exceed two thousand five hundred dollars.	545

(b) The lease or rental of clothing, footwear, school	546
supplies, or a personal computer system, or the sale of clothing,	547
footwear, school supplies, or a personal computer system for use	548
in a trade or business, does not qualify for exemption under	549
division (B)(48) of this section.	550

(c) As used in division (B)(48) of this section:

551

(i) "Clothing or footwear" does not include jewelry, watches,	552
handbags, wallets, or umbrellas, or clothing or footwear that is	553
designed primarily for athletic activity or protective use and	554
that is not normally worn except when used for the athletic	555
activity or protective use for which it is designed.	556

(ii) "School supplies" means pens, pencils, binders,	557
notebooks, reference books, book bags, lunch boxes, calculators,	558
and similar items. "School supplies" does not include furniture or	559
school instructional material.	560

(iii) "Personal computer system" means all computer hardware	561
and software sold together in the same retail transaction,	562
including a central processing unit, storage drive, display	563
monitor, keyboard, and random access memory. "Personal computer	564
system" does not include minicomputers, mainframe computers,	565
network servers, local area network hubs, routers and cabling,	566
hardware word processors, personal digital assistants, graphical	567
calculators, hand-held computers, game consoles, internet	568
television devices, network operating systems, multiple-user	569
licensed software and hardware, separate sales or use of internal	570
or external components, or separate sales of add-on components.	571

(C) For the purpose of the proper administration of this	572
chapter, and to prevent the evasion of the tax, it is presumed	573
that all sales made in this state are subject to the tax until the	574
contrary is established.	575

(D) The levy of this tax on retail sales of recreation and	576
sports club service shall not prevent a municipal corporation from	577
levying any tax on recreation and sports club dues or on any	578
income generated by recreation and sports club dues.	579

(E) The tax collected by the vendor from the consumer under	580
this chapter is not part of the price, but is a tax collection for	581
the benefit of the state, and of counties levying an additional	582
sales tax pursuant to section 5739.021 or 5739.026 of the Revised	583
Code and of transit authorities levying an additional sales tax	584
pursuant to section 5739.023 of the Revised Code. Except for the	585
discount authorized under section 5739.12 of the Revised Code and	586
the effects of any rounding pursuant to section 5703.055 of the	587
Revised Code, no person other than the state or such a county or	588
transit authority shall derive any benefit from the collection or	589
payment of the tax levied by this section or section 5739.021,	590
5739.023, or 5739.026 of the Revised Code.	591

Sec. 5739.05.  (A)(1) The tax commissioner shall enforce and	592
administer sections 5739.01 to 5739.31 of the Revised Code, which	593
are hereby declared to be sections whichthat the commissioner is	594
required to administer within the meaning of sections 5703.17 to	595
5703.37, 5703.39, 5703.41, and 5703.45 of the Revised Code. The	596
commissioner may adopt and promulgate, in accordance with sections	597
119.01 to 119.13 of the Revised Code, such rules as the	598
commissioner deems necessary to administer sections 5739.01 to	599
5739.31 of the Revised Code.	600

(2) The commissioner, in accordance with section 5703.14 of	601
the Revised Code, shall adopt rules necessary to implement the	602
three-day tax exemption provided by division (B)(48) of section	603
5739.02 of the Revised Code. Before each exemption period required	604
under that section, the commissioner shall make available to	605
vendors informational bulletins explaining the exemption.	606

(B) Upon application, the commissioner may authorize a vendor	607
to pay on a predetermined basis the tax levied by or pursuant to	608
section 5739.02, 5739.021, 5739.023, or 5739.026 of the Revised	609
Code upon sales of things produced or distributed or services	610
provided by such vendor, and the commissioner may waive the	611
collection of the tax from the consumer. The commissioner shall	612
not grant such authority unless the commissioner finds that the	613
granting of the authority would improve compliance and increase	614
the efficiency of the administration of the tax. The person to	615
whom such authority is granted shall post a notice, if required by	616
the commissioner, at the location where the product is offered for	617
sale, that the tax is included in the selling price. The	618
comissionercommissioner may adopt rules to administer this	619
division.	620

(C) The commissioner may authorize a vendor to pay, on the	621
basis of a prearranged agreement under this division, the tax	622
levied by section 5739.02 or pursuant to section 5739.021,	623
5739.023, or 5739.026 of the Revised Code, and waive the	624
requirement that the vendor maintain the complete and accurate	625
record of individual taxable sales and tax collected thereon	626
required by section 5739.11 of the Revised Code, upon application	627
of the vendor, if the commissioner finds that the conditions of	628
the vendor-applicant's business are such that the maintenance of	629
such records of individual taxable sales and tax collected thereon	630
would impose an unreasonable burden upon the vendor. If the	631
commissioner determines that such unreasonable burden has been	632
imposed, the vendor and the commissioner shall agree to the terms	633
and conditions of a test check to be conducted. If the parties are	634
unable to agree to the terms and conditions of the test check, the	635
application shall be denied. The test check conducted shall	636
determine the proportion that taxable retail sales bear to all of	637
the vendor's retail sales and the ratio which the tax required to	638
be collected under sections 5739.02, 5739.021, and 5739.023 of the	639
Revised Code bears to the receipts from the vendor's taxable	640
retail sales.	641

The vendor shall collect the tax on the vendor's taxable	642
sales and the vendor's liability for collecting or remitting shall	643
be based upon the proportions and ratios established by the test	644
check, and not upon any other basis of determination, until such	645
time as a subsequent test check is made at the request of either	646
the vendor or the commissioner where either party believes that	647
the nature of the vendor's business has so changed as to make the	648
prior or existing test check no longer representative. The	649
commissioner may give notice to the vendor at any time that the	650
authorization is revoked or the vendor may notify the commissioner	651
that the vendor no longer elects to report under the	652
authorization. Such notice shall be delivered to the other party	653
personally or by registered mail. The revocation or cancellation	654
is not effective prior to the date of receipt of such notice.	655

Section 2. That existing sections 5739.02 and 5739.05 of the	656
Revised Code are hereby repealed.	657

Section 3. The first three-day sales and use tax exemption	658
period under division (B)(48) of section 5739.02 of the Revised	659
Code, as amended by this act, shall begin August 1, 2008.	660