As Introduced

127th General Assembly Regular Session 2007-2008

H. B. No. 599

Representative Blessing 

Cosponsors: Representatives Batchelder, Combs, Reinhard, Uecker, Stebelton 

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A BILL

To amend sections 5739.01, 5739.02, 5739.035, and

1

5739.17 of the Revised Code to exempt sales of

2

satellite broadcasting services from sales and use

3

taxation and to provide that the provisions of

4

this act in section 5739.035 of the Revised Code

5

terminate on January 1, 2010, when that section is

6

repealed on that date.

7

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

Section 1. That sections 5739.01, 5739.02, 5739.035, and	8
5739.17 of the Revised Code be amended to read as follows:	9

Sec. 5739.01.  As used in this chapter:

10

(A) "Person" includes individuals, receivers, assignees,	11
trustees in bankruptcy, estates, firms, partnerships,	12
associations, joint-stock companies, joint ventures, clubs,	13
societies, corporations, the state and its political subdivisions,	14
and combinations of individuals of any form.	15

(B) "Sale" and "selling" include all of the following	16
transactions for a consideration in any manner, whether absolutely	17
or conditionally, whether for a price or rental, in money or by	18
exchange, and by any means whatsoever:	19

(1) All transactions by which title or possession, or both,	20
of tangible personal property, is or is to be transferred, or a	21
license to use or consume tangible personal property is or is to	22
be granted;	23

(2) All transactions by which lodging by a hotel is or is to	24
be furnished to transient guests;	25

(3) All transactions by which:

26

(a) An item of tangible personal property is or is to be	27
repaired, except property, the purchase of which would not be	28
subject to the tax imposed by section 5739.02 of the Revised Code;	29

(b) An item of tangible personal property is or is to be	30
installed, except property, the purchase of which would not be	31
subject to the tax imposed by section 5739.02 of the Revised Code	32
or property that is or is to be incorporated into and will become	33
a part of a production, transmission, transportation, or	34
distribution system for the delivery of a public utility service;	35

(c) The service of washing, cleaning, waxing, polishing, or	36
painting a motor vehicle is or is to be furnished;	37

(d) Until August 1, 2003, industrial laundry cleaning	38
services are or are to be provided and, on and after August 1,	39
2003, laundry and dry cleaning services are or are to be provided;	40

(e) Automatic data processing, computer services, or	41
electronic information services are or are to be provided for use	42
in business when the true object of the transaction is the receipt	43
by the consumer of automatic data processing, computer services,	44
or electronic information services rather than the receipt of	45
personal or professional services to which automatic data	46
processing, computer services, or electronic information services	47
are incidental or supplemental. Notwithstanding any other	48
provision of this chapter, such transactions that occur between	49
members of an affiliated group are not sales. An "affiliated	50
group" means two or more persons related in such a way that one	51
person owns or controls the business operation of another member	52
of the group. In the case of corporations with stock, one	53
corporation owns or controls another if it owns more than fifty	54
per cent of the other corporation's common stock with voting	55
rights.	56

(f) Telecommunications service, including prepaid calling	57
service, prepaid wireless calling service, or ancillary service,	58
is or is to be provided, but not including coin-operated telephone	59
service;	60

(g) Landscaping and lawn care service is or is to be	61
provided;	62

(h) Private investigation and security service is or is to be	63
provided;	64

(i) Information services or tangible personal property is	65
provided or ordered by means of a nine hundred telephone call;	66

(j) Building maintenance and janitorial service is or is to	67
be provided;	68

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

69

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

70

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

71

(n) Physical fitness facility service is or is to be	72
provided;	73

(o) Recreation and sports club service is or is to be	74
provided;	75

(p) On and after August 1, 2003, satellite broadcasting	76
service is or is to be provided;	77

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

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

(t)(s) On and after August 1, 2003, snow removal service is	98
or 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)(t) Electronic publishing service is or is to be provided	104
to 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

Sec. 5739.02.  For the purpose of providing revenue with	998
which to meet the needs of the state, for the use of the general	999
revenue fund of the state, for the purpose of securing a thorough	1000
and efficient system of common schools throughout the state, for	1001
the purpose of affording revenues, in addition to those from	1002
general property taxes, permitted under constitutional	1003
limitations, and from other sources, for the support of local	1004
governmental functions, and for the purpose of reimbursing the	1005
state for the expense of administering this chapter, an excise tax	1006
is hereby levied on each retail sale made in this state.	1007

(A)(1) The tax shall be collected as provided in section	1008
5739.025 of the Revised Code, provided that on and after July 1,	1009
2003, and on or before June 30, 2005, the rate of tax shall be six	1010
per cent. On and after July 1, 2005, the rate of the tax shall be	1011
five and one-half per cent. The tax applies and is collectible	1012
when the sale is made, regardless of the time when the price is	1013
paid or delivered.	1014

(2) In the case of the lease or rental, with a fixed term of	1015
more than thirty days or an indefinite term with a minimum period	1016
of more than thirty days, of any motor vehicles designed by the	1017
manufacturer to carry a load of not more than one ton, watercraft,	1018
outboard motor, or aircraft, or of any tangible personal property,	1019
other than motor vehicles designed by the manufacturer to carry a	1020
load of more than one ton, to be used by the lessee or renter	1021
primarily for business purposes, the tax shall be collected by the	1022
vendor at the time the lease or rental is consummated and shall be	1023
calculated by the vendor on the basis of the total amount to be	1024
paid by the lessee or renter under the lease agreement. If the	1025
total amount of the consideration for the lease or rental includes	1026
amounts that are not calculated at the time the lease or rental is	1027
executed, the tax shall be calculated and collected by the vendor	1028
at the time such amounts are billed to the lessee or renter. In	1029
the case of an open-end lease or rental, the tax shall be	1030
calculated by the vendor on the basis of the total amount to be	1031
paid during the initial fixed term of the lease or rental, and for	1032
each subsequent renewal period as it comes due. As used in this	1033
division, "motor vehicle" has the same meaning as in section	1034
4501.01 of the Revised Code, and "watercraft" includes an outdrive	1035
unit attached to the watercraft.	1036

A lease with a renewal clause and a termination penalty or	1037
similar provision that applies if the renewal clause is not	1038
exercised is presumed to be a sham transaction. In such a case,	1039
the tax shall be calculated and paid on the basis of the entire	1040
length of the lease period, including any renewal periods, until	1041
the termination penalty or similar provision no longer applies.	1042
The taxpayer shall bear the burden, by a preponderance of the	1043
evidence, that the transaction or series of transactions is not a	1044
sham transaction.	1045

(3) Except as provided in division (A)(2) of this section, in	1046
the case of a sale, the price of which consists in whole or in	1047
part of the lease or rental of tangible personal property, the tax	1048
shall be measured by the installments of that lease or rental.	1049

(4) In the case of a sale of a physical fitness facility	1050
service or recreation and sports club service, the price of which	1051
consists in whole or in part of a membership for the receipt of	1052
the benefit of the service, the tax applicable to the sale shall	1053
be measured by the installments thereof.	1054

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

1055

(1) Sales to the state or any of its political subdivisions,	1056
or to any other state or its political subdivisions if the laws of	1057
that state exempt from taxation sales made to this state and its	1058
political subdivisions;	1059

(2) Sales of food for human consumption off the premises	1060
where sold;	1061

(3) Sales of food sold to students only in a cafeteria,	1062
dormitory, fraternity, or sorority maintained in a private,	1063
public, or parochial school, college, or university;	1064

(4) Sales of newspapers and of magazine subscriptions and	1065
sales or transfers of magazines distributed as controlled	1066
circulation publications;	1067

(5) The furnishing, preparing, or serving of meals without	1068
charge by an employer to an employee provided the employer records	1069
the meals as part compensation for services performed or work	1070
done;	1071

(6) Sales of motor fuel upon receipt, use, distribution, or	1072
sale of which in this state a tax is imposed by the law of this	1073
state, but this exemption shall not apply to the sale of motor	1074
fuel on which a refund of the tax is allowable under division (A)	1075
of section 5735.14 of the Revised Code; and the tax commissioner	1076
may deduct the amount of tax levied by this section applicable to	1077
the price of motor fuel when granting a refund of motor fuel tax	1078
pursuant to division (A) of section 5735.14 of the Revised Code	1079
and shall cause the amount deducted to be paid into the general	1080
revenue fund of this state;	1081

(7) Sales of natural gas by a natural gas company, of water	1082
by a water-works company, or of steam by a heating company, if in	1083
each case the thing sold is delivered to consumers through pipes	1084
or conduits, and all sales of communications services by a	1085
telegraph company, all terms as defined in section 5727.01 of the	1086
Revised Code, and sales of electricity delivered through wires;	1087

(8) Casual sales by a person, or auctioneer employed directly	1088
by the person to conduct such sales, except as to such sales of	1089
motor vehicles, watercraft or outboard motors required to be	1090
titled under section 1548.06 of the Revised Code, watercraft	1091
documented with the United States coast guard, snowmobiles, and	1092
all-purpose vehicles as defined in section 4519.01 of the Revised	1093
Code;	1094

(9)(a) Sales of services or tangible personal property, other	1095
than motor vehicles, mobile homes, and manufactured homes, by	1096
churches, organizations exempt from taxation under section	1097
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit	1098
organizations operated exclusively for charitable purposes as	1099
defined in division (B)(12) of this section, provided that the	1100
number of days on which such tangible personal property or	1101
services, other than items never subject to the tax, are sold does	1102
not exceed six in any calendar year, except as otherwise provided	1103
in division (B)(9)(b) of this section. If the number of days on	1104
which such sales are made exceeds six in any calendar year, the	1105
church or organization shall be considered to be engaged in	1106
business and all subsequent sales by it shall be subject to the	1107
tax. In counting the number of days, all sales by groups within a	1108
church or within an organization shall be considered to be sales	1109
of that church or organization.	1110

(b) The limitation on the number of days on which tax-exempt	1111
sales may be made by a church or organization under division	1112
(B)(9)(a) of this section does not apply to sales made by student	1113
clubs and other groups of students of a primary or secondary	1114
school, or a parent-teacher association, booster group, or similar	1115
organization that raises money to support or fund curricular or	1116
extracurricular activities of a primary or secondary school.	1117

(c) Divisions (B)(9)(a) and (b) of this section do not apply	1118
to sales by a noncommercial educational radio or television	1119
broadcasting station.	1120

(10) Sales not within the taxing power of this state under	1121
the Constitution of the United States;	1122

(11) Except for transactions that are sales under division	1123
(B)(3)(r)(q) of section 5739.01 of the Revised Code, the	1124
transportation of persons or property, unless the transportation	1125
is by a private investigation and security service;	1126

(12) Sales of tangible personal property or services to	1127
churches, to organizations exempt from taxation under section	1128
501(c)(3) of the Internal Revenue Code of 1986, and to any other	1129
nonprofit organizations operated exclusively for charitable	1130
purposes in this state, no part of the net income of which inures	1131
to the benefit of any private shareholder or individual, and no	1132
substantial part of the activities of which consists of carrying	1133
on propaganda or otherwise attempting to influence legislation;	1134
sales to offices administering one or more homes for the aged or	1135
one or more hospital facilities exempt under section 140.08 of the	1136
Revised Code; and sales to organizations described in division (D)	1137
of section 5709.12 of the Revised Code.	1138

"Charitable purposes" means the relief of poverty; the	1139
improvement of health through the alleviation of illness, disease,	1140
or injury; the operation of an organization exclusively for the	1141
provision of professional, laundry, printing, and purchasing	1142
services to hospitals or charitable institutions; the operation of	1143
a home for the aged, as defined in section 5701.13 of the Revised	1144
Code; the operation of a radio or television broadcasting station	1145
that is licensed by the federal communications commission as a	1146
noncommercial educational radio or television station; the	1147
operation of a nonprofit animal adoption service or a county	1148
humane society; the promotion of education by an institution of	1149
learning that maintains a faculty of qualified instructors,	1150
teaches regular continuous courses of study, and confers a	1151
recognized diploma upon completion of a specific curriculum; the	1152
operation of a parent-teacher association, booster group, or	1153
similar organization primarily engaged in the promotion and	1154
support of the curricular or extracurricular activities of a	1155
primary or secondary school; the operation of a community or area	1156
center in which presentations in music, dramatics, the arts, and	1157
related fields are made in order to foster public interest and	1158
education therein; the production of performances in music,	1159
dramatics, and the arts; or the promotion of education by an	1160
organization engaged in carrying on research in, or the	1161
dissemination of, scientific and technological knowledge and	1162
information primarily for the public.	1163

Nothing in this division shall be deemed to exempt sales to	1164
any organization for use in the operation or carrying on of a	1165
trade or business, or sales to a home for the aged for use in the	1166
operation of independent living facilities as defined in division	1167
(A) of section 5709.12 of the Revised Code.	1168

(13) Building and construction materials and services sold to	1169
construction contractors for incorporation into a structure or	1170
improvement to real property under a construction contract with	1171
this state or a political subdivision of this state, or with the	1172
United States government or any of its agencies; building and	1173
construction materials and services sold to construction	1174
contractors for incorporation into a structure or improvement to	1175
real property that are accepted for ownership by this state or any	1176
of its political subdivisions, or by the United States government	1177
or any of its agencies at the time of completion of the structures	1178
or improvements; building and construction materials sold to	1179
construction contractors for incorporation into a horticulture	1180
structure or livestock structure for a person engaged in the	1181
business of horticulture or producing livestock; building	1182
materials and services sold to a construction contractor for	1183
incorporation into a house of public worship or religious	1184
education, or a building used exclusively for charitable purposes	1185
under a construction contract with an organization whose purpose	1186
is as described in division (B)(12) of this section; building	1187
materials and services sold to a construction contractor for	1188
incorporation into a building under a construction contract with	1189
an organization exempt from taxation under section 501(c)(3) of	1190
the Internal Revenue Code of 1986 when the building is to be used	1191
exclusively for the organization's exempt purposes; building and	1192
construction materials sold for incorporation into the original	1193
construction of a sports facility under section 307.696 of the	1194
Revised Code; and building and construction materials and services	1195
sold to a construction contractor for incorporation into real	1196
property outside this state if such materials and services, when	1197
sold to a construction contractor in the state in which the real	1198
property is located for incorporation into real property in that	1199
state, would be exempt from a tax on sales levied by that state;	1200

(14) Sales of ships or vessels or rail rolling stock used or	1201
to be used principally in interstate or foreign commerce, and	1202
repairs, alterations, fuel, and lubricants for such ships or	1203
vessels or rail rolling stock;	1204

(15) Sales to persons primarily engaged in any of the	1205
activities mentioned in division (B)(42)(a) or (g) of this	1206
section, to persons engaged in making retail sales, or to persons	1207
who purchase for sale from a manufacturer tangible personal	1208
property that was produced by the manufacturer in accordance with	1209
specific designs provided by the purchaser, of packages, including	1210
material, labels, and parts for packages, and of machinery,	1211
equipment, and material for use primarily in packaging tangible	1212
personal property produced for sale, including any machinery,	1213
equipment, and supplies used to make labels or packages, to	1214
prepare packages or products for labeling, or to label packages or	1215
products, by or on the order of the person doing the packaging, or	1216
sold at retail. "Packages" includes bags, baskets, cartons,	1217
crates, boxes, cans, bottles, bindings, wrappings, and other	1218
similar devices and containers, but does not include motor	1219
vehicles or bulk tanks, trailers, or similar devices attached to	1220
motor vehicles. "Packaging" means placing in a package. Division	1221
(B)(15) of this section does not apply to persons engaged in	1222
highway transportation for hire.	1223

(16) Sales of food to persons using food stamp benefits to	1224
purchase the food. As used in this division, "food" has the same	1225
meaning as in the "Food Stamp Act of 1977," 91 Stat. 958, 7 U.S.C.	1226
2012, as amended, and federal regulations adopted pursuant to that	1227
act.	1228

(17) Sales to persons engaged in farming, agriculture,	1229
horticulture, or floriculture, of tangible personal property for	1230
use or consumption directly in the production by farming,	1231
agriculture, horticulture, or floriculture of other tangible	1232
personal property for use or consumption directly in the	1233
production of tangible personal property for sale by farming,	1234
agriculture, horticulture, or floriculture; or material and parts	1235
for incorporation into any such tangible personal property for use	1236
or consumption in production; and of tangible personal property	1237
for such use or consumption in the conditioning or holding of	1238
products produced by and for such use, consumption, or sale by	1239
persons engaged in farming, agriculture, horticulture, or	1240
floriculture, except where such property is incorporated into real	1241
property;	1242

(18) Sales of drugs for a human being that may be dispensed	1243
only pursuant to a prescription; insulin as recognized in the	1244
official United States pharmacopoeia; urine and blood testing	1245
materials when used by diabetics or persons with hypoglycemia to	1246
test for glucose or acetone; hypodermic syringes and needles when	1247
used by diabetics for insulin injections; epoetin alfa when	1248
purchased for use in the treatment of persons with medical	1249
disease; hospital beds when purchased by hospitals, nursing homes,	1250
or other medical facilities; and medical oxygen and medical	1251
oxygen-dispensing equipment when purchased by hospitals, nursing	1252
homes, or other medical facilities;	1253

(19) Sales of prosthetic devices, durable medical equipment	1254
for home use, or mobility enhancing equipment, when made pursuant	1255
to a prescription and when such devices or equipment are for use	1256
by a human being.	1257

(20) Sales of emergency and fire protection vehicles and	1258
equipment to nonprofit organizations for use solely in providing	1259
fire protection and emergency services, including trauma care and	1260
emergency medical services, for political subdivisions of the	1261
state;	1262

(21) Sales of tangible personal property manufactured in this	1263
state, if sold by the manufacturer in this state to a retailer for	1264
use in the retail business of the retailer outside of this state	1265
and if possession is taken from the manufacturer by the purchaser	1266
within this state for the sole purpose of immediately removing the	1267
same from this state in a vehicle owned by the purchaser;	1268

(22) Sales of services provided by the state or any of its	1269
political subdivisions, agencies, instrumentalities, institutions,	1270
or authorities, or by governmental entities of the state or any of	1271
its political subdivisions, agencies, instrumentalities,	1272
institutions, or authorities;	1273

(23) Sales of motor vehicles to nonresidents of this state	1274
under the circumstances described in division (B) of section	1275
5739.029 of the Revised Code;	1276

(24) Sales to persons engaged in the preparation of eggs for	1277
sale of tangible personal property used or consumed directly in	1278
such preparation, including such tangible personal property used	1279
for cleaning, sanitizing, preserving, grading, sorting, and	1280
classifying by size; packages, including material and parts for	1281
packages, and machinery, equipment, and material for use in	1282
packaging eggs for sale; and handling and transportation equipment	1283
and parts therefor, except motor vehicles licensed to operate on	1284
public highways, used in intraplant or interplant transfers or	1285
shipment of eggs in the process of preparation for sale, when the	1286
plant or plants within or between which such transfers or	1287
shipments occur are operated by the same person. "Packages"	1288
includes containers, cases, baskets, flats, fillers, filler flats,	1289
cartons, closure materials, labels, and labeling materials, and	1290
"packaging" means placing therein.	1291

(25)(a) Sales of water to a consumer for residential use,	1292
except the sale of bottled water, distilled water, mineral water,	1293
carbonated water, or ice;	1294

(b) Sales of water by a nonprofit corporation engaged	1295
exclusively in the treatment, distribution, and sale of water to	1296
consumers, if such water is delivered to consumers through pipes	1297
or tubing.	1298

(26) Fees charged for inspection or reinspection of motor	1299
vehicles under section 3704.14 of the Revised Code;	1300

(27) Sales to persons licensed to conduct a food service	1301
operation pursuant to section 3717.43 of the Revised Code, of	1302
tangible personal property primarily used directly for the	1303
following:	1304

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

1305

(b) To preserve food that has been or will be prepared for	1306
human consumption for sale by the food service operator, not	1307
including tangible personal property used to display food for	1308
selection by the consumer;	1309

(c) To clean tangible personal property used to prepare or	1310
serve food for human consumption for sale.	1311

(28) Sales of animals by nonprofit animal adoption services	1312
or county humane societies;	1313

(29) Sales of services to a corporation described in division	1314
(A) of section 5709.72 of the Revised Code, and sales of tangible	1315
personal property that qualifies for exemption from taxation under	1316
section 5709.72 of the Revised Code;	1317

(30) Sales and installation of agricultural land tile, as	1318
defined in division (B)(5)(a) of section 5739.01 of the Revised	1319
Code;	1320

(31) Sales and erection or installation of portable grain	1321
bins, as defined in division (B)(5)(b) of section 5739.01 of the	1322
Revised Code;	1323

(32) The sale, lease, repair, and maintenance of, parts for,	1324
or items attached to or incorporated in, motor vehicles that are	1325
primarily used for transporting tangible personal property	1326
belonging to others by a person engaged in highway transportation	1327
for hire, except for packages and packaging used for the	1328
transportation of tangible personal property;	1329

(33) Sales to the state headquarters of any veterans'	1330
organization in this state that is either incorporated and issued	1331
a charter by the congress of the United States or is recognized by	1332
the United States veterans administration, for use by the	1333
headquarters;	1334

(34) Sales to a telecommunications service vendor, mobile	1335
telecommunications service vendor, or satellite broadcasting	1336
service vendor of tangible personal property and services used	1337
directly and primarily in transmitting, receiving, switching, or	1338
recording any interactive, one- or two-way electromagnetic	1339
communications, including voice, image, data, and information,	1340
through the use of any medium, including, but not limited to,	1341
poles, wires, cables, switching equipment, computers, and record	1342
storage devices and media, and component parts for the tangible	1343
personal property. The exemption provided in this division shall	1344
be in lieu of all other exemptions under division (B)(42)(a) of	1345
this section to which the vendor may otherwise be entitled, based	1346
upon the use of the thing purchased in providing the	1347
telecommunications, mobile telecommunications, or satellite	1348
broadcasting service.	1349

(35)(a) Sales where the purpose of the consumer is to use or	1350
consume the things transferred in making retail sales and	1351
consisting of newspaper inserts, catalogues, coupons, flyers, gift	1352
certificates, or other advertising material that prices and	1353
describes tangible personal property offered for retail sale.	1354

(b) Sales to direct marketing vendors of preliminary	1355
materials such as photographs, artwork, and typesetting that will	1356
be used in printing advertising material; of printed matter that	1357
offers free merchandise or chances to win sweepstake prizes and	1358
that is mailed to potential customers with advertising material	1359
described in division (B)(35)(a) of this section; and of equipment	1360
such as telephones, computers, facsimile machines, and similar	1361
tangible personal property primarily used to accept orders for	1362
direct marketing retail sales.	1363

(c) Sales of automatic food vending machines that preserve	1364
food with a shelf life of forty-five days or less by refrigeration	1365
and dispense it to the consumer.	1366

For purposes of division (B)(35) of this section, "direct	1367
marketing" means the method of selling where consumers order	1368
tangible personal property by United States mail, delivery	1369
service, or telecommunication and the vendor delivers or ships the	1370
tangible personal property sold to the consumer from a warehouse,	1371
catalogue distribution center, or similar fulfillment facility by	1372
means of the United States mail, delivery service, or common	1373
carrier.	1374

(36) Sales to a person engaged in the business of	1375
horticulture or producing livestock of materials to be	1376
incorporated into a horticulture structure or livestock structure;	1377

(37) Sales of personal computers, computer monitors, computer	1378
keyboards, modems, and other peripheral computer equipment to an	1379
individual who is licensed or certified to teach in an elementary	1380
or a secondary school in this state for use by that individual in	1381
preparation for teaching elementary or secondary school students;	1382

(38) Sales to a professional racing team of any of the	1383
following:	1384

(a) Motor racing vehicles;

1385

(b) Repair services for motor racing vehicles;

1386

(c) Items of property that are attached to or incorporated in	1387
motor racing vehicles, including engines, chassis, and all other	1388
components of the vehicles, and all spare, replacement, and	1389
rebuilt parts or components of the vehicles; except not including	1390
tires, consumable fluids, paint, and accessories consisting of	1391
instrumentation sensors and related items added to the vehicle to	1392
collect and transmit data by means of telemetry and other forms of	1393
communication.	1394

(39) Sales of used manufactured homes and used mobile homes,	1395
as defined in section 5739.0210 of the Revised Code, made on or	1396
after January 1, 2000;	1397

(40) Sales of tangible personal property and services to a	1398
provider of electricity used or consumed directly and primarily in	1399
generating, transmitting, or distributing electricity for use by	1400
others, including property that is or is to be incorporated into	1401
and will become a part of the consumer's production, transmission,	1402
or distribution system and that retains its classification as	1403
tangible personal property after incorporation; fuel or power used	1404
in the production, transmission, or distribution of electricity;	1405
and tangible personal property and services used in the repair and	1406
maintenance of the production, transmission, or distribution	1407
system, including only those motor vehicles as are specially	1408
designed and equipped for such use. The exemption provided in this	1409
division shall be in lieu of all other exemptions in division	1410
(B)(42)(a) of this section to which a provider of electricity may	1411
otherwise be entitled based on the use of the tangible personal	1412
property or service purchased in generating, transmitting, or	1413
distributing electricity.	1414

(41) Sales to a person providing services under division	1415
(B)(3)(r)(q) of section 5739.01 of the Revised Code of tangible	1416
personal property and services used directly and primarily in	1417
providing taxable services under that section.	1418

(42) Sales where the purpose of the purchaser is to do any of	1419
the following:	1420

(a) To incorporate the thing transferred as a material or a	1421
part into tangible personal property to be produced for sale by	1422
manufacturing, assembling, processing, or refining; or to use or	1423
consume the thing transferred directly in producing tangible	1424
personal property for sale by mining, including, without	1425
limitation, the extraction from the earth of all substances that	1426
are classed geologically as minerals, production of crude oil and	1427
natural gas, farming, agriculture, horticulture, or floriculture,	1428
or directly in the rendition of a public utility service, except	1429
that the sales tax levied by this section shall be collected upon	1430
all meals, drinks, and food for human consumption sold when	1431
transporting persons. Persons engaged in rendering farming,	1432
agricultural, horticultural, or floricultural services, and	1433
services in the exploration for, and production of, crude oil and	1434
natural gas, for others are deemed engaged directly in farming,	1435
agriculture, horticulture, and floriculture, or exploration for,	1436
and production of, crude oil and natural gas. This paragraph does	1437
not exempt from "retail sale" or "sales at retail" the sale of	1438
tangible personal property that is to be incorporated into a	1439
structure or improvement to real property.	1440

(b) To hold the thing transferred as security for the	1441
performance of an obligation of the vendor;	1442

(c) To resell, hold, use, or consume the thing transferred as	1443
evidence of a contract of insurance;	1444

(d) To use or consume the thing directly in commercial	1445
fishing;	1446

(e) To incorporate the thing transferred as a material or a	1447
part into, or to use or consume the thing transferred directly in	1448
the production of, magazines distributed as controlled circulation	1449
publications;	1450

(f) To use or consume the thing transferred in the production	1451
and preparation in suitable condition for market and sale of	1452
printed, imprinted, overprinted, lithographic, multilithic,	1453
blueprinted, photostatic, or other productions or reproductions of	1454
written or graphic matter;	1455

(g) To use the thing transferred, as described in section	1456
5739.011 of the Revised Code, primarily in a manufacturing	1457
operation to produce tangible personal property for sale;	1458

(h) To use the benefit of a warranty, maintenance or service	1459
contract, or similar agreement, as described in division (B)(7) of	1460
section 5739.01 of the Revised Code, to repair or maintain	1461
tangible personal property, if all of the property that is the	1462
subject of the warranty, contract, or agreement would not be	1463
subject to the tax imposed by this section;	1464

(i) To use the thing transferred as qualified research and	1465
development equipment;	1466

(j) To use or consume the thing transferred primarily in	1467
storing, transporting, mailing, or otherwise handling purchased	1468
sales inventory in a warehouse, distribution center, or similar	1469
facility when the inventory is primarily distributed outside this	1470
state to retail stores of the person who owns or controls the	1471
warehouse, distribution center, or similar facility, to retail	1472
stores of an affiliated group of which that person is a member, or	1473
by means of direct marketing. This division does not apply to	1474
motor vehicles registered for operation on the public highways. As	1475
used in this division, "affiliated group" has the same meaning as	1476
in division (B)(3)(e) of section 5739.01 of the Revised Code and	1477
"direct marketing" has the same meaning as in division (B)(35) of	1478
this section.	1479

(k) To use or consume the thing transferred to fulfill a	1480
contractual obligation incurred by a warrantor pursuant to a	1481
warranty provided as a part of the price of the tangible personal	1482
property sold or by a vendor of a warranty, maintenance or service	1483
contract, or similar agreement the provision of which is defined	1484
as a sale under division (B)(7) of section 5739.01 of the Revised	1485
Code;	1486

(l) To use or consume the thing transferred in the production	1487
of a newspaper for distribution to the public;	1488

(m) To use tangible personal property to perform a service	1489
listed in division (B)(3) of section 5739.01 of the Revised Code,	1490
if the property is or is to be permanently transferred to the	1491
consumer of the service as an integral part of the performance of	1492
the service.	1493

(n) To use or consume the thing transferred in acquiring,	1494
formatting, editing, storing, and disseminating data or	1495
information by electronic publishing.	1496

As used in division (B)(42) of this section, "thing" includes	1497
all transactions included in divisions (B)(3)(a), (b), and (e) of	1498
section 5739.01 of the Revised Code.	1499

(43) Sales conducted through a coin operated device that	1500
activates vacuum equipment or equipment that dispenses water,	1501
whether or not in combination with soap or other cleaning agents	1502
or wax, to the consumer for the consumer's use on the premises in	1503
washing, cleaning, or waxing a motor vehicle, provided no other	1504
personal property or personal service is provided as part of the	1505
transaction.	1506

(44) Sales of replacement and modification parts for engines,	1507
airframes, instruments, and interiors in, and paint for, aircraft	1508
used primarily in a fractional aircraft ownership program, and	1509
sales of services for the repair, modification, and maintenance of	1510
such aircraft, and machinery, equipment, and supplies primarily	1511
used to provide those services.	1512

(45) Sales of telecommunications service that is used	1513
directly and primarily to perform the functions of a call center.	1514
As used in this division, "call center" means any physical	1515
location where telephone calls are placed or received in high	1516
volume for the purpose of making sales, marketing, customer	1517
service, technical support, or other specialized business	1518
activity, and that employs at least fifty individuals that engage	1519
in call center activities on a full-time basis, or sufficient	1520
individuals to fill fifty full-time equivalent positions.	1521

(46) Sales by a telecommunications service vendor of 900	1522
service to a subscriber. This division does not apply to	1523
information services, as defined in division (FF) of section	1524
5739.01 of the Revised Code.	1525

(47) Sales of value-added non-voice data service. This	1526
division does not apply to any similar service that is not	1527
otherwise a telecommunications service.	1528

(C) For the purpose of the proper administration of this	1529
chapter, and to prevent the evasion of the tax, it is presumed	1530
that all sales made in this state are subject to the tax until the	1531
contrary is established.	1532

(D) The levy of this tax on retail sales of recreation and	1533
sports club service shall not prevent a municipal corporation from	1534
levying any tax on recreation and sports club dues or on any	1535
income generated by recreation and sports club dues.	1536

(E) The tax collected by the vendor from the consumer under	1537
this chapter is not part of the price, but is a tax collection for	1538
the benefit of the state, and of counties levying an additional	1539
sales tax pursuant to section 5739.021 or 5739.026 of the Revised	1540
Code and of transit authorities levying an additional sales tax	1541
pursuant to section 5739.023 of the Revised Code. Except for the	1542
discount authorized under section 5739.12 of the Revised Code and	1543
the effects of any rounding pursuant to section 5703.055 of the	1544
Revised Code, no person other than the state or such a county or	1545
transit authority shall derive any benefit from the collection or	1546
payment of the tax levied by this section or section 5739.021,	1547
5739.023, or 5739.026 of the Revised Code.	1548

Sec. 5739.035. This section only applies to sales that may be	1549
sitused under this section pursuant to division (B) of section	1550
5739.033 of the Revised Code.	1551

(A) Except as otherwise provided in this section, the situs	1552
of all sales is the vendor's place of business.	1553

(1) If the consumer or the consumer's agent takes possession	1554
of the tangible personal property at a place of business of the	1555
vendor where the purchase contract or agreement was made, the	1556
situs of the sale is that place of business.	1557

(2) If the consumer or the consumer's agent takes possession	1558
of the tangible personal property other than at a place of	1559
business of the vendor, or takes possession at a warehouse or	1560
similar facility of the vendor, the situs of the sale is the	1561
vendor's place of business where the purchase contract or	1562
agreement was made or the purchase order was received.	1563

(3) If the vendor provides a service specified in division	1564
(B)(3)(a), (b), (c), (d), (n), (o), (p), (q), or (r), or (s) of	1565
section 5739.01 or makes a sale specified in division (B)(8) of	1566
section 5739.01 of the Revised Code, the situs of the sale is the	1567
vendor's place of business where the service is performed or the	1568
contract or agreement for the service was made or the purchase	1569
order was received.	1570

(B) If the vendor is a transient vendor as specified in	1571
division (B) of section 5739.17 of the Revised Code, the situs of	1572
the sale is the vendor's temporary place of business or, if the	1573
transient vendor is the lessor of titled motor vehicles, titled	1574
watercraft, or titled outboard motors, at the location where the	1575
lessee keeps the leased property.	1576

(C) If the vendor makes sales of tangible personal property	1577
from a stock of goods carried in a motor vehicle, from which the	1578
purchaser makes selection and takes possession, or from which the	1579
vendor sells tangible personal property the quantity of which has	1580
not been determined prior to the time the purchaser takes	1581
possession, the situs of the sale is the location of the motor	1582
vehicle when the sale is made.	1583

(D) If the vendor is a delivery vendor as specified in	1584
division (D) of section 5739.17 of the Revised Code, the situs of	1585
the sale is the place where the tangible personal property is	1586
delivered, where the leased property is used, or where the service	1587
is performed or received.	1588

(E) If the vendor provides a service specified in division	1589
(B)(3)(e), (g), (h), (j), (k), (l), (m), (p)(s), or (t), or (u)	1590
of section 5739.01 of the Revised Code, the situs of the sale is	1591
the location of the consumer where the service is performed or	1592
received.	1593

(F) If the vendor provides lodging to transient guests as	1594
specified in division (B)(2) of section 5739.01 of the Revised	1595
Code, the situs of the sale is the location where the lodging is	1596
located.	1597

(G) If the vendor sells a warranty, maintenance or service	1598
contract, or similar agreement as specified in division (B)(7) of	1599
section 5739.01 of the Revised Code and the vendor is a delivery	1600
vendor, the situs of the sale is the location of the consumer. If	1601
the vendor is not a delivery vendor, the situs of the sale is the	1602
vendor's place of business where the contract or agreement was	1603
made, unless the warranty or contract is a component of the sale	1604
of a titled motor vehicle, titled watercraft, or titled outboard	1605
motor, in which case the situs of the sale is the county of	1606
titling.	1607

(H) Except as otherwise provided in this division, if the	1608
vendor sells a prepaid authorization number or a prepaid telephone	1609
calling card, the situs of the sale is the vendor's place of	1610
business and shall be taxed at the time of sale. If the vendor	1611
sells a prepaid authorization number or prepaid telephone calling	1612
card through a telephone call, electronic commerce, or any other	1613
form of remote commerce, the situs of the sale is the consumer's	1614
shipping address, or, if there is no item shipped, at the	1615
consumer's billing address.	1616

(I) Division (I) of this section applies only if the tax	1617
commissioner makes the certification provided under section	1618
5740.10 of the Revised Code.	1619

(1) In each delivery sale by a vendor permitted to situs its	1620
sales under this section, the vendor shall clearly indicate on	1621
the invoice or other similar document provided to the purchaser	1622
at the time of the sale that the vendor is a vendor permitted to	1623
situs its sales under this section.	1624

(2) A purchaser that receives tangible personal property or	1625
services in a delivery sale from a vendor permitted to situs its	1626
sales under this section may claim a refund of the tax the vendor	1627
collected and remitted on the sale in an amount equal to the	1628
excess of the tax collected and remitted over the tax that would	1629
have been due if the sale had been sitused to the tax jurisdiction	1630
in which the purchaser received the property or service.	1631

A refund is authorized under this division only if the	1632
invoice or other similar document provided to the purchaser at the	1633
time of the sale includes the notice required under division	1634
(I)(1) of this section.	1635

Refunds shall be filed directly with the tax commissioner and	1636
claimed in the manner prescribed by section 5739.07 of the	1637
Revised Code.	1638

(3) A purchaser of tangible personal property from a vendor	1639
permitted to situs its sales under this section that removes the	1640
property from the tax jurisdiction in which the resident received	1641
the property is liable for additional tax in an amount equal to	1642
the excess of the tax that would have been due on the sale if the	1643
sale had been sitused to the tax jurisdiction to which the	1644
purchaser removed the property over the tax that the vendor	1645
collected and remitted on the sale.	1646

(4) Nothing in this section relieves a person claiming to be	1647
authorized to situs sales under this section, but not so	1648
authorized, from liability for tax, penalty, interest, or	1649
additional charges imposed under this chapter for failure to	1650
collect the amount of tax lawfully due applying the situsing	1651
provisions of divisions (C) to (I) of section 5739.033 of the	1652
Revised Code.	1653

(5) For the purposes of division (I) of this section,	1654
"delivery sale" has the same meaning as in section 5739.033 of the	1655
Revised Code, and "tax jurisdiction" has the same meaning as in	1656
section 5739.24 of the Revised Code.	1657

Sec. 5739.17.  (A) No person shall engage in making retail	1658
sales subject to a tax imposed by or pursuant to section 5739.02,	1659
5739.021, 5739.023, or 5739.026 of the Revised Code as a business	1660
without having a license therefor, except as otherwise provided in	1661
divisions (A)(1), (2), and (3) of this section.	1662

(1) In the dissolution of a partnership by death, the	1663
surviving partner may operate under the license of the partnership	1664
for a period of sixty days.	1665

(2) The heirs or legal representatives of deceased persons,	1666
and receivers and trustees in bankruptcy, appointed by any	1667
competent authority, may operate under the license of the person	1668
so succeeded in possession.	1669

(3) Two or more persons who are not partners may operate a	1670
single place of business under one license. In such case neither	1671
the retirement of any such person from business at that place of	1672
business, nor the entrance of any person, under an existing	1673
arrangement, shall affect the license or require the issuance of a	1674
new license, unless the person retiring from the business is the	1675
individual named on the vendor's license.	1676

Except as otherwise provided in this section, each applicant	1677
for a license shall make out and deliver to the county auditor of	1678
each county in which the applicant desires to engage in business,	1679
upon a blank to be furnished by such auditor for that purpose, a	1680
statement showing the name of the applicant, each place of	1681
business in the county where the applicant will make retail sales,	1682
the nature of the business, and any other information the tax	1683
commissioner reasonably prescribes in the form of a statement	1684
prescribed by the commissioner.	1685

At the time of making the application, the applicant shall	1686
pay into the county treasury a license fee in the sum of	1687
twenty-five dollars for each fixed place of business in the county	1688
that will be the situs of retail sales. Upon receipt of the	1689
application and exhibition of the county treasurer's receipt,	1690
showing the payment of the license fee, the county auditor shall	1691
issue to the applicant a license for each fixed place of business	1692
designated in the application, authorizing the applicant to engage	1693
in business at that location. If a vendor's identity changes, the	1694
vendor shall apply for a new license. If a vendor wishes to move	1695
an existing fixed place of business to a new location within the	1696
same county, the vendor shall obtain a new vendor's license or	1697
submit a request to the tax commissioner to transfer the existing	1698
vendor's license to the new location. When the new location has	1699
been verified as being within the same county, the commissioner	1700
shall authorize the transfer and notify the county auditor of the	1701
change of location. If a vendor wishes to move an existing fixed	1702
place of business to another county, the vendor's license shall	1703
not transfer and the vendor shall obtain a new vendor's license	1704
from the county in which the business is to be located. The form	1705
of the license shall be prescribed by the commissioner. The fees	1706
collected shall be credited to the general fund of the county.	1707

The tax commissioner may establish or participate in a	1708
registration system whereby any vendor may obtain a vendor's	1709
license by submitting to the commissioner a vendor's license	1710
application and a license fee of twenty-five dollars for each	1711
fixed place of business at which the vendor intends to make retail	1712
sales. Under this registration system, the commissioner shall	1713
issue a vendor's license to the applicant on behalf of the county	1714
auditor of the county in which the applicant desires to engage in	1715
business, and shall forward a copy of the application and license	1716
fee to that county. All such license fees received by the	1717
commissioner for the issuance of vendor's licenses shall be	1718
deposited into the vendor's license application fund, which is	1719
hereby created in the state treasury. The commissioner shall	1720
certify to the director of budget and management within ten	1721
business days after the close of a month the license fees to be	1722
transmitted to each county from the vendor's license application	1723
fund for vendor's license applications received by the	1724
commissioner during that month. License fees transmitted to a	1725
county for which payment was not received by the commissioner may	1726
be netted against a future distribution to that county, including	1727
distributions made pursuant to section 5739.21 of the Revised	1728
Code.	1729

A vendor that makes retail sales subject to tax under Chapter	1730
5739. of the Revised Code pursuant to a permit issued by the	1731
division of liquor control shall obtain a vendor's license in the	1732
identical name and for the identical address as shown on the	1733
permit.	1734

Except as otherwise provided in this section, if a vendor has	1735
no fixed place of business and sells from a vehicle, each vehicle	1736
intended to be used within a county constitutes a place of	1737
business for the purpose of this section.	1738

(B) As used in this division, "transient vendor" means any	1739
person who makes sales of tangible personal property from vending	1740
machines located on land owned by others, who leases titled motor	1741
vehicles, titled watercraft, or titled outboard motors, who	1742
effectuates leases that are taxed according to division (A)(2) of	1743
section 5739.02 of the Revised Code, or who, in the usual course	1744
of the person's business, transports inventory, stock of goods, or	1745
similar tangible personal property to a temporary place of	1746
business or temporary exhibition, show, fair, flea market, or	1747
similar event in a county in which the person has no fixed place	1748
of business, for the purpose of making retail sales of such	1749
property. A "temporary place of business" means any public or	1750
quasi-public place including, but not limited to, a hotel, rooming	1751
house, storeroom, building, part of a building, tent, vacant lot,	1752
railroad car, or motor vehicle that is temporarily occupied for	1753
the purpose of making retail sales of goods to the public. A place	1754
of business is not temporary if the same person conducted business	1755
at the place continuously for more than six months or occupied the	1756
premises as the person's permanent residence for more than six	1757
months, or if the person intends it to be a fixed place of	1758
business.	1759

Any transient vendor, in lieu of obtaining a vendor's license	1760
under division (A) of this section for counties in which the	1761
transient vendor has no fixed place of business, may apply to the	1762
tax commissioner, on a form prescribed by the commissioner, for a	1763
transient vendor's license. The transient vendor's license	1764
authorizes the transient vendor to make retail sales in any county	1765
in which the transient vendor does not maintain a fixed place of	1766
business. Any holder of a transient vendor's license shall not be	1767
required to obtain a separate vendor's license from the county	1768
auditor in that county. Upon the commissioner's determination that	1769
an applicant is a transient vendor, the applicant shall pay a	1770
license fee in the amount of twenty-five dollars, at which time	1771
the tax commissioner shall issue the license. The tax commissioner	1772
may require a vendor to be licensed as a transient vendor if, in	1773
the opinion of the commissioner, such licensing is necessary for	1774
the efficient administration of the tax.	1775

Any holder of a valid transient vendor's license may make	1776
retail sales at a temporary place of business or temporary	1777
exhibition, show, fair, flea market, or similar event, held	1778
anywhere in the state without complying with any provision of	1779
section 311.37 of the Revised Code. Any holder of a valid vendor's	1780
license may make retail sales as a transient vendor at a temporary	1781
place of business or temporary exhibition, show, fair, flea	1782
market, or similar event held in any county in which the vendor	1783
maintains a fixed place of business for which the vendor holds a	1784
vendor's license without obtaining a transient vendor's license.	1785

(C) As used in this division, "service vendor" means any	1786
person who, in the usual course of the person's business, sells	1787
services described in division (B)(3)(e), (f), (g), (h), (i), (j),	1788
(k), (l), (m), (p), or (t)(s) of section 5739.01 of the Revised	1789
Code.	1790

Every service vendor shall make application to the tax	1791
commissioner for a service vendor's license. Each applicant shall	1792
pay a license fee in the amount of twenty-five dollars. Upon the	1793
commissioner's determination that an applicant is a service vendor	1794
and payment of the fee, the commissioner shall issue the applicant	1795
a service vendor's license.	1796

Only sales described in division (B)(3)(e), (f), (g), (h),	1797
(i), (j), (k), (l), (m), (p), or (t)(s) of section 5739.01 of the	1798
Revised Code may be made under authority of a service vendor's	1799
license, and that license authorizes sales to be made at any place	1800
in this state. Any service vendor who makes sales of other	1801
services or tangible personal property subject to the sales tax	1802
also shall be licensed under division (A), (B), or (D) of this	1803
section.	1804

(D) As used in this division, "delivery vendor" means any	1805
vendor who engages in one or more of the activities described in	1806
divisions (D)(1) to (4) of this section, and who maintains no	1807
store, showroom, or similar fixed place of business or other	1808
location where merchandise regularly is offered for sale or	1809
displayed or shown in catalogs for selection or pick-up by	1810
consumers, or where consumers bring goods for repair or other	1811
service.	1812

(1) The vendor makes retail sales of tangible personal	1813
property;	1814

(2) The vendor rents or leases, at retail, tangible personal	1815
property, except titled motor vehicles, titled watercraft, or	1816
titled outboard motors;	1817

(3) The vendor provides a service, at retail, described in	1818
division (B)(3)(a), (b), (c), or (d) of section 5739.01 of the	1819
Revised Code; or	1820

(4) The vendor makes retail sales of warranty, maintenance or	1821
service contracts, or similar agreements as described in division	1822
(B)(7) of section 5739.01 of the Revised Code.	1823

A transient vendor or a seller registered pursuant to section	1824
5741.17 of the Revised Code is not a delivery vendor.	1825

Delivery vendors shall apply to the tax commissioner, on a	1826
form prescribed by the commissioner, for a delivery vendor's	1827
license. Each applicant shall pay a license fee of twenty-five	1828
dollars for each delivery vendor's license, to be credited to the	1829
general revenue fund. Upon the commissioner's determination that	1830
the applicant is a delivery vendor, the commissioner shall issue	1831
the license. A delivery vendor's license authorizes retail sales	1832
to be made throughout the state. All sales of the vendor must be	1833
reported under the delivery license. The commissioner may require	1834
a vendor to be licensed as a delivery vendor if, in the opinion of	1835
the commissioner, such licensing is necessary for the efficient	1836
administration of the tax. The commissioner shall not issue a	1837
delivery vendor license to a vendor who holds a license issued	1838
under division (A) of this section.	1839

(E) Any transient vendor who is issued a license pursuant to	1840
this section shall display the license or a copy of it	1841
prominently, in plain view, at every place of business of the	1842
transient vendor. Every owner, organizer, or promoter who operates	1843
a fair, flea market, show, exhibition, convention, or similar	1844
event at which transient vendors are present shall keep a	1845
comprehensive record of all such vendors, listing the vendor's	1846
name, permanent address, vendor's license number, and the type of	1847
goods sold. Such records shall be kept for four years and shall be	1848
open to inspection by the tax commissioner.	1849

Section 2. That existing sections 5739.01, 5739.02, 5739.035,	1850
and 5739.17 of the Revised Code are hereby repealed.	1851

Section 3. That the amendment by this act of sections	1852
5739.01, 5739.02, 5739.035, and 5739.17 of the Revised Code	1853
applies to sales occurring on or after January 1, 2009.	1854

Section 4. The amendment of section 5739.035 of the Revised	1855
Code is not intended to supersede the earlier repeal, with delayed	1856
effective date, of that section.	1857