As Introduced

127th General Assembly Regular Session 2007-2008

H. B. No. 575

Representative Schindel 

Cosponsors: Representatives Setzer, Fessler, Evans, Gibbs, Batchelder, Flowers, McGregor, J. 

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A BILL

To amend section 5739.01 of the Revised Code to

1

exempt from the sales tax massage therapy that is

2

provided by an individual who holds a certificate

3

to practice massage therapy.

4

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

Section 1. That section 5739.01 of the Revised Code be	5
amended to read as follows:	6

Sec. 5739.01.  As used in this chapter:

7

(A) "Person" includes individuals, receivers, assignees,	8
trustees in bankruptcy, estates, firms, partnerships,	9
associations, joint-stock companies, joint ventures, clubs,	10
societies, corporations, the state and its political subdivisions,	11
and combinations of individuals of any form.	12

(B) "Sale" and "selling" include all of the following	13
transactions for a consideration in any manner, whether absolutely	14
or conditionally, whether for a price or rental, in money or by	15
exchange, and by any means whatsoever:	16

(1) All transactions by which title or possession, or both,	17
of tangible personal property, is or is to be transferred, or a	18
license to use or consume tangible personal property is or is to	19
be granted;	20

(2) All transactions by which lodging by a hotel is or is to	21
be furnished to transient guests;	22

(3) All transactions by which:

23

(a) An item of tangible personal property is or is to be	24
repaired, except property, the purchase of which would not be	25
subject to the tax imposed by section 5739.02 of the Revised Code;	26

(b) An item of tangible personal property is or is to be	27
installed, except property, the purchase of which would not be	28
subject to the tax imposed by section 5739.02 of the Revised Code	29
or property that is or is to be incorporated into and will become	30
a part of a production, transmission, transportation, or	31
distribution system for the delivery of a public utility service;	32

(c) The service of washing, cleaning, waxing, polishing, or	33
painting a motor vehicle is or is to be furnished;	34

(d) Until August 1, 2003, industrial laundry cleaning	35
services are or are to be provided and, on and after August 1,	36
2003, laundry and dry cleaning services are or are to be provided;	37

(e) Automatic data processing, computer services, or	38
electronic information services are or are to be provided for use	39
in business when the true object of the transaction is the receipt	40
by the consumer of automatic data processing, computer services,	41
or electronic information services rather than the receipt of	42
personal or professional services to which automatic data	43
processing, computer services, or electronic information services	44
are incidental or supplemental. Notwithstanding any other	45
provision of this chapter, such transactions that occur between	46
members of an affiliated group are not sales. An "affiliated	47
group" means two or more persons related in such a way that one	48
person owns or controls the business operation of another member	49
of the group. In the case of corporations with stock, one	50
corporation owns or controls another if it owns more than fifty	51
per cent of the other corporation's common stock with voting	52
rights.	53

(f) Telecommunications service, including prepaid calling	54
service, prepaid wireless calling service, or ancillary service,	55
is or is to be provided, but not including coin-operated telephone	56
service;	57

(g) Landscaping and lawn care service is or is to be	58
provided;	59

(h) Private investigation and security service is or is to be	60
provided;	61

(i) Information services or tangible personal property is	62
provided or ordered by means of a nine hundred telephone call;	63

(j) Building maintenance and janitorial service is or is to	64
be provided;	65

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

66

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

67

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

68

(n) Physical fitness facility service is or is to be	69
provided;	70

(o) Recreation and sports club service is or is to be	71
provided;	72

(p) On and after August 1, 2003, satellite broadcasting	73
service is or is to be provided;	74

(q) On and after August 1, 2003, personal care service is or	75
is to be provided to an individual. As used in this division,	76
"personal care service" includes skin care, the application of	77
cosmetics, manicuring, pedicuring, hair removal, tattooing, body	78
piercing, tanning, massage, and other similar services. "Personal	79
care service" does not include a service provided by or on the	80
order of a licensed physician or licensed chiropractor, massage	81
therapy provided by an individual who holds a valid certificate to	82
practice massage therapy issued under section 4731.15 of the	83
Revised Code, or the cutting, coloring, or styling of an	84
individual's hair.	85

(r) On and after August 1, 2003, the transportation of	86
persons by motor vehicle or aircraft is or is to be provided, when	87
the transportation is entirely within this state, except for	88
transportation provided by an ambulance service, by a transit bus,	89
as defined in section 5735.01 of the Revised Code, and	90
transportation provided by a citizen of the United States holding	91
a certificate of public convenience and necessity issued under 49	92
U.S.C. 41102;	93

(s) On and after August 1, 2003, motor vehicle towing service	94
is or is to be provided. As used in this division, "motor vehicle	95
towing service" means the towing or conveyance of a wrecked,	96
disabled, or illegally parked motor vehicle.	97

(t) On and after August 1, 2003, snow removal service is or	98
is to be provided. As used in this division, "snow removal	99
service" means the removal of snow by any mechanized means, but	100
does not include the providing of such service by a person that	101
has less than five thousand dollars in sales of such service	102
during the calendar year.	103

(u) Electronic publishing service is or is to be provided to	104
a consumer for use in business, except that such transactions	105
occurring between members of an affiliated group, as defined in	106
division (B)(3)(e) of this section, are not sales.	107

(4) All transactions by which printed, imprinted,	108
overprinted, lithographic, multilithic, blueprinted, photostatic,	109
or other productions or reproductions of written or graphic matter	110
are or are to be furnished or transferred;	111

(5) The production or fabrication of tangible personal	112
property for a consideration for consumers who furnish either	113
directly or indirectly the materials used in the production of	114
fabrication work; and include the furnishing, preparing, or	115
serving for a consideration of any tangible personal property	116
consumed on the premises of the person furnishing, preparing, or	117
serving such tangible personal property. Except as provided in	118
section 5739.03 of the Revised Code, a construction contract	119
pursuant to which tangible personal property is or is to be	120
incorporated into a structure or improvement on and becoming a	121
part of real property is not a sale of such tangible personal	122
property. The construction contractor is the consumer of such	123
tangible personal property, provided that the sale and	124
installation of carpeting, the sale and installation of	125
agricultural land tile, the sale and erection or installation of	126
portable grain bins, or the provision of landscaping and lawn care	127
service and the transfer of property as part of such service is	128
never a construction contract.	129

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

130

(a) "Agricultural land tile" means fired clay or concrete	131
tile, or flexible or rigid perforated plastic pipe or tubing,	132
incorporated or to be incorporated into a subsurface drainage	133
system appurtenant to land used or to be used directly in	134
production by farming, agriculture, horticulture, or floriculture.	135
The term does not include such materials when they are or are to	136
be incorporated into a drainage system appurtenant to a building	137
or structure even if the building or structure is used or to be	138
used in such production.	139

(b) "Portable grain bin" means a structure that is used or to	140
be used by a person engaged in farming or agriculture to shelter	141
the person's grain and that is designed to be disassembled without	142
significant damage to its component parts.	143

(6) All transactions in which all of the shares of stock of a	144
closely held corporation are transferred, if the corporation is	145
not engaging in business and its entire assets consist of boats,	146
planes, motor vehicles, or other tangible personal property	147
operated primarily for the use and enjoyment of the shareholders;	148

(7) All transactions in which a warranty, maintenance or	149
service contract, or similar agreement by which the vendor of the	150
warranty, contract, or agreement agrees to repair or maintain the	151
tangible personal property of the consumer is or is to be	152
provided;	153

(8) The transfer of copyrighted motion picture films used	154
solely for advertising purposes, except that the transfer of such	155
films for exhibition purposes is not a sale.	156

(9) On and after August 1, 2003, all transactions by which	157
tangible personal property is or is to be stored, except such	158
property that the consumer of the storage holds for sale in the	159
regular course of business.	160

Except as provided in this section, "sale" and "selling" do	161
not include transfers of interest in leased property where the	162
original lessee and the terms of the original lease agreement	163
remain unchanged, or professional, insurance, or personal service	164
transactions that involve the transfer of tangible personal	165
property as an inconsequential element, for which no separate	166
charges are made.	167

(C) "Vendor" means the person providing the service or by	168
whom the transfer effected or license given by a sale is or is to	169
be made or given and, for sales described in division (B)(3)(i) of	170
this section, the telecommunications service vendor that provides	171
the nine hundred telephone service; if two or more persons are	172
engaged in business at the same place of business under a single	173
trade name in which all collections on account of sales by each	174
are made, such persons shall constitute a single vendor.	175

Physicians, dentists, hospitals, and veterinarians who are	176
engaged in selling tangible personal property as received from	177
others, such as eyeglasses, mouthwashes, dentifrices, or similar	178
articles, are vendors. Veterinarians who are engaged in	179
transferring to others for a consideration drugs, the dispensing	180
of which does not require an order of a licensed veterinarian or	181
physician under federal law, are vendors.	182

(D)(1) "Consumer" means the person for whom the service is	183
provided, to whom the transfer effected or license given by a sale	184
is or is to be made or given, to whom the service described in	185
division (B)(3)(f) or (i) of this section is charged, or to whom	186
the admission is granted.	187

(2) Physicians, dentists, hospitals, and blood banks operated	188
by nonprofit institutions and persons licensed to practice	189
veterinary medicine, surgery, and dentistry are consumers of all	190
tangible personal property and services purchased by them in	191
connection with the practice of medicine, dentistry, the rendition	192
of hospital or blood bank service, or the practice of veterinary	193
medicine, surgery, and dentistry. In addition to being consumers	194
of drugs administered by them or by their assistants according to	195
their direction, veterinarians also are consumers of drugs that	196
under federal law may be dispensed only by or upon the order of a	197
licensed veterinarian or physician, when transferred by them to	198
others for a consideration to provide treatment to animals as	199
directed by the veterinarian.	200

(3) A person who performs a facility management, or similar	201
service contract for a contractee is a consumer of all tangible	202
personal property and services purchased for use in connection	203
with the performance of such contract, regardless of whether title	204
to any such property vests in the contractee. The purchase of such	205
property and services is not subject to the exception for resale	206
under division (E)(1) of this section.	207

(4)(a) In the case of a person who purchases printed matter	208
for the purpose of distributing it or having it distributed to the	209
public or to a designated segment of the public, free of charge,	210
that person is the consumer of that printed matter, and the	211
purchase of that printed matter for that purpose is a sale.	212

(b) In the case of a person who produces, rather than	213
purchases, printed matter for the purpose of distributing it or	214
having it distributed to the public or to a designated segment of	215
the public, free of charge, that person is the consumer of all	216
tangiletangible personal property and services purchased for use	217
or consumption in the production of that printed matter. That	218
person is not entitled to claim exemption under division	219
(B)(42)(f) of section 5739.02 of the Revised Code for any	220
material incorporated into the printed matter or any equipment,	221
supplies, or services primarily used to produce the printed	222
matter.	223

(c) The distribution of printed matter to the public or to a	224
designated segment of the public, free of charge, is not a sale to	225
the members of the public to whom the printed matter is	226
distributed or to any persons who purchase space in the printed	227
matter for advertising or other purposes.	228

(5) A person who makes sales of any of the services listed in	229
division (B)(3) of this section is the consumer of any tangible	230
personal property used in performing the service. The purchase of	231
that property is not subject to the resale exception under	232
division (E)(1) of this section.	233

(6) A person who engages in highway transportation for hire	234
is the consumer of all packaging materials purchased by that	235
person and used in performing the service, except for packaging	236
materials sold by such person in a transaction separate from the	237
service.	238

(E) "Retail sale" and "sales at retail" include all sales,	239
except those in which the purpose of the consumer is to resell the	240
thing transferred or benefit of the service provided, by a person	241
engaging in business, in the form in which the same is, or is to	242
be, received by the person.	243

(F) "Business" includes any activity engaged in by any person	244
with the object of gain, benefit, or advantage, either direct or	245
indirect. "Business" does not include the activity of a person in	246
managing and investing the person's own funds.	247

(G) "Engaging in business" means commencing, conducting, or	248
continuing in business, and liquidating a business when the	249
liquidator thereof holds itself out to the public as conducting	250
such business. Making a casual sale is not engaging in business.	251

(H)(1)(a) "Price," except as provided in divisions (H)(2) and	252
(3) of this section, means the total amount of consideration,	253
including cash, credit, property, and services, for which tangible	254
personal property or services are sold, leased, or rented, valued	255
in money, whether received in money or otherwise, without any	256
deduction for any of the following:	257

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

258

(ii) The cost of materials used, labor or service costs,	259
interest, losses, all costs of transportation to the vendor, all	260
taxes imposed on the vendor, including the tax imposed under	261
Chapter 5751. of the Revised Code, and any other expense of the	262
vendor;	263

(iii) Charges by the vendor for any services necessary to	264
complete the sale;	265

(iv) On and after August 1, 2003, delivery charges. As used	266
in this division, "delivery charges" means charges by the vendor	267
for preparation and delivery to a location designated by the	268
consumer of tangible personal property or a service, including	269
transportation, shipping, postage, handling, crating, and packing.	270

(v) Installation charges;

271

(vi) Credit for any trade-in.

272

(b) "Price" includes consideration received by the vendor	273
from a third party, if the vendor actually receives the	274
consideration from a party other than the consumer, and the	275
consideration is directly related to a price reduction or discount	276
on the sale; the vendor has an obligation to pass the price	277
reduction or discount through to the consumer; the amount of the	278
consideration attributable to the sale is fixed and determinable	279
by the vendor at the time of the sale of the item to the consumer;	280
and one of the following criteria is met:	281

(i) The consumer presents a coupon, certificate, or other	282
document to the vendor to claim a price reduction or discount	283
where the coupon, certificate, or document is authorized,	284
distributed, or granted by a third party with the understanding	285
that the third party will reimburse any vendor to whom the coupon,	286
certificate, or document is presented;	287

(ii) The consumer identifies the consumer's self to the	288
seller as a member of a group or organization entitled to a price	289
reduction or discount. A preferred customer card that is available	290
to any patron does not constitute membership in such a group or	291
organization.	292

(iii) The price reduction or discount is identified as a	293
third party price reduction or discount on the invoice received by	294
the consumer, or on a coupon, certificate, or other document	295
presented by the consumer.	296

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

297

(i) Discounts, including cash, term, or coupons that are not	298
reimbursed by a third party that are allowed by a vendor and taken	299
by a consumer on a sale;	300

(ii) Interest, financing, and carrying charges from credit	301
extended on the sale of tangible personal property or services, if	302
the amount is separately stated on the invoice, bill of sale, or	303
similar document given to the purchaser;	304

(iii) Any taxes legally imposed directly on the consumer that	305
are separately stated on the invoice, bill of sale, or similar	306
document given to the consumer. For the purpose of this division,	307
the tax imposed under Chapter 5751. of the Revised Code is not a	308
tax directly on the consumer, even if the tax or a portion thereof	309
is separately stated.	310

(iv) Notwithstanding divisions (H)(1)(b)(i) to (iii) of this	311
section, any discount allowed by an automobile manufacturer to its	312
employee, or to the employee of a supplier, on the purchase of a	313
new motor vehicle from a new motor vehicle dealer in this state.	314

(2) In the case of a sale of any new motor vehicle by a new	315
motor vehicle dealer, as defined in section 4517.01 of the Revised	316
Code, in which another motor vehicle is accepted by the dealer as	317
part of the consideration received, "price" has the same meaning	318
as in division (H)(1) of this section, reduced by the credit	319
afforded the consumer by the dealer for the motor vehicle received	320
in trade.	321

(3) In the case of a sale of any watercraft or outboard motor	322
by a watercraft dealer licensed in accordance with section	323
1547.543 of the Revised Code, in which another watercraft,	324
watercraft and trailer, or outboard motor is accepted by the	325
dealer as part of the consideration received, "price" has the same	326
meaning as in division (H)(1) of this section, reduced by the	327
credit afforded the consumer by the dealer for the watercraft,	328
watercraft and trailer, or outboard motor received in trade. As	329
used in this division, "watercraft" includes an outdrive unit	330
attached to the watercraft.	331

(I) "Receipts" means the total amount of the prices of the	332
sales of vendors, provided that cash discounts allowed and taken	333
on sales at the time they are consummated are not included, minus	334
any amount deducted as a bad debt pursuant to section 5739.121 of	335
the Revised Code. "Receipts" does not include the sale price of	336
property returned or services rejected by consumers when the full	337
sale price and tax are refunded either in cash or by credit.	338

(J) "Place of business" means any location at which a person	339
engages in business.	340

(K) "Premises" includes any real property or portion thereof	341
upon which any person engages in selling tangible personal	342
property at retail or making retail sales and also includes any	343
real property or portion thereof designated for, or devoted to,	344
use in conjunction with the business engaged in by such person.	345

(L) "Casual sale" means a sale of an item of tangible	346
personal property that was obtained by the person making the sale,	347
through purchase or otherwise, for the person's own use and was	348
previously subject to any state's taxing jurisdiction on its sale	349
or use, and includes such items acquired for the seller's use that	350
are sold by an auctioneer employed directly by the person for such	351
purpose, provided the location of such sales is not the	352
auctioneer's permanent place of business. As used in this	353
division, "permanent place of business" includes any location	354
where such auctioneer has conducted more than two auctions during	355
the year.	356

(M) "Hotel" means every establishment kept, used, maintained,	357
advertised, or held out to the public to be a place where sleeping	358
accommodations are offered to guests, in which five or more rooms	359
are used for the accommodation of such guests, whether the rooms	360
are in one or several structures.	361

(N) "Transient guests" means persons occupying a room or	362
rooms for sleeping accommodations for less than thirty consecutive	363
days.	364

(O) "Making retail sales" means the effecting of transactions	365
wherein one party is obligated to pay the price and the other	366
party is obligated to provide a service or to transfer title to or	367
possession of the item sold. "Making retail sales" does not	368
include the preliminary acts of promoting or soliciting the retail	369
sales, other than the distribution of printed matter which	370
displays or describes and prices the item offered for sale, nor	371
does it include delivery of a predetermined quantity of tangible	372
personal property or transportation of property or personnel to or	373
from a place where a service is performed, regardless of whether	374
the vendor is a delivery vendor.	375

(P) "Used directly in the rendition of a public utility	376
service" means that property that is to be incorporated into and	377
will become a part of the consumer's production, transmission,	378
transportation, or distribution system and that retains its	379
classification as tangible personal property after such	380
incorporation; fuel or power used in the production, transmission,	381
transportation, or distribution system; and tangible personal	382
property used in the repair and maintenance of the production,	383
transmission, transportation, or distribution system, including	384
only such motor vehicles as are specially designed and equipped	385
for such use. Tangible personal property and services used	386
primarily in providing highway transportation for hire are not	387
used directly in the rendition of a public utility service. In	388
this definition, "public utility" includes a citizen of the United	389
States holding, and required to hold, a certificate of public	390
convenience and necessity issued under 49 U.S.C. 41102.	391

(Q) "Refining" means removing or separating a desirable	392
product from raw or contaminated materials by distillation or	393
physical, mechanical, or chemical processes.	394

(R) "Assembly" and "assembling" mean attaching or fitting	395
together parts to form a product, but do not include packaging a	396
product.	397

(S) "Manufacturing operation" means a process in which	398
materials are changed, converted, or transformed into a different	399
state or form from which they previously existed and includes	400
refining materials, assembling parts, and preparing raw materials	401
and parts by mixing, measuring, blending, or otherwise committing	402
such materials or parts to the manufacturing process.	403
"Manufacturing operation" does not include packaging.	404

(T) "Fiscal officer" means, with respect to a regional	405
transit authority, the secretary-treasurer thereof, and with	406
respect to a county that is a transit authority, the fiscal	407
officer of the county transit board if one is appointed pursuant	408
to section 306.03 of the Revised Code or the county auditor if the	409
board of county commissioners operates the county transit system.	410

(U) "Transit authority" means a regional transit authority	411
created pursuant to section 306.31 of the Revised Code or a county	412
in which a county transit system is created pursuant to section	413
306.01 of the Revised Code. For the purposes of this chapter, a	414
transit authority must extend to at least the entire area of a	415
single county. A transit authority that includes territory in more	416
than one county must include all the area of the most populous	417
county that is a part of such transit authority. County population	418
shall be measured by the most recent census taken by the United	419
States census bureau.	420

(V) "Legislative authority" means, with respect to a regional	421
transit authority, the board of trustees thereof, and with respect	422
to a county that is a transit authority, the board of county	423
commissioners.	424

(W) "Territory of the transit authority" means all of the	425
area included within the territorial boundaries of a transit	426
authority as they from time to time exist. Such territorial	427
boundaries must at all times include all the area of a single	428
county or all the area of the most populous county that is a part	429
of such transit authority. County population shall be measured by	430
the most recent census taken by the United States census bureau.	431

(X) "Providing a service" means providing or furnishing	432
anything described in division (B)(3) of this section for	433
consideration.	434

(Y)(1)(a) "Automatic data processing" means processing of	435
others' data, including keypunching or similar data entry services	436
together with verification thereof, or providing access to	437
computer equipment for the purpose of processing data.	438

(b) "Computer services" means providing services consisting	439
of specifying computer hardware configurations and evaluating	440
technical processing characteristics, computer programming, and	441
training of computer programmers and operators, provided in	442
conjunction with and to support the sale, lease, or operation of	443
taxable computer equipment or systems.	444

(c) "Electronic information services" means providing access	445
to computer equipment by means of telecommunications equipment for	446
the purpose of either of the following:	447

(i) Examining or acquiring data stored in or accessible to	448
the computer equipment;	449

(ii) Placing data into the computer equipment to be retrieved	450
by designated recipients with access to the computer equipment.	451

For transactions occurring on or after the effective date of	452
the amendment of this section by H.B. 157 of the 127th general	453
assembly, December 21, 2007, "electronic information services"	454
does not include electronic publishing as defined in division	455
(LLL) of this section.	456

(d) "Automatic data processing, computer services, or	457
electronic information services" shall not include personal or	458
professional services.	459

(2) As used in divisions (B)(3)(e) and (Y)(1) of this	460
section, "personal and professional services" means all services	461
other than automatic data processing, computer services, or	462
electronic information services, including but not limited to:	463

(a) Accounting and legal services such as advice on tax	464
matters, asset management, budgetary matters, quality control,	465
information security, and auditing and any other situation where	466
the service provider receives data or information and studies,	467
alters, analyzes, interprets, or adjusts such material;	468

(b) Analyzing business policies and procedures;

469

(c) Identifying management information needs;

470

(d) Feasibility studies, including economic and technical	471
analysis of existing or potential computer hardware or software	472
needs and alternatives;	473

(e) Designing policies, procedures, and custom software for	474
collecting business information, and determining how data should	475
be summarized, sequenced, formatted, processed, controlled, and	476
reported so that it will be meaningful to management;	477

(f) Developing policies and procedures that document how	478
business events and transactions are to be authorized, executed,	479
and controlled;	480

(g) Testing of business procedures;

481

(h) Training personnel in business procedure applications;

482

(i) Providing credit information to users of such information	483
by a consumer reporting agency, as defined in the "Fair Credit	484
Reporting Act," 84 Stat. 1114, 1129 (1970), 15 U.S.C. 1681a(f), or	485
as hereafter amended, including but not limited to gathering,	486
organizing, analyzing, recording, and furnishing such information	487
by any oral, written, graphic, or electronic medium;	488

(j) Providing debt collection services by any oral, written,	489
graphic, or electronic means.	490

The services listed in divisions (Y)(2)(a) to (j) of this	491
section are not automatic data processing or computer services.	492

(Z) "Highway transportation for hire" means the	493
transportation of personal property belonging to others for	494
consideration by any of the following:	495

(1) The holder of a permit or certificate issued by this	496
state or the United States authorizing the holder to engage in	497
transportation of personal property belonging to others for	498
consideration over or on highways, roadways, streets, or any	499
similar public thoroughfare;	500

(2) A person who engages in the transportation of personal	501
property belonging to others for consideration over or on	502
highways, roadways, streets, or any similar public thoroughfare	503
but who could not have engaged in such transportation on December	504
11, 1985, unless the person was the holder of a permit or	505
certificate of the types described in division (Z)(1) of this	506
section;	507

(3) A person who leases a motor vehicle to and operates it	508
for a person described by division (Z)(1) or (2) of this section.	509

(AA)(1) "Telecommunications service" means the electronic	510
transmission, conveyance, or routing of voice, data, audio, video,	511
or any other information or signals to a point, or between or	512
among points. "Telecommunications service" includes such	513
transmission, conveyance, or routing in which computer processing	514
applications are used to act on the form, code, or protocol of the	515
content for purposes of transmission, conveyance, or routing	516
without regard to whether the service is referred to as voice-over	517
internet protocol service or is classified by the federal	518
communications commission as enhanced or value-added.	519
"Telecommunications service" does not include any of the	520
following:	521

(a) Data processing and information services that allow data	522
to be generated, acquired, stored, processed, or retrieved and	523
delivered by an electronic transmission to a consumer where the	524
consumer's primary purpose for the underlying transaction is the	525
processed data or information;	526

(b) Installation or maintenance of wiring or equipment on a	527
customer's premises;	528

(c) Tangible personal property;

529

(d) Advertising, including directory advertising;

530

(e) Billing and collection services provided to third	531
parties;	532

(f) Internet access service;

533

(g) Radio and television audio and video programming	534
services, regardless of the medium, including the furnishing of	535
transmission, conveyance, and routing of such services by the	536
programming service provider. Radio and television audio and video	537
programming services include, but are not limited to, cable	538
service, as defined in 47 U.S.C. 522(6), and audio and video	539
programming services delivered by commercial mobile radio service	540
providers, as defined in 47 C.F.R. 20.3;	541

(h) Ancillary service;

542

(i) Digital products delivered electronically, including	543
software, music, video, reading materials, or ring tones.	544

(2) "Ancillary service" means a service that is associated	545
with or incidental to the provision of telecommunications service,	546
including conference bridging service, detailed telecommunications	547
billing service, directory assistance, vertical service, and voice	548
mail service. As used in this division:	549

(a) "Conference bridging service" means an ancillary service	550
that links two or more participants of an audio or video	551
conference call, including providing a telephone number.	552
"Conference bridging service" does not include telecommunications	553
services used to reach the conference bridge.	554

(b) "Detailed telecommunications billing service" means an	555
ancillary service of separately stating information pertaining to	556
individual calls on a customer's billing statement.	557

(c) "Directory assistance" means an ancillary service of	558
providing telephone number or address information.	559

(d) "Vertical service" means an ancillary service that is	560
offered in connection with one or more telecommunications	561
services, which offers advanced calling features that allow	562
customers to identify callers and manage multiple calls and call	563
connections, including conference bridging service.	564

(e) "Voice mail service" means an ancillary service that	565
enables the customer to store, send, or receive recorded messages.	566
"Voice mail service" does not include any vertical services that	567
the customer may be required to have in order to utilize the voice	568
mail service.	569

(3) "900 service" means an inbound toll telecommunications	570
service purchased by a subscriber that allows the subscriber's	571
customers to call in to the subscriber's prerecorded announcement	572
or live service, and which is typically marketed under the name	573
"900" service and any subsequent numbers designated by the federal	574
communications commission. "900 service" does not include the	575
charge for collection services provided by the seller of the	576
telecommunications service to the subscriber, or services or	577
products sold by the subscriber to the subscriber's customer.	578

(4) "Prepaid calling service" means the right to access	579
exclusively telecommunications services, which must be paid for in	580
advance and which enables the origination of calls using an access	581
number or authorization code, whether manually or electronically	582
dialed, and that is sold in predetermined units of dollars of	583
which the number declines with use in a known amount.	584

(5) "Prepaid wireless calling service" means a	585
telecommunications service that provides the right to utilize	586
mobile telecommunications service as well as other	587
non-telecommunications services, including the download of digital	588
products delivered electronically, and content and ancillary	589
services, that must be paid for in advance and that is sold in	590
predetermined units of dollars of which the number declines with	591
use in a known amount.	592

(6) "Value-added non-voice data service" means a	593
telecommunications service in which computer processing	594
applications are used to act on the form, content, code, or	595
protocol of the information or data primarily for a purpose other	596
than transmission, conveyance, or routing.	597

(7) "Coin-operated telephone service" means a	598
telecommunications service paid for by inserting money into a	599
telephone accepting direct deposits of money to operate.	600

(8) "Customer" has the same meaning as in section 5739.034 of	601
the Revised Code.	602

(BB) "Laundry and dry cleaning services" means removing soil	603
or dirt from towels, linens, articles of clothing, or other fabric	604
items that belong to others and supplying towels, linens, articles	605
of clothing, or other fabric items. "Laundry and dry cleaning	606
services" does not include the provision of self-service	607
facilities for use by consumers to remove soil or dirt from	608
towels, linens, articles of clothing, or other fabric items.	609

(CC) "Magazines distributed as controlled circulation	610
publications" means magazines containing at least twenty-four	611
pages, at least twenty-five per cent editorial content, issued at	612
regular intervals four or more times a year, and circulated	613
without charge to the recipient, provided that such magazines are	614
not owned or controlled by individuals or business concerns which	615
conduct such publications as an auxiliary to, and essentially for	616
the advancement of the main business or calling of, those who own	617
or control them.	618

(DD) "Landscaping and lawn care service" means the services	619
of planting, seeding, sodding, removing, cutting, trimming,	620
pruning, mulching, aerating, applying chemicals, watering,	621
fertilizing, and providing similar services to establish, promote,	622
or control the growth of trees, shrubs, flowers, grass, ground	623
cover, and other flora, or otherwise maintaining a lawn or	624
landscape grown or maintained by the owner for ornamentation or	625
other nonagricultural purpose. However, "landscaping and lawn care	626
service" does not include the providing of such services by a	627
person who has less than five thousand dollars in sales of such	628
services during the calendar year.	629

(EE) "Private investigation and security service" means the	630
performance of any activity for which the provider of such service	631
is required to be licensed pursuant to Chapter 4749. of the	632
Revised Code, or would be required to be so licensed in performing	633
such services in this state, and also includes the services of	634
conducting polygraph examinations and of monitoring or overseeing	635
the activities on or in, or the condition of, the consumer's home,	636
business, or other facility by means of electronic or similar	637
monitoring devices. "Private investigation and security service"	638
does not include special duty services provided by off-duty police	639
officers, deputy sheriffs, and other peace officers regularly	640
employed by the state or a political subdivision.	641

(FF) "Information services" means providing conversation,	642
giving consultation or advice, playing or making a voice or other	643
recording, making or keeping a record of the number of callers,	644
and any other service provided to a consumer by means of a nine	645
hundred telephone call, except when the nine hundred telephone	646
call is the means by which the consumer makes a contribution to a	647
recognized charity.	648

(GG) "Research and development" means designing, creating, or	649
formulating new or enhanced products, equipment, or manufacturing	650
processes, and also means conducting scientific or technological	651
inquiry and experimentation in the physical sciences with the goal	652
of increasing scientific knowledge which may reveal the bases for	653
new or enhanced products, equipment, or manufacturing processes.	654

(HH) "Qualified research and development equipment" means	655
capitalized tangible personal property, and leased personal	656
property that would be capitalized if purchased, used by a person	657
primarily to perform research and development. Tangible personal	658
property primarily used in testing, as defined in division (A)(4)	659
of section 5739.011 of the Revised Code, or used for recording or	660
storing test results, is not qualified research and development	661
equipment unless such property is primarily used by the consumer	662
in testing the product, equipment, or manufacturing process being	663
created, designed, or formulated by the consumer in the research	664
and development activity or in recording or storing such test	665
results.	666

(II) "Building maintenance and janitorial service" means	667
cleaning the interior or exterior of a building and any tangible	668
personal property located therein or thereon, including any	669
services incidental to such cleaning for which no separate charge	670
is made. However, "building maintenance and janitorial service"	671
does not include the providing of such service by a person who has	672
less than five thousand dollars in sales of such service during	673
the calendar year.	674

(JJ) "Employment service" means providing or supplying	675
personnel, on a temporary or long-term basis, to perform work or	676
labor under the supervision or control of another, when the	677
personnel so provided or supplied receive their wages, salary, or	678
other compensation from the provider or supplier of the employment	679
service or from a third party that provided or supplied the	680
personnel to the provider or supplier. "Employment service" does	681
not include:	682

(1) Acting as a contractor or subcontractor, where the	683
personnel performing the work are not under the direct control of	684
the purchaser.	685

(2) Medical and health care services.

686

(3) Supplying personnel to a purchaser pursuant to a contract	687
of at least one year between the service provider and the	688
purchaser that specifies that each employee covered under the	689
contract is assigned to the purchaser on a permanent basis.	690

(4) Transactions between members of an affiliated group, as	691
defined in division (B)(3)(e) of this section.	692

(5) Transactions where the personnel so provided or supplied	693
by a provider or supplier to a purchaser of an employment service	694
are then provided or supplied by that purchaser to a third party	695
as an employment service, except "employment service" does include	696
the transaction between that purchaser and the third party.	697

(KK) "Employment placement service" means locating or finding	698
employment for a person or finding or locating an employee to fill	699
an available position.	700

(LL) "Exterminating service" means eradicating or attempting	701
to eradicate vermin infestations from a building or structure, or	702
the area surrounding a building or structure, and includes	703
activities to inspect, detect, or prevent vermin infestation of a	704
building or structure.	705

(MM) "Physical fitness facility service" means all	706
transactions by which a membership is granted, maintained, or	707
renewed, including initiation fees, membership dues, renewal fees,	708
monthly minimum fees, and other similar fees and dues, by a	709
physical fitness facility such as an athletic club, health spa, or	710
gymnasium, which entitles the member to use the facility for	711
physical exercise.	712

(NN) "Recreation and sports club service" means all	713
transactions by which a membership is granted, maintained, or	714
renewed, including initiation fees, membership dues, renewal fees,	715
monthly minimum fees, and other similar fees and dues, by a	716
recreation and sports club, which entitles the member to use the	717
facilities of the organization. "Recreation and sports club" means	718
an organization that has ownership of, or controls or leases on a	719
continuing, long-term basis, the facilities used by its members	720
and includes an aviation club, gun or shooting club, yacht club,	721
card club, swimming club, tennis club, golf club, country club,	722
riding club, amateur sports club, or similar organization.	723

(OO) "Livestock" means farm animals commonly raised for food	724
or food production, and includes but is not limited to cattle,	725
sheep, goats, swine, and poultry. "Livestock" does not include	726
invertebrates, fish, amphibians, reptiles, horses, domestic pets,	727
animals for use in laboratories or for exhibition, or other	728
animals not commonly raised for food or food production.	729

(PP) "Livestock structure" means a building or structure used	730
exclusively for the housing, raising, feeding, or sheltering of	731
livestock, and includes feed storage or handling structures and	732
structures for livestock waste handling.	733

(QQ) "Horticulture" means the growing, cultivation, and	734
production of flowers, fruits, herbs, vegetables, sod, mushrooms,	735
and nursery stock. As used in this division, "nursery stock" has	736
the same meaning as in section 927.51 of the Revised Code.	737

(RR) "Horticulture structure" means a building or structure	738
used exclusively for the commercial growing, raising, or	739
overwintering of horticultural products, and includes the area	740
used for stocking, storing, and packing horticultural products	741
when done in conjunction with the production of those products.	742

(SS) "Newspaper" means an unbound publication bearing a title	743
or name that is regularly published, at least as frequently as	744
biweekly, and distributed from a fixed place of business to the	745
public in a specific geographic area, and that contains a	746
substantial amount of news matter of international, national, or	747
local events of interest to the general public.	748

(TT) "Professional racing team" means a person that employs	749
at least twenty full-time employees for the purpose of conducting	750
a motor vehicle racing business for profit. The person must	751
conduct the business with the purpose of racing one or more motor	752
racing vehicles in at least ten competitive professional racing	753
events each year that comprise all or part of a motor racing	754
series sanctioned by one or more motor racing sanctioning	755
organizations. A "motor racing vehicle" means a vehicle for which	756
the chassis, engine, and parts are designed exclusively for motor	757
racing, and does not include a stock or production model vehicle	758
that may be modified for use in racing. For the purposes of this	759
division:	760

(1) A "competitive professional racing event" is a motor	761
vehicle racing event sanctioned by one or more motor racing	762
sanctioning organizations, at which aggregate cash prizes in	763
excess of eight hundred thousand dollars are awarded to the	764
competitors.	765

(2) "Full-time employee" means an individual who is employed	766
for consideration for thirty-five or more hours a week, or who	767
renders any other standard of service generally accepted by custom	768
or specified by contract as full-time employment.	769

(UU)(1) "Lease" or "rental" means any transfer of the	770
possession or control of tangible personal property for a fixed or	771
indefinite term, for consideration. "Lease" or "rental" includes	772
future options to purchase or extend, and agreements described in	773
26 U.S.C. 7701(h)(1) covering motor vehicles and trailers where	774
the amount of consideration may be increased or decreased by	775
reference to the amount realized upon the sale or disposition of	776
the property. "Lease" or "rental" does not include:	777

(a) A transfer of possession or control of tangible personal	778
property under a security agreement or a deferred payment plan	779
that requires the transfer of title upon completion of the	780
required payments;	781

(b) A transfer of possession or control of tangible personal	782
property under an agreement that requires the transfer of title	783
upon completion of required payments and payment of an option	784
price that does not exceed the greater of one hundred dollars or	785
one per cent of the total required payments;	786

(c) Providing tangible personal property along with an	787
operator for a fixed or indefinite period of time, if the operator	788
is necessary for the property to perform as designed. For purposes	789
of this division, the operator must do more than maintain,	790
inspect, or set-up the tangible personal property.	791

(2) "Lease" and "rental," as defined in division (UU) of this	792
section, shall not apply to leases or rentals that exist before	793
June 26, 2003.	794

(3) "Lease" and "rental" have the same meaning as in division	795
(UU)(1) of this section regardless of whether a transaction is	796
characterized as a lease or rental under generally accepted	797
accounting principles, the Internal Revenue Code, Title XIII of	798
the Revised Code, or other federal, state, or local laws.	799

(VV) "Mobile telecommunications service" has the same meaning	800
as in the "Mobile Telecommunications Sourcing Act," Pub. L. No.	801
106-252, 114 Stat. 631 (2000), 4 U.S.C.A. 124(7), as amended, and,	802
on and after August 1, 2003, includes related fees and ancillary	803
services, including universal service fees, detailed billing	804
service, directory assistance, service initiation, voice mail	805
service, and vertical services, such as caller ID and three-way	806
calling.	807

(WW) "Certified service provider" has the same meaning as in	808
section 5740.01 of the Revised Code.	809

(XX) "Satellite broadcasting service" means the distribution	810
or broadcasting of programming or services by satellite directly	811
to the subscriber's receiving equipment without the use of ground	812
receiving or distribution equipment, except the subscriber's	813
receiving equipment or equipment used in the uplink process to the	814
satellite, and includes all service and rental charges, premium	815
channels or other special services, installation and repair	816
service charges, and any other charges having any connection with	817
the provision of the satellite broadcasting service.	818

(YY) "Tangible personal property" means personal property	819
that can be seen, weighed, measured, felt, or touched, or that is	820
in any other manner perceptible to the senses. For purposes of	821
this chapter and Chapter 5741. of the Revised Code, "tangible	822
personal property" includes motor vehicles, electricity, water,	823
gas, steam, and prewritten computer software.	824

(ZZ) "Direct mail" means printed material delivered or	825
distributed by United States mail or other delivery service to a	826
mass audience or to addressees on a mailing list provided by the	827
consumer or at the direction of the consumer when the cost of the	828
items are not billed directly to the recipients. "Direct mail"	829
includes tangible personal property supplied directly or	830
indirectly by the consumer to the direct mail vendor for inclusion	831
in the package containing the printed material. "Direct mail" does	832
not include multiple items of printed material delivered to a	833
single address.	834

(AAA) "Computer" means an electronic device that accepts	835
information in digital or similar form and manipulates it for a	836
result based on a sequence of instructions.	837

(BBB) "Computer software" means a set of coded instructions	838
designed to cause a computer or automatic data processing	839
equipment to perform a task.	840

(CCC) "Delivered electronically" means delivery of computer	841
software from the seller to the purchaser by means other than	842
tangible storage media.	843

(DDD) "Prewritten computer software" means computer software,	844
including prewritten upgrades, that is not designed and developed	845
by the author or other creator to the specifications of a specific	846
purchaser. The combining of two or more prewritten computer	847
software programs or prewritten portions thereof does not cause	848
the combination to be other than prewritten computer software.	849
"Prewritten computer software" includes software designed and	850
developed by the author or other creator to the specifications of	851
a specific purchaser when it is sold to a person other than the	852
purchaser. If a person modifies or enhances computer software of	853
which the person is not the author or creator, the person shall be	854
deemed to be the author or creator only of such person's	855
modifications or enhancements. Prewritten computer software or a	856
prewritten portion thereof that is modified or enhanced to any	857
degree, where such modification or enhancement is designed and	858
developed to the specifications of a specific purchaser, remains	859
prewritten computer software; provided, however, that where there	860
is a reasonable, separately stated charge or an invoice or other	861
statement of the price given to the purchaser for the modification	862
or enhancement, the modification or enhancement shall not	863
constitute prewritten computer software.	864

(EEE)(1) "Food" means substances, whether in liquid,	865
concentrated, solid, frozen, dried, or dehydrated form, that are	866
sold for ingestion or chewing by humans and are consumed for their	867
taste or nutritional value. "Food" does not include alcoholic	868
beverages, dietary supplements, soft drinks, or tobacco.	869

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

870

(a) "Alcoholic beverages" means beverages that are suitable	871
for human consumption and contain one-half of one per cent or more	872
of alcohol by volume.	873

(b) "Dietary supplements" means any product, other than	874
tobacco, that is intended to supplement the diet and that is	875
intended for ingestion in tablet, capsule, powder, softgel,	876
gelcap, or liquid form, or, if not intended for ingestion in such	877
a form, is not represented as conventional food for use as a sole	878
item of a meal or of the diet; that is required to be labeled as a	879
dietary supplement, identifiable by the "supplement facts" box	880
found on the label, as required by 21 C.F.R. 101.36; and that	881
contains one or more of the following dietary ingredients:	882

(i) A vitamin;

883

(ii) A mineral;

884

(iii) An herb or other botanical;

885

(iv) An amino acid;

886

(v) A dietary substance for use by humans to supplement the	887
diet by increasing the total dietary intake;	888

(vi) A concentrate, metabolite, constituent, extract, or	889
combination of any ingredient described in divisions	890
(EEE)(2)(b)(i) to (v) of this section.	891

(c) "Soft drinks" means nonalcoholic beverages that contain	892
natural or artificial sweeteners. "Soft drinks" does not include	893
beverages that contain milk or milk products, soy, rice, or	894
similar milk substitutes, or that contains greater than fifty per	895
cent vegetable or fruit juice by volume.	896

(d) "Tobacco" means cigarettes, cigars, chewing or pipe	897
tobacco, or any other item that contains tobacco.	898

(FFF) "Drug" means a compound, substance, or preparation, and	899
any component of a compound, substance, or preparation, other than	900
food, dietary supplements, or alcoholic beverages that is	901
recognized in the official United States pharmacopoeia, official	902
homeopathic pharmacopoeia of the United States, or official	903
national formulary, and supplements to them; is intended for use	904
in the diagnosis, cure, mitigation, treatment, or prevention of	905
disease; or is intended to affect the structure or any function of	906
the body.	907

(GGG) "Prescription" means an order, formula, or recipe	908
issued in any form of oral, written, electronic, or other means of	909
transmission by a duly licensed practitioner authorized by the	910
laws of this state to issue a prescription.	911

(HHH) "Durable medical equipment" means equipment, including	912
repair and replacement parts for such equipment, that can	913
withstand repeated use, is primarily and customarily used to serve	914
a medical purpose, generally is not useful to a person in the	915
absence of illness or injury, and is not worn in or on the body.	916
"Durable medical equipment" does not include mobility enhancing	917
equipment.	918

(III) "Mobility enhancing equipment" means equipment,	919
including repair and replacement parts for such equipment, that is	920
primarily and customarily used to provide or increase the ability	921
to move from one place to another and is appropriate for use	922
either in a home or a motor vehicle, that is not generally used by	923
persons with normal mobility, and that does not include any motor	924
vehicle or equipment on a motor vehicle normally provided by a	925
motor vehicle manufacturer. "Mobility enhancing equipment" does	926
not include durable medical equipment.	927

(JJJ) "Prosthetic device" means a replacement, corrective, or	928
supportive device, including repair and replacement parts for the	929
device, worn on or in the human body to artificially replace a	930
missing portion of the body, prevent or correct physical deformity	931
or malfunction, or support a weak or deformed portion of the body.	932
As used in this division, "prosthetic device" does not include	933
corrective eyeglasses, contact lenses, or dental prosthesis.	934

(KKK)(1) "Fractional aircraft ownership program" means a	935
program in which persons within an affiliated group sell and	936
manage fractional ownership program aircraft, provided that at	937
least one hundred airworthy aircraft are operated in the program	938
and the program meets all of the following criteria:	939

(a) Management services are provided by at least one program	940
manager within an affiliated group on behalf of the fractional	941
owners.	942

(b) Each program aircraft is owned or possessed by at least	943
one fractional owner.	944

(c) Each fractional owner owns or possesses at least a	945
one-sixteenth interest in at least one fixed-wing program	946
aircraft.	947

(d) A dry-lease aircraft interchange arrangement is in effect	948
among all of the fractional owners.	949

(e) Multi-year program agreements are in effect regarding the	950
fractional ownership, management services, and dry-lease aircraft	951
interchange arrangement aspects of the program.	952

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

953

(a) "Affiliated group" has the same meaning as in division	954
(B)(3)(e) of this section.	955

(b) "Fractional owner" means a person that owns or possesses	956
at least a one-sixteenth interest in a program aircraft and has	957
entered into the agreements described in division (KKK)(1)(e) of	958
this section.	959

(c) "Fractional ownership program aircraft" or "program	960
aircraft" means a turbojet aircraft that is owned or possessed by	961
a fractional owner and that has been included in a dry-lease	962
aircraft interchange arrangement and agreement under divisions	963
(KKK)(1)(d) and (e) of this section, or an aircraft a program	964
manager owns or possesses primarily for use in a fractional	965
aircraft ownership program.	966

(d) "Management services" means administrative and aviation	967
support services furnished under a fractional aircraft ownership	968
program in accordance with a management services agreement under	969
division (KKK)(1)(e) of this section, and offered by the program	970
manager to the fractional owners, including, at a minimum, the	971
establishment and implementation of safety guidelines; the	972
coordination of the scheduling of the program aircraft and crews;	973
program aircraft maintenance; program aircraft insurance; crew	974
training for crews employed, furnished, or contracted by the	975
program manager or the fractional owner; the satisfaction of	976
record-keeping requirements; and the development and use of an	977
operations manual and a maintenance manual for the fractional	978
aircraft ownership program.	979

(e) "Program manager" means the person that offers management	980
services to fractional owners pursuant to a management services	981
agreement under division (KKK)(1)(e) of this section.	982

(LLL) "Electronic publishing" means providing access to one	983
or more of the following primarily for business customers,	984
including the federal government or a state government or a	985
political subdivision thereof, to conduct research: news;	986
business, financial, legal, consumer, or credit materials;	987
editorials, columns, reader commentary, or features; photos or	988
images; archival or research material; legal notices, identity	989
verification, or public records; scientific, educational,	990
instructional, technical, professional, trade, or other literary	991
materials; or other similar information which has been gathered	992
and made available by the provider to the consumer in an	993
electronic format. Providing electronic publishing includes the	994
functions necessary for the acquisition, formatting, editing,	995
storage, and dissemination of data or information that is the	996
subject of a sale.	997

Section 2. That existing section 5739.01 of the Revised Code	998
is hereby repealed.	999

Section 3. That the amendment by this act of section 5739.01	1000
of the Revised Code first applies on the first day of the month	1001
immediately following the effective date of this act.	1002