As Introduced

130th General Assembly Regular Session 2013-2014

S. B. No. 243

Senator Bacon 

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A BILL

To amend sections 5739.02 and 5739.05 of the Revised

1

Code to provide a three-day sales tax "holiday"

2

each August during which sales of back-to-school

3

clothing, school supplies, personal computers, and

4

personal computer accessories are exempt from

5

sales and use taxes.

6

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

Section 1.  That sections 5739.02 and 5739.05 of the Revised	7
Code be amended to read as follows:	8

Sec. 5739.02.  For the purpose of providing revenue with	9
which to meet the needs of the state, for the use of the general	10
revenue fund of the state, for the purpose of securing a thorough	11
and efficient system of common schools throughout the state, for	12
the purpose of affording revenues, in addition to those from	13
general property taxes, permitted under constitutional	14
limitations, and from other sources, for the support of local	15
governmental functions, and for the purpose of reimbursing the	16
state for the expense of administering this chapter, an excise tax	17
is hereby levied on each retail sale made in this state.	18

(A)(1) The tax shall be collected as provided in section	19
5739.025 of the Revised Code. The rate of the tax shall be five	20
and three-fourths per cent. The tax applies and is collectible	21
when the sale is made, regardless of the time when the price is	22
paid or delivered.	23

(2) In the case of the lease or rental, with a fixed term of	24
more than thirty days or an indefinite term with a minimum period	25
of more than thirty days, of any motor vehicles designed by the	26
manufacturer to carry a load of not more than one ton, watercraft,	27
outboard motor, or aircraft, or of any tangible personal property,	28
other than motor vehicles designed by the manufacturer to carry a	29
load of more than one ton, to be used by the lessee or renter	30
primarily for business purposes, the tax shall be collected by the	31
vendor at the time the lease or rental is consummated and shall be	32
calculated by the vendor on the basis of the total amount to be	33
paid by the lessee or renter under the lease agreement. If the	34
total amount of the consideration for the lease or rental includes	35
amounts that are not calculated at the time the lease or rental is	36
executed, the tax shall be calculated and collected by the vendor	37
at the time such amounts are billed to the lessee or renter. In	38
the case of an open-end lease or rental, the tax shall be	39
calculated by the vendor on the basis of the total amount to be	40
paid during the initial fixed term of the lease or rental, and for	41
each subsequent renewal period as it comes due. As used in this	42
division, "motor vehicle" has the same meaning as in section	43
4501.01 of the Revised Code, and "watercraft" includes an outdrive	44
unit attached to the watercraft.	45

A lease with a renewal clause and a termination penalty or	46
similar provision that applies if the renewal clause is not	47
exercised is presumed to be a sham transaction. In such a case,	48
the tax shall be calculated and paid on the basis of the entire	49
length of the lease period, including any renewal periods, until	50
the termination penalty or similar provision no longer applies.	51
The taxpayer shall bear the burden, by a preponderance of the	52
evidence, that the transaction or series of transactions is not a	53
sham transaction.	54

(3) Except as provided in division (A)(2) of this section, in	55
the case of a sale, the price of which consists in whole or in	56
part of the lease or rental of tangible personal property, the tax	57
shall be measured by the installments of that lease or rental.	58

(4) In the case of a sale of a physical fitness facility	59
service or recreation and sports club service, the price of which	60
consists in whole or in part of a membership for the receipt of	61
the benefit of the service, the tax applicable to the sale shall	62
be measured by the installments thereof.	63

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

64

(1) Sales to the state or any of its political subdivisions,	65
or to any other state or its political subdivisions if the laws of	66
that state exempt from taxation sales made to this state and its	67
political subdivisions;	68

(2) Sales of food for human consumption off the premises	69
where sold;	70

(3) Sales of food sold to students only in a cafeteria,	71
dormitory, fraternity, or sorority maintained in a private,	72
public, or parochial school, college, or university;	73

(4) Sales of newspapers and sales or transfers of magazines	74
distributed as controlled circulation publications;	75

(5) The furnishing, preparing, or serving of meals without	76
charge by an employer to an employee provided the employer records	77
the meals as part compensation for services performed or work	78
done;	79

(6) Sales of motor fuel upon receipt, use, distribution, or	80
sale of which in this state a tax is imposed by the law of this	81
state, but this exemption shall not apply to the sale of motor	82
fuel on which a refund of the tax is allowable under division (A)	83
of section 5735.14 of the Revised Code; and the tax commissioner	84
may deduct the amount of tax levied by this section applicable to	85
the price of motor fuel when granting a refund of motor fuel tax	86
pursuant to division (A) of section 5735.14 of the Revised Code	87
and shall cause the amount deducted to be paid into the general	88
revenue fund of this state;	89

(7) Sales of natural gas by a natural gas company, of water	90
by a water-works company, or of steam by a heating company, if in	91
each case the thing sold is delivered to consumers through pipes	92
or conduits, and all sales of communications services by a	93
telegraph company, all terms as defined in section 5727.01 of the	94
Revised Code, and sales of electricity delivered through wires;	95

(8) Casual sales by a person, or auctioneer employed directly	96
by the person to conduct such sales, except as to such sales of	97
motor vehicles, watercraft or outboard motors required to be	98
titled under section 1548.06 of the Revised Code, watercraft	99
documented with the United States coast guard, snowmobiles, and	100
all-purpose vehicles as defined in section 4519.01 of the Revised	101
Code;	102

(9)(a) Sales of services or tangible personal property, other	103
than motor vehicles, mobile homes, and manufactured homes, by	104
churches, organizations exempt from taxation under section	105
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit	106
organizations operated exclusively for charitable purposes as	107
defined in division (B)(12) of this section, provided that the	108
number of days on which such tangible personal property or	109
services, other than items never subject to the tax, are sold does	110
not exceed six in any calendar year, except as otherwise provided	111
in division (B)(9)(b) of this section. If the number of days on	112
which such sales are made exceeds six in any calendar year, the	113
church or organization shall be considered to be engaged in	114
business and all subsequent sales by it shall be subject to the	115
tax. In counting the number of days, all sales by groups within a	116
church or within an organization shall be considered to be sales	117
of that church or organization.	118

(b) The limitation on the number of days on which tax-exempt	119
sales may be made by a church or organization under division	120
(B)(9)(a) of this section does not apply to sales made by student	121
clubs and other groups of students of a primary or secondary	122
school, or a parent-teacher association, booster group, or similar	123
organization that raises money to support or fund curricular or	124
extracurricular activities of a primary or secondary school.	125

(c) Divisions (B)(9)(a) and (b) of this section do not apply	126
to sales by a noncommercial educational radio or television	127
broadcasting station.	128

(10) Sales not within the taxing power of this state under	129
the Constitution or laws of the United States or the Constitution	130
of this state;	131

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

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

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

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

(13) Building and construction materials and services sold to	178
construction contractors for incorporation into a structure or	179
improvement to real property under a construction contract with	180
this state or a political subdivision of this state, or with the	181
United States government or any of its agencies; building and	182
construction materials and services sold to construction	183
contractors for incorporation into a structure or improvement to	184
real property that are accepted for ownership by this state or any	185
of its political subdivisions, or by the United States government	186
or any of its agencies at the time of completion of the structures	187
or improvements; building and construction materials sold to	188
construction contractors for incorporation into a horticulture	189
structure or livestock structure for a person engaged in the	190
business of horticulture or producing livestock; building	191
materials and services sold to a construction contractor for	192
incorporation into a house of public worship or religious	193
education, or a building used exclusively for charitable purposes	194
under a construction contract with an organization whose purpose	195
is as described in division (B)(12) of this section; building	196
materials and services sold to a construction contractor for	197
incorporation into a building under a construction contract with	198
an organization exempt from taxation under section 501(c)(3) of	199
the Internal Revenue Code of 1986 when the building is to be used	200
exclusively for the organization's exempt purposes; building and	201
construction materials sold for incorporation into the original	202
construction of a sports facility under section 307.696 of the	203
Revised Code; building and construction materials and services	204
sold to a construction contractor for incorporation into real	205
property outside this state if such materials and services, when	206
sold to a construction contractor in the state in which the real	207
property is located for incorporation into real property in that	208
state, would be exempt from a tax on sales levied by that state;	209
and, until one calendar year after the construction of a	210
convention center that qualifies for property tax exemption under	211
section 5709.084 of the Revised Code is completed, building and	212
construction materials and services sold to a construction	213
contractor for incorporation into the real property comprising	214
that convention center;	215

(14) Sales of ships or vessels or rail rolling stock used or	216
to be used principally in interstate or foreign commerce, and	217
repairs, alterations, fuel, and lubricants for such ships or	218
vessels or rail rolling stock;	219

(15) Sales to persons primarily engaged in any of the	220
activities mentioned in division (B)(42)(a), (g), or (h) of this	221
section, to persons engaged in making retail sales, or to persons	222
who purchase for sale from a manufacturer tangible personal	223
property that was produced by the manufacturer in accordance with	224
specific designs provided by the purchaser, of packages, including	225
material, labels, and parts for packages, and of machinery,	226
equipment, and material for use primarily in packaging tangible	227
personal property produced for sale, including any machinery,	228
equipment, and supplies used to make labels or packages, to	229
prepare packages or products for labeling, or to label packages or	230
products, by or on the order of the person doing the packaging, or	231
sold at retail. "Packages" includes bags, baskets, cartons,	232
crates, boxes, cans, bottles, bindings, wrappings, and other	233
similar devices and containers, but does not include motor	234
vehicles or bulk tanks, trailers, or similar devices attached to	235
motor vehicles. "Packaging" means placing in a package. Division	236
(B)(15) of this section does not apply to persons engaged in	237
highway transportation for hire.	238

(16) Sales of food to persons using supplemental nutrition	239
assistance program benefits to purchase the food. As used in this	240
division, "food" has the same meaning as in 7 U.S.C. 2012 and	241
federal regulations adopted pursuant to the Food and Nutrition Act	242
of 2008.	243

(17) Sales to persons engaged in farming, agriculture,	244
horticulture, or floriculture, of tangible personal property for	245
use or consumption primarily in the production by farming,	246
agriculture, horticulture, or floriculture of other tangible	247
personal property for use or consumption primarily in the	248
production of tangible personal property for sale by farming,	249
agriculture, horticulture, or floriculture; or material and parts	250
for incorporation into any such tangible personal property for use	251
or consumption in production; and of tangible personal property	252
for such use or consumption in the conditioning or holding of	253
products produced by and for such use, consumption, or sale by	254
persons engaged in farming, agriculture, horticulture, or	255
floriculture, except where such property is incorporated into real	256
property;	257

(18) Sales of drugs for a human being that may be dispensed	258
only pursuant to a prescription; insulin as recognized in the	259
official United States pharmacopoeia; urine and blood testing	260
materials when used by diabetics or persons with hypoglycemia to	261
test for glucose or acetone; hypodermic syringes and needles when	262
used by diabetics for insulin injections; epoetin alfa when	263
purchased for use in the treatment of persons with medical	264
disease; hospital beds when purchased by hospitals, nursing homes,	265
or other medical facilities; and medical oxygen and medical	266
oxygen-dispensing equipment when purchased by hospitals, nursing	267
homes, or other medical facilities;	268

(19) Sales of prosthetic devices, durable medical equipment	269
for home use, or mobility enhancing equipment, when made pursuant	270
to a prescription and when such devices or equipment are for use	271
by a human being.	272

(20) Sales of emergency and fire protection vehicles and	273
equipment to nonprofit organizations for use solely in providing	274
fire protection and emergency services, including trauma care and	275
emergency medical services, for political subdivisions of the	276
state;	277

(21) Sales of tangible personal property manufactured in this	278
state, if sold by the manufacturer in this state to a retailer for	279
use in the retail business of the retailer outside of this state	280
and if possession is taken from the manufacturer by the purchaser	281
within this state for the sole purpose of immediately removing the	282
same from this state in a vehicle owned by the purchaser;	283

(22) Sales of services provided by the state or any of its	284
political subdivisions, agencies, instrumentalities, institutions,	285
or authorities, or by governmental entities of the state or any of	286
its political subdivisions, agencies, instrumentalities,	287
institutions, or authorities;	288

(23) Sales of motor vehicles to nonresidents of this state	289
under the circumstances described in division (B) of section	290
5739.029 of the Revised Code;	291

(24) Sales to persons engaged in the preparation of eggs for	292
sale of tangible personal property used or consumed directly in	293
such preparation, including such tangible personal property used	294
for cleaning, sanitizing, preserving, grading, sorting, and	295
classifying by size; packages, including material and parts for	296
packages, and machinery, equipment, and material for use in	297
packaging eggs for sale; and handling and transportation equipment	298
and parts therefor, except motor vehicles licensed to operate on	299
public highways, used in intraplant or interplant transfers or	300
shipment of eggs in the process of preparation for sale, when the	301
plant or plants within or between which such transfers or	302
shipments occur are operated by the same person. "Packages"	303
includes containers, cases, baskets, flats, fillers, filler flats,	304
cartons, closure materials, labels, and labeling materials, and	305
"packaging" means placing therein.	306

(25)(a) Sales of water to a consumer for residential use;

307

(b) Sales of water by a nonprofit corporation engaged	308
exclusively in the treatment, distribution, and sale of water to	309
consumers, if such water is delivered to consumers through pipes	310
or tubing.	311

(26) Fees charged for inspection or reinspection of motor	312
vehicles under section 3704.14 of the Revised Code;	313

(27) Sales to persons licensed to conduct a food service	314
operation pursuant to section 3717.43 of the Revised Code, of	315
tangible personal property primarily used directly for the	316
following:	317

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

318

(b) To preserve food that has been or will be prepared for	319
human consumption for sale by the food service operator, not	320
including tangible personal property used to display food for	321
selection by the consumer;	322

(c) To clean tangible personal property used to prepare or	323
serve food for human consumption for sale.	324

(28) Sales of animals by nonprofit animal adoption services	325
or county humane societies;	326

(29) Sales of services to a corporation described in division	327
(A) of section 5709.72 of the Revised Code, and sales of tangible	328
personal property that qualifies for exemption from taxation under	329
section 5709.72 of the Revised Code;	330

(30) Sales and installation of agricultural land tile, as	331
defined in division (B)(5)(a) of section 5739.01 of the Revised	332
Code;	333

(31) Sales and erection or installation of portable grain	334
bins, as defined in division (B)(5)(b) of section 5739.01 of the	335
Revised Code;	336

(32) The sale, lease, repair, and maintenance of, parts for,	337
or items attached to or incorporated in, motor vehicles that are	338
primarily used for transporting tangible personal property	339
belonging to others by a person engaged in highway transportation	340
for hire, except for packages and packaging used for the	341
transportation of tangible personal property;	342

(33) Sales to the state headquarters of any veterans'	343
organization in this state that is either incorporated and issued	344
a charter by the congress of the United States or is recognized by	345
the United States veterans administration, for use by the	346
headquarters;	347

(34) Sales to a telecommunications service vendor, mobile	348
telecommunications service vendor, or satellite broadcasting	349
service vendor of tangible personal property and services used	350
directly and primarily in transmitting, receiving, switching, or	351
recording any interactive, one- or two-way electromagnetic	352
communications, including voice, image, data, and information,	353
through the use of any medium, including, but not limited to,	354
poles, wires, cables, switching equipment, computers, and record	355
storage devices and media, and component parts for the tangible	356
personal property. The exemption provided in this division shall	357
be in lieu of all other exemptions under division (B)(42)(a) or	358
(n) of this section to which the vendor may otherwise be entitled,	359
based upon the use of the thing purchased in providing the	360
telecommunications, mobile telecommunications, or satellite	361
broadcasting service.	362

(35)(a) Sales where the purpose of the consumer is to use or	363
consume the things transferred in making retail sales and	364
consisting of newspaper inserts, catalogues, coupons, flyers, gift	365
certificates, or other advertising material that prices and	366
describes tangible personal property offered for retail sale.	367

(b) Sales to direct marketing vendors of preliminary	368
materials such as photographs, artwork, and typesetting that will	369
be used in printing advertising material; and of printed matter	370
that offers free merchandise or chances to win sweepstake prizes	371
and that is mailed to potential customers with advertising	372
material described in division (B)(35)(a) of this section;	373

(c) Sales of equipment such as telephones, computers,	374
facsimile machines, and similar tangible personal property	375
primarily used to accept orders for direct marketing retail sales.	376

(d) Sales of automatic food vending machines that preserve	377
food with a shelf life of forty-five days or less by refrigeration	378
and dispense it to the consumer.	379

For purposes of division (B)(35) of this section, "direct	380
marketing" means the method of selling where consumers order	381
tangible personal property by United States mail, delivery	382
service, or telecommunication and the vendor delivers or ships the	383
tangible personal property sold to the consumer from a warehouse,	384
catalogue distribution center, or similar fulfillment facility by	385
means of the United States mail, delivery service, or common	386
carrier.	387

(36) Sales to a person engaged in the business of	388
horticulture or producing livestock of materials to be	389
incorporated into a horticulture structure or livestock structure;	390

(37) Sales of personal computers, computer monitors, computer	391
keyboards, modems, and other peripheral computer equipment to an	392
individual who is licensed or certified to teach in an elementary	393
or a secondary school in this state for use by that individual in	394
preparation for teaching elementary or secondary school students;	395

(38) Sales to a professional racing team of any of the	396
following:	397

(a) Motor racing vehicles;

398

(b) Repair services for motor racing vehicles;

399

(c) Items of property that are attached to or incorporated in	400
motor racing vehicles, including engines, chassis, and all other	401
components of the vehicles, and all spare, replacement, and	402
rebuilt parts or components of the vehicles; except not including	403
tires, consumable fluids, paint, and accessories consisting of	404
instrumentation sensors and related items added to the vehicle to	405
collect and transmit data by means of telemetry and other forms of	406
communication.	407

(39) Sales of used manufactured homes and used mobile homes,	408
as defined in section 5739.0210 of the Revised Code, made on or	409
after January 1, 2000;	410

(40) Sales of tangible personal property and services to a	411
provider of electricity used or consumed directly and primarily in	412
generating, transmitting, or distributing electricity for use by	413
others, including property that is or is to be incorporated into	414
and will become a part of the consumer's production, transmission,	415
or distribution system and that retains its classification as	416
tangible personal property after incorporation; fuel or power used	417
in the production, transmission, or distribution of electricity;	418
energy conversion equipment as defined in section 5727.01 of the	419
Revised Code; and tangible personal property and services used in	420
the repair and maintenance of the production, transmission, or	421
distribution system, including only those motor vehicles as are	422
specially designed and equipped for such use. The exemption	423
provided in this division shall be in lieu of all other exemptions	424
in division (B)(42)(a) or (n) of this section to which a provider	425
of electricity may otherwise be entitled based on the use of the	426
tangible personal property or service purchased in generating,	427
transmitting, or distributing electricity.	428

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

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

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

(b) To hold the thing transferred as security for the	452
performance of an obligation of the vendor;	453

(c) To resell, hold, use, or consume the thing transferred as	454
evidence of a contract of insurance;	455

(d) To use or consume the thing directly in commercial	456
fishing;	457

(e) To incorporate the thing transferred as a material or a	458
part into, or to use or consume the thing transferred directly in	459
the production of, magazines distributed as controlled circulation	460
publications;	461

(f) To use or consume the thing transferred in the production	462
and preparation in suitable condition for market and sale of	463
printed, imprinted, overprinted, lithographic, multilithic,	464
blueprinted, photostatic, or other productions or reproductions of	465
written or graphic matter;	466

(g) To use the thing transferred, as described in section	467
5739.011 of the Revised Code, primarily in a manufacturing	468
operation to produce tangible personal property for sale;	469

(h) To use the benefit of a warranty, maintenance or service	470
contract, or similar agreement, as described in division (B)(7) of	471
section 5739.01 of the Revised Code, to repair or maintain	472
tangible personal property, if all of the property that is the	473
subject of the warranty, contract, or agreement would not be	474
subject to the tax imposed by this section;	475

(i) To use the thing transferred as qualified research and	476
development equipment;	477

(j) To use or consume the thing transferred primarily in	478
storing, transporting, mailing, or otherwise handling purchased	479
sales inventory in a warehouse, distribution center, or similar	480
facility when the inventory is primarily distributed outside this	481
state to retail stores of the person who owns or controls the	482
warehouse, distribution center, or similar facility, to retail	483
stores of an affiliated group of which that person is a member, or	484
by means of direct marketing. This division does not apply to	485
motor vehicles registered for operation on the public highways. As	486
used in this division, "affiliated group" has the same meaning as	487
in division (B)(3)(e) of section 5739.01 of the Revised Code and	488
"direct marketing" has the same meaning as in division (B)(35) of	489
this section.	490

(k) To use or consume the thing transferred to fulfill a	491
contractual obligation incurred by a warrantor pursuant to a	492
warranty provided as a part of the price of the tangible personal	493
property sold or by a vendor of a warranty, maintenance or service	494
contract, or similar agreement the provision of which is defined	495
as a sale under division (B)(7) of section 5739.01 of the Revised	496
Code;	497

(l) To use or consume the thing transferred in the production	498
of a newspaper for distribution to the public;	499

(m) To use tangible personal property to perform a service	500
listed in division (B)(3) of section 5739.01 of the Revised Code,	501
if the property is or is to be permanently transferred to the	502
consumer of the service as an integral part of the performance of	503
the service;	504

(n) To use or consume the thing transferred primarily in	505
producing tangible personal property for sale by farming,	506
agriculture, horticulture, or floriculture. Persons engaged in	507
rendering farming, agriculture, horticulture, or floriculture	508
services for others are deemed engaged primarily in farming,	509
agriculture, horticulture, or floriculture. This paragraph does	510
not exempt from "retail sale" or "sales at retail" the sale of	511
tangible personal property that is to be incorporated into a	512
structure or improvement to real property.	513

(o) To use or consume the thing transferred in acquiring,	514
formatting, editing, storing, and disseminating data or	515
information by electronic publishing.	516

As used in division (B)(42) of this section, "thing" includes	517
all transactions included in divisions (B)(3)(a), (b), and (e) of	518
section 5739.01 of the Revised Code.	519

(43) Sales conducted through a coin operated device that	520
activates vacuum equipment or equipment that dispenses water,	521
whether or not in combination with soap or other cleaning agents	522
or wax, to the consumer for the consumer's use on the premises in	523
washing, cleaning, or waxing a motor vehicle, provided no other	524
personal property or personal service is provided as part of the	525
transaction.	526

(44) Sales of replacement and modification parts for engines,	527
airframes, instruments, and interiors in, and paint for, aircraft	528
used primarily in a fractional aircraft ownership program, and	529
sales of services for the repair, modification, and maintenance of	530
such aircraft, and machinery, equipment, and supplies primarily	531
used to provide those services.	532

(45) Sales of telecommunications service that is used	533
directly and primarily to perform the functions of a call center.	534
As used in this division, "call center" means any physical	535
location where telephone calls are placed or received in high	536
volume for the purpose of making sales, marketing, customer	537
service, technical support, or other specialized business	538
activity, and that employs at least fifty individuals that engage	539
in call center activities on a full-time basis, or sufficient	540
individuals to fill fifty full-time equivalent positions.	541

(46) Sales by a telecommunications service vendor of 900	542
service to a subscriber. This division does not apply to	543
information services, as defined in division (FF) of section	544
5739.01 of the Revised Code.	545

(47) Sales of value-added non-voice data service. This	546
division does not apply to any similar service that is not	547
otherwise a telecommunications service.	548

(48)(a) Sales of machinery, equipment, and software to a	549
qualified direct selling entity for use in a warehouse or	550
distribution center primarily for storing, transporting, or	551
otherwise handling inventory that is held for sale to independent	552
salespersons who operate as direct sellers and that is held	553
primarily for distribution outside this state;	554

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

555

(i) "Direct seller" means a person selling consumer products	556
to individuals for personal or household use and not from a fixed	557
retail location, including selling such product at in-home product	558
demonstrations, parties, and other one-on-one selling.	559

(ii) "Qualified direct selling entity" means an entity	560
selling to direct sellers at the time the entity enters into a tax	561
credit agreement with the tax credit authority pursuant to section	562
122.17 of the Revised Code, provided that the agreement was	563
entered into on or after January 1, 2007. Neither contingencies	564
relevant to the granting of, nor later developments with respect	565
to, the tax credit shall impair the status of the qualified direct	566
selling entity under division (B)(48) of this section after	567
execution of the tax credit agreement by the tax credit authority.	568

(c) Division (B)(48) of this section is limited to machinery,	569
equipment, and software first stored, used, or consumed in this	570
state within the period commencing June 24, 2008, and ending on	571
the date that is five years after that date.	572

(49) Sales of materials, parts, equipment, or engines used in	573
the repair or maintenance of aircraft or avionics systems of such	574
aircraft, and sales of repair, remodeling, replacement, or	575
maintenance services in this state performed on aircraft or on an	576
aircraft's avionics, engine, or component materials or parts. As	577
used in division (B)(49) of this section, "aircraft" means	578
aircraft of more than six thousand pounds maximum certified	579
takeoff weight or used exclusively in general aviation.	580

(50) Sales of full flight simulators that are used for pilot	581
or flight-crew training, sales of repair or replacement parts or	582
components, and sales of repair or maintenance services for such	583
full flight simulators. "Full flight simulator" means a replica of	584
a specific type, or make, model, and series of aircraft cockpit.	585
It includes the assemblage of equipment and computer programs	586
necessary to represent aircraft operations in ground and flight	587
conditions, a visual system providing an out-of-the-cockpit view,	588
and a system that provides cues at least equivalent to those of a	589
three-degree-of-freedom motion system, and has the full range of	590
capabilities of the systems installed in the device as described	591
in appendices A and B of part 60 of chapter 1 of title 14 of the	592
Code of Federal Regulations.	593

(51) Any transfer or lease of tangible personal property	594
between the state and JobsOhio in accordance with section 4313.02	595
of the Revised Code.	596

(52)(a) Sales to a qualifying corporation.

597

(b) As used in division (B)(52) of this section:

598

(i) "Qualifying corporation" means a nonprofit corporation	599
organized in this state that leases from an eligible county land,	600
buildings, structures, fixtures, and improvements to the land that	601
are part of or used in a public recreational facility used by a	602
major league professional athletic team or a class A to class AAA	603
minor league affiliate of a major league professional athletic	604
team for a significant portion of the team's home schedule,	605
provided the following apply:	606

(I) The facility is leased from the eligible county pursuant	607
to a lease that requires substantially all of the revenue from the	608
operation of the business or activity conducted by the nonprofit	609
corporation at the facility in excess of operating costs, capital	610
expenditures, and reserves to be paid to the eligible county at	611
least once per calendar year.	612

(II) Upon dissolution and liquidation of the nonprofit	613
corporation, all of its net assets are distributable to the board	614
of commissioners of the eligible county from which the corporation	615
leases the facility.	616

(ii) "Eligible county" has the same meaning as in section	617
307.695 of the Revised Code.	618

(53) Sales to or by a cable service provider, video service	619
provider, or radio or television broadcast station regulated by	620
the federal government of cable service or programming, video	621
service or programming, audio service or programming, or	622
electronically transferred digital audiovisual or audio work. As	623
used in division (B)(53) of this section, "cable service" and	624
"cable service provider" have the same meanings as in section	625
1332.01 of the Revised Code, and "video service," "video service	626
provider," and "video programming" have the same meanings as in	627
section 1332.21 of the Revised Code.	628

(54)(a) Sales of the following occurring on the first Friday	629
of August and the following Saturday and Sunday of each year:	630

(i) An item of clothing, the price of which is one hundred	631
dollars or less;	632

(ii) An item of school supplies, the price of which is twenty	633
dollars or less;	634

(iii) A personal computer purchased for noncommercial home or	635
personal use, the price of which, less any manufacturer's rebate,	636
is seven hundred fifty dollars or less;	637

(iv) A personal computer accessory purchased for	638
noncommercial home or personal use, the price of which, less any	639
manufacturer's rebate, is seven hundred fifty dollars or less.	640

(b) As used in division (B)(54) of this section:

641

(i) "Clothing" does not include clothing accessories or	642
equipment, protective equipment, sports or recreational equipment,	643
clothing that is rented, or clothing that is used in a trade or	644
business.	645

(ii) "School supplies" means pens, pencils, binders,	646
notebooks, reference books, book bags, lunch boxes, calculators,	647
and similar items. "School supplies" does not include furniture,	648
items that are rented, or taxable personal property for use in a	649
trade or business.	650

(iii) "Personal computer" means an electronic device that	651
accepts information in digital or similar form and manipulates	652
such information for a result based on a sequence of instructions.	653
"Personal computer" includes any electronic book reader, laptop,	654
desktop, handheld, tablet, or tower computer but does not include	655
cellular telephones, video game consoles, digital media receivers,	656
or devices that are not primarily designed to process data.	657

(iv) "Accessory" means a keyboard, mouse, personal digital	658
assistant, monitor, peripheral device, modem, router, and	659
nonrecreational software, regardless of whether the accessory is	660
used in association with a personal computer base unit.	661
"Accessory" does not include furniture or any system, device,	662
software, or peripheral device that is designed or intended	663
primarily for recreational use.	664

(v) "Monitor" does not include a device that includes a	665
television tuner.	666

(C) For the purpose of the proper administration of this	667
chapter, and to prevent the evasion of the tax, it is presumed	668
that all sales made in this state are subject to the tax until the	669
contrary is established.	670

(D) The levy of this tax on retail sales of recreation and	671
sports club service shall not prevent a municipal corporation from	672
levying any tax on recreation and sports club dues or on any	673
income generated by recreation and sports club dues.	674

(E) The tax collected by the vendor from the consumer under	675
this chapter is not part of the price, but is a tax collection for	676
the benefit of the state, and of counties levying an additional	677
sales tax pursuant to section 5739.021 or 5739.026 of the Revised	678
Code and of transit authorities levying an additional sales tax	679
pursuant to section 5739.023 of the Revised Code. Except for the	680
discount authorized under section 5739.12 of the Revised Code and	681
the effects of any rounding pursuant to section 5703.055 of the	682
Revised Code, no person other than the state or such a county or	683
transit authority shall derive any benefit from the collection or	684
payment of the tax levied by this section or section 5739.021,	685
5739.023, or 5739.026 of the Revised Code.	686

Sec. 5739.05.  (A)(1) The tax commissioner shall enforce and	687
administer sections 5739.01 to 5739.31 of the Revised Code, which	688
are hereby declared to be sections whichthat the commissioner is	689
required to administer within the meaning of sections 5703.17 to	690
5703.37, 5703.39, 5703.41, and 5703.45 of the Revised Code. The	691
commissioner may adopt and promulgate, in accordance with sections	692
119.01 to 119.13 of the Revised Code, such rules as the	693
commissioner deems necessary to administer sections 5739.01 to	694
5739.31 of the Revised Code.	695

(2) The commissioner, in accordance with section 5703.14 of	696
the Revised Code, shall adopt rules necessary to implement the	697
three-day tax exemption periods provided by division (B)(51) of	698
section 5739.02 of the Revised Code. Before each exemption period	699
required under that division, the commissioner shall make	700
available to vendors informational bulletins explaining the	701
exemption.	702

(B) Upon application, the commissioner may authorize a vendor	703
to pay on a predetermined basis the tax levied by or pursuant to	704
section 5739.02, 5739.021, 5739.023, or 5739.026 of the Revised	705
Code upon sales of things produced or distributed or services	706
provided by such vendor, and the commissioner may waive the	707
collection of the tax from the consumer. The commissioner shall	708
not grant such authority unless the commissioner finds that the	709
granting of the authority would improve compliance and increase	710
the efficiency of the administration of the tax. The person to	711
whom such authority is granted shall post a notice, if required by	712
the commissioner, at the location where the product is offered for	713
sale, that the tax is included in the selling price. The	714
comissionercommissioner may adopt rules to administer this	715
division.	716

(C) The commissioner may authorize a vendor to pay, on the	717
basis of a prearranged agreement under this division, the tax	718
levied by section 5739.02 or pursuant to section 5739.021,	719
5739.023, or 5739.026 of the Revised Code, and waive the	720
requirement that the vendor maintain the complete and accurate	721
record of individual taxable sales and tax collected thereon	722
required by section 5739.11 of the Revised Code, upon application	723
of the vendor, if the commissioner finds that the conditions of	724
the vendor-applicant's business are such that the maintenance of	725
such records of individual taxable sales and tax collected thereon	726
would impose an unreasonable burden upon the vendor. If the	727
commissioner determines that such unreasonable burden has been	728
imposed, the vendor and the commissioner shall agree to the terms	729
and conditions of a test check to be conducted. If the parties are	730
unable to agree to the terms and conditions of the test check, the	731
application shall be denied. The test check conducted shall	732
determine the proportion that taxable retail sales bear to all of	733
the vendor's retail sales and the ratio which the tax required to	734
be collected under sections 5739.02, 5739.021, and 5739.023 of the	735
Revised Code bears to the receipts from the vendor's taxable	736
retail sales.	737

The vendor shall collect the tax on the vendor's taxable	738
sales and the vendor's liability for collecting or remitting shall	739
be based upon the proportions and ratios established by the test	740
check, and not upon any other basis of determination, until such	741
time as a subsequent test check is made at the request of either	742
the vendor or the commissioner where either party believes that	743
the nature of the vendor's business has so changed as to make the	744
prior or existing test check no longer representative. The	745
commissioner may give notice to the vendor at any time that the	746
authorization is revoked or the vendor may notify the commissioner	747
that the vendor no longer elects to report under the	748
authorization. Such notice shall be delivered to the other party	749
personally or by registered mail. The revocation or cancellation	750
is not effective prior to the date of receipt of such notice.	751

Section 2.  That existing sections 5739.02 and 5739.05 of the	752
Revised Code are hereby repealed.	753

Section 3.  Section 5739.02 of the Revised Code is presented	754
in this act as a composite of the section as amended by both Am.	755
Sub. H.B. 51 and Am. Sub. H.B. 59 of the 130th General Assembly.	756
The General Assembly, applying the principle stated in division	757
(B) of section 1.52 of the Revised Code that amendments are to be	758
harmonized if reasonably capable of simultaneous operation, finds	759
that the composite is the resulting version of the section in	760
effect prior to the effective date of the section as presented in	761
this act.	762