As Introduced

130th General Assembly Regular Session 2013-2014

S. B. No. 303

Senator Brown 

Cosponsors: Senators Cafaro, Kearney, Sawyer, Smith, Turner 

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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 April during which sales of qualifying Energy

3

Star products are exempt from sales and use taxes.

4

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

Section 1. That sections 5739.02 and 5739.05 of the Revised	5
Code be amended to read as follows:	6

Sec. 5739.02.  For the purpose of providing revenue with	7
which to meet the needs of the state, for the use of the general	8
revenue fund of the state, for the purpose of securing a thorough	9
and efficient system of common schools throughout the state, for	10
the purpose of affording revenues, in addition to those from	11
general property taxes, permitted under constitutional	12
limitations, and from other sources, for the support of local	13
governmental functions, and for the purpose of reimbursing the	14
state for the expense of administering this chapter, an excise tax	15
is hereby levied on each retail sale made in this state.	16

(A)(1) The tax shall be collected as provided in section	17
5739.025 of the Revised Code. The rate of the tax shall be five	18
and three-fourths per cent. The tax applies and is collectible	19
when the sale is made, regardless of the time when the price is	20
paid or delivered.	21

(2) In the case of the lease or rental, with a fixed term of	22
more than thirty days or an indefinite term with a minimum period	23
of more than thirty days, of any motor vehicles designed by the	24
manufacturer to carry a load of not more than one ton, watercraft,	25
outboard motor, or aircraft, or of any tangible personal property,	26
other than motor vehicles designed by the manufacturer to carry a	27
load of more than one ton, to be used by the lessee or renter	28
primarily for business purposes, the tax shall be collected by the	29
vendor at the time the lease or rental is consummated and shall be	30
calculated by the vendor on the basis of the total amount to be	31
paid by the lessee or renter under the lease agreement. If the	32
total amount of the consideration for the lease or rental includes	33
amounts that are not calculated at the time the lease or rental is	34
executed, the tax shall be calculated and collected by the vendor	35
at the time such amounts are billed to the lessee or renter. In	36
the case of an open-end lease or rental, the tax shall be	37
calculated by the vendor on the basis of the total amount to be	38
paid during the initial fixed term of the lease or rental, and for	39
each subsequent renewal period as it comes due. As used in this	40
division, "motor vehicle" has the same meaning as in section	41
4501.01 of the Revised Code, and "watercraft" includes an outdrive	42
unit attached to the watercraft.	43

A lease with a renewal clause and a termination penalty or	44
similar provision that applies if the renewal clause is not	45
exercised is presumed to be a sham transaction. In such a case,	46
the tax shall be calculated and paid on the basis of the entire	47
length of the lease period, including any renewal periods, until	48
the termination penalty or similar provision no longer applies.	49
The taxpayer shall bear the burden, by a preponderance of the	50
evidence, that the transaction or series of transactions is not a	51
sham transaction.	52

(3) Except as provided in division (A)(2) of this section, in	53
the case of a sale, the price of which consists in whole or in	54
part of the lease or rental of tangible personal property, the tax	55
shall be measured by the installments of that lease or rental.	56

(4) In the case of a sale of a physical fitness facility	57
service or recreation and sports club service, the price of which	58
consists in whole or in part of a membership for the receipt of	59
the benefit of the service, the tax applicable to the sale shall	60
be measured by the installments thereof.	61

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

62

(1) Sales to the state or any of its political subdivisions,	63
or to any other state or its political subdivisions if the laws of	64
that state exempt from taxation sales made to this state and its	65
political subdivisions;	66

(2) Sales of food for human consumption off the premises	67
where sold;	68

(3) Sales of food sold to students only in a cafeteria,	69
dormitory, fraternity, or sorority maintained in a private,	70
public, or parochial school, college, or university;	71

(4) Sales of newspapers and sales or transfers of magazines	72
distributed as controlled circulation publications;	73

(5) The furnishing, preparing, or serving of meals without	74
charge by an employer to an employee provided the employer records	75
the meals as part compensation for services performed or work	76
done;	77

(6) Sales of motor fuel upon receipt, use, distribution, or	78
sale of which in this state a tax is imposed by the law of this	79
state, but this exemption shall not apply to the sale of motor	80
fuel on which a refund of the tax is allowable under division (A)	81
of section 5735.14 of the Revised Code; and the tax commissioner	82
may deduct the amount of tax levied by this section applicable to	83
the price of motor fuel when granting a refund of motor fuel tax	84
pursuant to division (A) of section 5735.14 of the Revised Code	85
and shall cause the amount deducted to be paid into the general	86
revenue fund of this state;	87

(7) Sales of natural gas by a natural gas company, of water	88
by a water-works company, or of steam by a heating company, if in	89
each case the thing sold is delivered to consumers through pipes	90
or conduits, and all sales of communications services by a	91
telegraph company, all terms as defined in section 5727.01 of the	92
Revised Code, and sales of electricity delivered through wires;	93

(8) Casual sales by a person, or auctioneer employed directly	94
by the person to conduct such sales, except as to such sales of	95
motor vehicles, watercraft or outboard motors required to be	96
titled under section 1548.06 of the Revised Code, watercraft	97
documented with the United States coast guard, snowmobiles, and	98
all-purpose vehicles as defined in section 4519.01 of the Revised	99
Code;	100

(9)(a) Sales of services or tangible personal property, other	101
than motor vehicles, mobile homes, and manufactured homes, by	102
churches, organizations exempt from taxation under section	103
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit	104
organizations operated exclusively for charitable purposes as	105
defined in division (B)(12) of this section, provided that the	106
number of days on which such tangible personal property or	107
services, other than items never subject to the tax, are sold does	108
not exceed six in any calendar year, except as otherwise provided	109
in division (B)(9)(b) of this section. If the number of days on	110
which such sales are made exceeds six in any calendar year, the	111
church or organization shall be considered to be engaged in	112
business and all subsequent sales by it shall be subject to the	113
tax. In counting the number of days, all sales by groups within a	114
church or within an organization shall be considered to be sales	115
of that church or organization.	116

(b) The limitation on the number of days on which tax-exempt	117
sales may be made by a church or organization under division	118
(B)(9)(a) of this section does not apply to sales made by student	119
clubs and other groups of students of a primary or secondary	120
school, or a parent-teacher association, booster group, or similar	121
organization that raises money to support or fund curricular or	122
extracurricular activities of a primary or secondary school.	123

(c) Divisions (B)(9)(a) and (b) of this section do not apply	124
to sales by a noncommercial educational radio or television	125
broadcasting station.	126

(10) Sales not within the taxing power of this state under	127
the Constitution or laws of the United States or the Constitution	128
of this state;	129

(11) Except for transactions that are sales under division	130
(B)(3)(r) of section 5739.01 of the Revised Code, the	131
transportation of persons or property, unless the transportation	132
is by a private investigation and security service;	133

(12) Sales of tangible personal property or services to	134
churches, to organizations exempt from taxation under section	135
501(c)(3) of the Internal Revenue Code of 1986, and to any other	136
nonprofit organizations operated exclusively for charitable	137
purposes in this state, no part of the net income of which inures	138
to the benefit of any private shareholder or individual, and no	139
substantial part of the activities of which consists of carrying	140
on propaganda or otherwise attempting to influence legislation;	141
sales to offices administering one or more homes for the aged or	142
one or more hospital facilities exempt under section 140.08 of the	143
Revised Code; and sales to organizations described in division (D)	144
of section 5709.12 of the Revised Code.	145

"Charitable purposes" means the relief of poverty; the	146
improvement of health through the alleviation of illness, disease,	147
or injury; the operation of an organization exclusively for the	148
provision of professional, laundry, printing, and purchasing	149
services to hospitals or charitable institutions; the operation of	150
a home for the aged, as defined in section 5701.13 of the Revised	151
Code; the operation of a radio or television broadcasting station	152
that is licensed by the federal communications commission as a	153
noncommercial educational radio or television station; the	154
operation of a nonprofit animal adoption service or a county	155
humane society; the promotion of education by an institution of	156
learning that maintains a faculty of qualified instructors,	157
teaches regular continuous courses of study, and confers a	158
recognized diploma upon completion of a specific curriculum; the	159
operation of a parent-teacher association, booster group, or	160
similar organization primarily engaged in the promotion and	161
support of the curricular or extracurricular activities of a	162
primary or secondary school; the operation of a community or area	163
center in which presentations in music, dramatics, the arts, and	164
related fields are made in order to foster public interest and	165
education therein; the production of performances in music,	166
dramatics, and the arts; or the promotion of education by an	167
organization engaged in carrying on research in, or the	168
dissemination of, scientific and technological knowledge and	169
information primarily for the public.	170

Nothing in this division shall be deemed to exempt sales to	171
any organization for use in the operation or carrying on of a	172
trade or business, or sales to a home for the aged for use in the	173
operation of independent living facilities as defined in division	174
(A) of section 5709.12 of the Revised Code.	175

(13) Building and construction materials and services sold to	176
construction contractors for incorporation into a structure or	177
improvement to real property under a construction contract with	178
this state or a political subdivision of this state, or with the	179
United States government or any of its agencies; building and	180
construction materials and services sold to construction	181
contractors for incorporation into a structure or improvement to	182
real property that are accepted for ownership by this state or any	183
of its political subdivisions, or by the United States government	184
or any of its agencies at the time of completion of the structures	185
or improvements; building and construction materials sold to	186
construction contractors for incorporation into a horticulture	187
structure or livestock structure for a person engaged in the	188
business of horticulture or producing livestock; building	189
materials and services sold to a construction contractor for	190
incorporation into a house of public worship or religious	191
education, or a building used exclusively for charitable purposes	192
under a construction contract with an organization whose purpose	193
is as described in division (B)(12) of this section; building	194
materials and services sold to a construction contractor for	195
incorporation into a building under a construction contract with	196
an organization exempt from taxation under section 501(c)(3) of	197
the Internal Revenue Code of 1986 when the building is to be used	198
exclusively for the organization's exempt purposes; building and	199
construction materials sold for incorporation into the original	200
construction of a sports facility under section 307.696 of the	201
Revised Code; building and construction materials and services	202
sold to a construction contractor for incorporation into real	203
property outside this state if such materials and services, when	204
sold to a construction contractor in the state in which the real	205
property is located for incorporation into real property in that	206
state, would be exempt from a tax on sales levied by that state;	207
and, until one calendar year after the construction of a	208
convention center that qualifies for property tax exemption under	209
section 5709.084 of the Revised Code is completed, building and	210
construction materials and services sold to a construction	211
contractor for incorporation into the real property comprising	212
that convention center;	213

(14) Sales of ships or vessels or rail rolling stock used or	214
to be used principally in interstate or foreign commerce, and	215
repairs, alterations, fuel, and lubricants for such ships or	216
vessels or rail rolling stock;	217

(15) Sales to persons primarily engaged in any of the	218
activities mentioned in division (B)(42)(a), (g), or (h) of this	219
section, to persons engaged in making retail sales, or to persons	220
who purchase for sale from a manufacturer tangible personal	221
property that was produced by the manufacturer in accordance with	222
specific designs provided by the purchaser, of packages, including	223
material, labels, and parts for packages, and of machinery,	224
equipment, and material for use primarily in packaging tangible	225
personal property produced for sale, including any machinery,	226
equipment, and supplies used to make labels or packages, to	227
prepare packages or products for labeling, or to label packages or	228
products, by or on the order of the person doing the packaging, or	229
sold at retail. "Packages" includes bags, baskets, cartons,	230
crates, boxes, cans, bottles, bindings, wrappings, and other	231
similar devices and containers, but does not include motor	232
vehicles or bulk tanks, trailers, or similar devices attached to	233
motor vehicles. "Packaging" means placing in a package. Division	234
(B)(15) of this section does not apply to persons engaged in	235
highway transportation for hire.	236

(16) Sales of food to persons using supplemental nutrition	237
assistance program benefits to purchase the food. As used in this	238
division, "food" has the same meaning as in 7 U.S.C. 2012 and	239
federal regulations adopted pursuant to the Food and Nutrition Act	240
of 2008.	241

(17) Sales to persons engaged in farming, agriculture,	242
horticulture, or floriculture, of tangible personal property for	243
use or consumption primarily in the production by farming,	244
agriculture, horticulture, or floriculture of other tangible	245
personal property for use or consumption primarily in the	246
production of tangible personal property for sale by farming,	247
agriculture, horticulture, or floriculture; or material and parts	248
for incorporation into any such tangible personal property for use	249
or consumption in production; and of tangible personal property	250
for such use or consumption in the conditioning or holding of	251
products produced by and for such use, consumption, or sale by	252
persons engaged in farming, agriculture, horticulture, or	253
floriculture, except where such property is incorporated into real	254
property;	255

(18) Sales of drugs for a human being that may be dispensed	256
only pursuant to a prescription; insulin as recognized in the	257
official United States pharmacopoeia; urine and blood testing	258
materials when used by diabetics or persons with hypoglycemia to	259
test for glucose or acetone; hypodermic syringes and needles when	260
used by diabetics for insulin injections; epoetin alfa when	261
purchased for use in the treatment of persons with medical	262
disease; hospital beds when purchased by hospitals, nursing homes,	263
or other medical facilities; and medical oxygen and medical	264
oxygen-dispensing equipment when purchased by hospitals, nursing	265
homes, or other medical facilities;	266

(19) Sales of prosthetic devices, durable medical equipment	267
for home use, or mobility enhancing equipment, when made pursuant	268
to a prescription and when such devices or equipment are for use	269
by a human being.	270

(20) Sales of emergency and fire protection vehicles and	271
equipment to nonprofit organizations for use solely in providing	272
fire protection and emergency services, including trauma care and	273
emergency medical services, for political subdivisions of the	274
state;	275

(21) Sales of tangible personal property manufactured in this	276
state, if sold by the manufacturer in this state to a retailer for	277
use in the retail business of the retailer outside of this state	278
and if possession is taken from the manufacturer by the purchaser	279
within this state for the sole purpose of immediately removing the	280
same from this state in a vehicle owned by the purchaser;	281

(22) Sales of services provided by the state or any of its	282
political subdivisions, agencies, instrumentalities, institutions,	283
or authorities, or by governmental entities of the state or any of	284
its political subdivisions, agencies, instrumentalities,	285
institutions, or authorities;	286

(23) Sales of motor vehicles to nonresidents of this state	287
under the circumstances described in division (B) of section	288
5739.029 of the Revised Code;	289

(24) Sales to persons engaged in the preparation of eggs for	290
sale of tangible personal property used or consumed directly in	291
such preparation, including such tangible personal property used	292
for cleaning, sanitizing, preserving, grading, sorting, and	293
classifying by size; packages, including material and parts for	294
packages, and machinery, equipment, and material for use in	295
packaging eggs for sale; and handling and transportation equipment	296
and parts therefor, except motor vehicles licensed to operate on	297
public highways, used in intraplant or interplant transfers or	298
shipment of eggs in the process of preparation for sale, when the	299
plant or plants within or between which such transfers or	300
shipments occur are operated by the same person. "Packages"	301
includes containers, cases, baskets, flats, fillers, filler flats,	302
cartons, closure materials, labels, and labeling materials, and	303
"packaging" means placing therein.	304

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

305

(b) Sales of water by a nonprofit corporation engaged	306
exclusively in the treatment, distribution, and sale of water to	307
consumers, if such water is delivered to consumers through pipes	308
or tubing.	309

(26) Fees charged for inspection or reinspection of motor	310
vehicles under section 3704.14 of the Revised Code;	311

(27) Sales to persons licensed to conduct a food service	312
operation pursuant to section 3717.43 of the Revised Code, of	313
tangible personal property primarily used directly for the	314
following:	315

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

316

(b) To preserve food that has been or will be prepared for	317
human consumption for sale by the food service operator, not	318
including tangible personal property used to display food for	319
selection by the consumer;	320

(c) To clean tangible personal property used to prepare or	321
serve food for human consumption for sale.	322

(28) Sales of animals by nonprofit animal adoption services	323
or county humane societies;	324

(29) Sales of services to a corporation described in division	325
(A) of section 5709.72 of the Revised Code, and sales of tangible	326
personal property that qualifies for exemption from taxation under	327
section 5709.72 of the Revised Code;	328

(30) Sales and installation of agricultural land tile, as	329
defined in division (B)(5)(a) of section 5739.01 of the Revised	330
Code;	331

(31) Sales and erection or installation of portable grain	332
bins, as defined in division (B)(5)(b) of section 5739.01 of the	333
Revised Code;	334

(32) The sale, lease, repair, and maintenance of, parts for,	335
or items attached to or incorporated in, motor vehicles that are	336
primarily used for transporting tangible personal property	337
belonging to others by a person engaged in highway transportation	338
for hire, except for packages and packaging used for the	339
transportation of tangible personal property;	340

(33) Sales to the state headquarters of any veterans'	341
organization in this state that is either incorporated and issued	342
a charter by the congress of the United States or is recognized by	343
the United States veterans administration, for use by the	344
headquarters;	345

(34) Sales to a telecommunications service vendor, mobile	346
telecommunications service vendor, or satellite broadcasting	347
service vendor of tangible personal property and services used	348
directly and primarily in transmitting, receiving, switching, or	349
recording any interactive, one- or two-way electromagnetic	350
communications, including voice, image, data, and information,	351
through the use of any medium, including, but not limited to,	352
poles, wires, cables, switching equipment, computers, and record	353
storage devices and media, and component parts for the tangible	354
personal property. The exemption provided in this division shall	355
be in lieu of all other exemptions under division (B)(42)(a) or	356
(n) of this section to which the vendor may otherwise be entitled,	357
based upon the use of the thing purchased in providing the	358
telecommunications, mobile telecommunications, or satellite	359
broadcasting service.	360

(35)(a) Sales where the purpose of the consumer is to use or	361
consume the things transferred in making retail sales and	362
consisting of newspaper inserts, catalogues, coupons, flyers, gift	363
certificates, or other advertising material that prices and	364
describes tangible personal property offered for retail sale.	365

(b) Sales to direct marketing vendors of preliminary	366
materials such as photographs, artwork, and typesetting that will	367
be used in printing advertising material; and of printed matter	368
that offers free merchandise or chances to win sweepstake prizes	369
and that is mailed to potential customers with advertising	370
material described in division (B)(35)(a) of this section;	371

(c) Sales of equipment such as telephones, computers,	372
facsimile machines, and similar tangible personal property	373
primarily used to accept orders for direct marketing retail sales.	374

(d) Sales of automatic food vending machines that preserve	375
food with a shelf life of forty-five days or less by refrigeration	376
and dispense it to the consumer.	377

For purposes of division (B)(35) of this section, "direct	378
marketing" means the method of selling where consumers order	379
tangible personal property by United States mail, delivery	380
service, or telecommunication and the vendor delivers or ships the	381
tangible personal property sold to the consumer from a warehouse,	382
catalogue distribution center, or similar fulfillment facility by	383
means of the United States mail, delivery service, or common	384
carrier.	385

(36) Sales to a person engaged in the business of	386
horticulture or producing livestock of materials to be	387
incorporated into a horticulture structure or livestock structure;	388

(37) Sales of personal computers, computer monitors, computer	389
keyboards, modems, and other peripheral computer equipment to an	390
individual who is licensed or certified to teach in an elementary	391
or a secondary school in this state for use by that individual in	392
preparation for teaching elementary or secondary school students;	393

(38) Sales to a professional racing team of any of the	394
following:	395

(a) Motor racing vehicles;

396

(b) Repair services for motor racing vehicles;

397

(c) Items of property that are attached to or incorporated in	398
motor racing vehicles, including engines, chassis, and all other	399
components of the vehicles, and all spare, replacement, and	400
rebuilt parts or components of the vehicles; except not including	401
tires, consumable fluids, paint, and accessories consisting of	402
instrumentation sensors and related items added to the vehicle to	403
collect and transmit data by means of telemetry and other forms of	404
communication.	405

(39) Sales of used manufactured homes and used mobile homes,	406
as defined in section 5739.0210 of the Revised Code, made on or	407
after January 1, 2000;	408

(40) Sales of tangible personal property and services to a	409
provider of electricity used or consumed directly and primarily in	410
generating, transmitting, or distributing electricity for use by	411
others, including property that is or is to be incorporated into	412
and will become a part of the consumer's production, transmission,	413
or distribution system and that retains its classification as	414
tangible personal property after incorporation; fuel or power used	415
in the production, transmission, or distribution of electricity;	416
energy conversion equipment as defined in section 5727.01 of the	417
Revised Code; and tangible personal property and services used in	418
the repair and maintenance of the production, transmission, or	419
distribution system, including only those motor vehicles as are	420
specially designed and equipped for such use. The exemption	421
provided in this division shall be in lieu of all other exemptions	422
in division (B)(42)(a) or (n) of this section to which a provider	423
of electricity may otherwise be entitled based on the use of the	424
tangible personal property or service purchased in generating,	425
transmitting, or distributing electricity.	426

(41) Sales to a person providing services under division	427
(B)(3)(r) of section 5739.01 of the Revised Code of tangible	428
personal property and services used directly and primarily in	429
providing taxable services under that section.	430

(42) Sales where the purpose of the purchaser is to do any of	431
the following:	432

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

(b) To hold the thing transferred as security for the	450
performance of an obligation of the vendor;	451

(c) To resell, hold, use, or consume the thing transferred as	452
evidence of a contract of insurance;	453

(d) To use or consume the thing directly in commercial	454
fishing;	455

(e) To incorporate the thing transferred as a material or a	456
part into, or to use or consume the thing transferred directly in	457
the production of, magazines distributed as controlled circulation	458
publications;	459

(f) To use or consume the thing transferred in the production	460
and preparation in suitable condition for market and sale of	461
printed, imprinted, overprinted, lithographic, multilithic,	462
blueprinted, photostatic, or other productions or reproductions of	463
written or graphic matter;	464

(g) To use the thing transferred, as described in section	465
5739.011 of the Revised Code, primarily in a manufacturing	466
operation to produce tangible personal property for sale;	467

(h) To use the benefit of a warranty, maintenance or service	468
contract, or similar agreement, as described in division (B)(7) of	469
section 5739.01 of the Revised Code, to repair or maintain	470
tangible personal property, if all of the property that is the	471
subject of the warranty, contract, or agreement would not be	472
subject to the tax imposed by this section;	473

(i) To use the thing transferred as qualified research and	474
development equipment;	475

(j) To use or consume the thing transferred primarily in	476
storing, transporting, mailing, or otherwise handling purchased	477
sales inventory in a warehouse, distribution center, or similar	478
facility when the inventory is primarily distributed outside this	479
state to retail stores of the person who owns or controls the	480
warehouse, distribution center, or similar facility, to retail	481
stores of an affiliated group of which that person is a member, or	482
by means of direct marketing. This division does not apply to	483
motor vehicles registered for operation on the public highways. As	484
used in this division, "affiliated group" has the same meaning as	485
in division (B)(3)(e) of section 5739.01 of the Revised Code and	486
"direct marketing" has the same meaning as in division (B)(35) of	487
this section.	488

(k) To use or consume the thing transferred to fulfill a	489
contractual obligation incurred by a warrantor pursuant to a	490
warranty provided as a part of the price of the tangible personal	491
property sold or by a vendor of a warranty, maintenance or service	492
contract, or similar agreement the provision of which is defined	493
as a sale under division (B)(7) of section 5739.01 of the Revised	494
Code;	495

(l) To use or consume the thing transferred in the production	496
of a newspaper for distribution to the public;	497

(m) To use tangible personal property to perform a service	498
listed in division (B)(3) of section 5739.01 of the Revised Code,	499
if the property is or is to be permanently transferred to the	500
consumer of the service as an integral part of the performance of	501
the service;	502

(n) To use or consume the thing transferred primarily in	503
producing tangible personal property for sale by farming,	504
agriculture, horticulture, or floriculture. Persons engaged in	505
rendering farming, agriculture, horticulture, or floriculture	506
services for others are deemed engaged primarily in farming,	507
agriculture, horticulture, or floriculture. This paragraph does	508
not exempt from "retail sale" or "sales at retail" the sale of	509
tangible personal property that is to be incorporated into a	510
structure or improvement to real property.	511

(o) To use or consume the thing transferred in acquiring,	512
formatting, editing, storing, and disseminating data or	513
information by electronic publishing.	514

As used in division (B)(42) of this section, "thing" includes	515
all transactions included in divisions (B)(3)(a), (b), and (e) of	516
section 5739.01 of the Revised Code.	517

(43) Sales conducted through a coin operated device that	518
activates vacuum equipment or equipment that dispenses water,	519
whether or not in combination with soap or other cleaning agents	520
or wax, to the consumer for the consumer's use on the premises in	521
washing, cleaning, or waxing a motor vehicle, provided no other	522
personal property or personal service is provided as part of the	523
transaction.	524

(44) Sales of replacement and modification parts for engines,	525
airframes, instruments, and interiors in, and paint for, aircraft	526
used primarily in a fractional aircraft ownership program, and	527
sales of services for the repair, modification, and maintenance of	528
such aircraft, and machinery, equipment, and supplies primarily	529
used to provide those services.	530

(45) Sales of telecommunications service that is used	531
directly and primarily to perform the functions of a call center.	532
As used in this division, "call center" means any physical	533
location where telephone calls are placed or received in high	534
volume for the purpose of making sales, marketing, customer	535
service, technical support, or other specialized business	536
activity, and that employs at least fifty individuals that engage	537
in call center activities on a full-time basis, or sufficient	538
individuals to fill fifty full-time equivalent positions.	539

(46) Sales by a telecommunications service vendor of 900	540
service to a subscriber. This division does not apply to	541
information services, as defined in division (FF) of section	542
5739.01 of the Revised Code.	543

(47) Sales of value-added non-voice data service. This	544
division does not apply to any similar service that is not	545
otherwise a telecommunications service.	546

(48)(a) Sales of machinery, equipment, and software to a	547
qualified direct selling entity for use in a warehouse or	548
distribution center primarily for storing, transporting, or	549
otherwise handling inventory that is held for sale to independent	550
salespersons who operate as direct sellers and that is held	551
primarily for distribution outside this state;	552

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

553

(i) "Direct seller" means a person selling consumer products	554
to individuals for personal or household use and not from a fixed	555
retail location, including selling such product at in-home product	556
demonstrations, parties, and other one-on-one selling.	557

(ii) "Qualified direct selling entity" means an entity	558
selling to direct sellers at the time the entity enters into a tax	559
credit agreement with the tax credit authority pursuant to section	560
122.17 of the Revised Code, provided that the agreement was	561
entered into on or after January 1, 2007. Neither contingencies	562
relevant to the granting of, nor later developments with respect	563
to, the tax credit shall impair the status of the qualified direct	564
selling entity under division (B)(48) of this section after	565
execution of the tax credit agreement by the tax credit authority.	566

(c) Division (B)(48) of this section is limited to machinery,	567
equipment, and software first stored, used, or consumed in this	568
state within the period commencing June 24, 2008, and ending on	569
the date that is five years after that date.	570

(49) Sales of materials, parts, equipment, or engines used in	571
the repair or maintenance of aircraft or avionics systems of such	572
aircraft, and sales of repair, remodeling, replacement, or	573
maintenance services in this state performed on aircraft or on an	574
aircraft's avionics, engine, or component materials or parts. As	575
used in division (B)(49) of this section, "aircraft" means	576
aircraft of more than six thousand pounds maximum certified	577
takeoff weight or used exclusively in general aviation.	578

(50) Sales of full flight simulators that are used for pilot	579
or flight-crew training, sales of repair or replacement parts or	580
components, and sales of repair or maintenance services for such	581
full flight simulators. "Full flight simulator" means a replica of	582
a specific type, or make, model, and series of aircraft cockpit.	583
It includes the assemblage of equipment and computer programs	584
necessary to represent aircraft operations in ground and flight	585
conditions, a visual system providing an out-of-the-cockpit view,	586
and a system that provides cues at least equivalent to those of a	587
three-degree-of-freedom motion system, and has the full range of	588
capabilities of the systems installed in the device as described	589
in appendices A and B of part 60 of chapter 1 of title 14 of the	590
Code of Federal Regulations.	591

(51) Any transfer or lease of tangible personal property	592
between the state and JobsOhio in accordance with section 4313.02	593
of the Revised Code.	594

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

595

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

596

(i) "Qualifying corporation" means a nonprofit corporation	597
organized in this state that leases from an eligible county land,	598
buildings, structures, fixtures, and improvements to the land that	599
are part of or used in a public recreational facility used by a	600
major league professional athletic team or a class A to class AAA	601
minor league affiliate of a major league professional athletic	602
team for a significant portion of the team's home schedule,	603
provided the following apply:	604

(I) The facility is leased from the eligible county pursuant	605
to a lease that requires substantially all of the revenue from the	606
operation of the business or activity conducted by the nonprofit	607
corporation at the facility in excess of operating costs, capital	608
expenditures, and reserves to be paid to the eligible county at	609
least once per calendar year.	610

(II) Upon dissolution and liquidation of the nonprofit	611
corporation, all of its net assets are distributable to the board	612
of commissioners of the eligible county from which the corporation	613
leases the facility.	614

(ii) "Eligible county" has the same meaning as in section	615
307.695 of the Revised Code.	616

(53) Sales to or by a cable service provider, video service	617
provider, or radio or television broadcast station regulated by	618
the federal government of cable service or programming, video	619
service or programming, audio service or programming, or	620
electronically transferred digital audiovisual or audio work. As	621
used in division (B)(53) of this section, "cable service" and	622
"cable service provider" have the same meanings as in section	623
1332.01 of the Revised Code, and "video service," "video service	624
provider," and "video programming" have the same meanings as in	625
section 1332.21 of the Revised Code.	626

(54) Sales of qualifying energy star products occurring on	627
the first Friday in April and the following Saturday and Sunday of	628
each year.	629

As used in this division, "qualifying energy star product"	630
means a device that carries the energy star label indicating that	631
the device meets the energy efficiency criteria of the energy star	632
program established by the United States department of energy and	633
the United States environmental protection agency and that is	634
categorized as an appliance or as heating and cooling equipment	635
under that program. "Qualifying energy star product" does not	636
include any device that is rented, purchased for use in a trade or	637
business, or purchased by a person who will affix or install the	638
device on behalf of the ultimate consumer. For the purposes of	639
this division, a sale of a qualifying energy star product is	640
considered to "occur" during the specified three-day period if,	641
regardless of the date the device is delivered, the purchaser paid	642
for the device during the specified period and did not request any	643
delay in the shipment or delivery of the device.	644

(C) For the purpose of the proper administration of this	645
chapter, and to prevent the evasion of the tax, it is presumed	646
that all sales made in this state are subject to the tax until the	647
contrary is established.	648

(D) The levy of this tax on retail sales of recreation and	649
sports club service shall not prevent a municipal corporation from	650
levying any tax on recreation and sports club dues or on any	651
income generated by recreation and sports club dues.	652

(E) The tax collected by the vendor from the consumer under	653
this chapter is not part of the price, but is a tax collection for	654
the benefit of the state, and of counties levying an additional	655
sales tax pursuant to section 5739.021 or 5739.026 of the Revised	656
Code and of transit authorities levying an additional sales tax	657
pursuant to section 5739.023 of the Revised Code. Except for the	658
discount authorized under section 5739.12 of the Revised Code and	659
the effects of any rounding pursuant to section 5703.055 of the	660
Revised Code, no person other than the state or such a county or	661
transit authority shall derive any benefit from the collection or	662
payment of the tax levied by this section or section 5739.021,	663
5739.023, or 5739.026 of the Revised Code.	664

Sec. 5739.05.  (A)(1) The tax commissioner shall enforce and	665
administer sections 5739.01 to 5739.31 of the Revised Code, which	666
are hereby declared to be sections which the commissioner is	667
required to administer within the meaning of sections 5703.17 to	668
5703.37, 5703.39, 5703.41, and 5703.45 of the Revised Code. The	669
commissioner may adopt and promulgate, in accordance with sections	670
119.01 to 119.13 of the Revised Code, such rules as the	671
commissioner deems necessary to administer sections 5739.01 to	672
5739.31 of the Revised Code.	673

(2) The commissioner, in accordance with section 5703.14 of	674
the Revised Code, shall adopt rules necessary to implement the	675
three-day tax exemption periods provided by division (B)(54) of	676
section 5739.02 of the Revised Code. Before each exemption period	677
required under that division, the commissioner shall make	678
available to vendors informational bulletins explaining the	679
exemption.	680

(B) Upon application, the commissioner may authorize a vendor	681
to pay on a predetermined basis the tax levied by or pursuant to	682
section 5739.02, 5739.021, 5739.023, or 5739.026 of the Revised	683
Code upon sales of things produced or distributed or services	684
provided by such vendor, and the commissioner may waive the	685
collection of the tax from the consumer. The commissioner shall	686
not grant such authority unless the commissioner finds that the	687
granting of the authority would improve compliance and increase	688
the efficiency of the administration of the tax. The person to	689
whom such authority is granted shall post a notice, if required by	690
the commissioner, at the location where the product is offered for	691
sale that the tax is included in the selling price. The	692
comissionercommissioner may adopt rules to administer this	693
division.	694

(C) The commissioner may authorize a vendor to pay, on the	695
basis of a prearranged agreement under this division, the tax	696
levied by section 5739.02 or pursuant to section 5739.021,	697
5739.023, or 5739.026 of the Revised Code, and waive the	698
requirement that the vendor maintain the complete and accurate	699
record of individual taxable sales and tax collected thereon	700
required by section 5739.11 of the Revised Code, upon application	701
of the vendor, if the commissioner finds that the conditions of	702
the vendor-applicant's business are such that the maintenance of	703
such records of individual taxable sales and tax collected thereon	704
would impose an unreasonable burden upon the vendor. If the	705
commissioner determines that such unreasonable burden has been	706
imposed, the vendor and the commissioner shall agree to the terms	707
and conditions of a test check to be conducted. If the parties are	708
unable to agree to the terms and conditions of the test check, the	709
application shall be denied. The test check conducted shall	710
determine the proportion that taxable retail sales bear to all of	711
the vendor's retail sales and the ratio which the tax required to	712
be collected under sections 5739.02, 5739.021, and 5739.023 of the	713
Revised Code bears to the receipts from the vendor's taxable	714
retail sales.	715

The vendor shall collect the tax on the vendor's taxable	716
sales and the vendor's liability for collecting or remitting shall	717
be based upon the proportions and ratios established by the test	718
check, and not upon any other basis of determination, until such	719
time as a subsequent test check is made at the request of either	720
the vendor or the commissioner where either party believes that	721
the nature of the vendor's business has so changed as to make the	722
prior or existing test check no longer representative. The	723
commissioner may give notice to the vendor at any time that the	724
authorization is revoked or the vendor may notify the commissioner	725
that the vendor no longer elects to report under the	726
authorization. Such notice shall be delivered to the other party	727
personally or by registered mail. The revocation or cancellation	728
is not effective prior to the date of receipt of such notice.	729

Section 2. That existing sections 5739.02 and 5739.05 of the	730
Revised Code are hereby repealed.	731

Section 3. Section 5739.02 of the Revised Code is presented	732
in this act as a composite of the section as amended by both Am.	733
Sub. H.B. 51 and Am. Sub. H.B. 59 of the 130th General Assembly.	734
The General Assembly, applying the principle stated in division	735
(B) of section 1.52 of the Revised Code that amendments are to be	736
harmonized if reasonably capable of simultaneous operation, finds	737
that the composite is the resulting version of the section in	738
effect prior to the effective date of the section as presented in	739
this act.	740