130th Ohio General Assembly
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As Introduced

123rd General Assembly
Regular Session
1999-2000
S. B. No. 67

SENATORS HOTTINGER-FINAN-WACHTMANN-BRADY-DiDONATO-PRENTISS- SCHAFRATH-WHITE-OELSLAGER


A BILL
To amend sections 324.01, 718.01, 5701.08, 5709.08, 5709.10, 5709.11, 5709.12, 5709.121, 5733.01, 5739.01, and 5739.02 and to enact sections 1771.01 to 1771.11 of the Revised Code to provide for fair competition in the provision of cable television services by establishing conditions under which governmental cable operators may be formed, including the franchising of those operators by the Public Utilities Commission, and by taxing such operators in the manner of private cable operators.

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


Section 1. That sections 324.01, 718.01, 5701.08, 5709.08, 5709.10, 5709.11, 5709.12, 5709.121, 5733.01, 5739.01, and 5739.02 be amended and sections 1771.01, 1771.02, 1771.03, 1771.04, 1771.05, 1771.06, 1771.07, 1771.08, 1771.09, 1771.10, and 1771.11 of the Revised Code be enacted to read as follows:

Sec. 324.01. As used in sections 324.01 to 324.12 of the Revised Code:

(A) "Utility" means:

(1) An electric company, gas company, heating company, cooling company, telephone company, telegraph company, or communications company supplying a utility service;

(2) Any municipal corporation, county, or other political subdivision, instrumentality, or agency of the state supplying a utility service;

(3) Any individual, firm, partnership, association, trust, joint-stock company, joint venture, corporation, nonprofit corporation, cooperative, receiver, assignee, trustee in bankruptcy, estate, trustee, or organization of any kind which owns or operates any office building, storeroom building, shopping center, apartment building, apartment hotel, condominium, or other multiple business or dwelling unit, and which sells, furnishes, or delivers a utility service to the tenants or occupants thereof, provided the charge for such utility service is separately stated.

(B) Any individual, firm, partnership, association, trust, joint-stock company, joint venture, corporation, municipal corporation, county, or other political subdivision, instrumentality, or agency of the state, nonprofit corporation, cooperative, receiver, assignee, trustee in bankruptcy, estate, trustee, or organization of any kind:

(1) Is an electric company when supplying electricity for light, heat, cooling, or power purposes to customers within a county levying a utilities service tax;

(2) Is a gas company when supplying artificial gas or natural gas for light, heat, cooling, or power purposes to customers within a county levying a utilities service tax;

(3) Is a heating company when supplying water, steam, or air through pipes or tubing for heating purposes to customers within a county levying a utilities service tax;

(4) Is a cooling company when supplying water, steam, or air through pipes or tubing for cooling purposes to customers within a county levying a utilities service tax;

(5) Is a telephone company when transmitting telephonic messages to, from, or within a county levying a utilities service tax;

(6) Is a telegraph company when transmitting telegraphic messages to, from, or within a county levying a utilities service tax;

(7) Is a communications company when supplying the services described in section 4931.11 of the Revised Code, other than transmitting telephonic or telegraphic messages, to, from, or within a county levying a utilities service tax.

(C) "Utility service" means the supplying of water, steam, or air through pipes or tubing for heating or cooling purposes to customers within the county, the supplying of electricity, artificial gas, or natural gas to customers within the county, and the transmission of telephonic or telegraphic messages or the supplying of any of the services described in section 4931.11 of the Revised Code when the transmission or supplying originates from and is charged to or is received by and charged to a customer within the county.

(D) "Charge for utility service" means the amount charged to the customer for a utility service without deduction for any discount for early payment but after deducting the amount of any federal excise tax on such utility service, and excluding the amount paid for the purchase of appliances or other merchandise, and the amount paid for the installation of pipes, meters, poles, apparatus, instruments, switchboards, and other facilities by the utility for the purpose of rendering utility service to the customer if the charge therefor is separately stated by the utility in its bill to the customer and is not included in the basic rates charged to customers of the utility.

(E) "Customer" means any individual, firm, partnership, association, trust, joint-stock company, joint venture, corporation, nonprofit corporation, cooperative, receiver, assignee, trustee in bankruptcy, estate, trustee, or organization of any kind receiving utility service from a utility, but does not include the United States, the state, any political subdivision of the state, or any agency or instrumentality of any of them.

(F) "Business" has the same meaning as in division (E) of section 5701.08 of the Revised Code.

Sec. 718.01. (A) As used in this chapter:

(1) "Internal Revenue Code" means the Internal Revenue Code of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended.

(2) "Schedule C" means internal revenue service schedule C filed by a taxpayer pursuant to the Internal Revenue Code.

(3) "Form 2106" means internal revenue service form 2106 filed by a taxpayer pursuant to the Internal Revenue Code.

(4) "Intangible income" means income of any of the following types: income yield, interest, dividends, or other income arising from the ownership, sale, exchange, or other disposition of intangible property including, but not limited to, investments, deposits, money, or credits as those terms are defined in Chapter 5701. of the Revised Code.

(B) No municipal corporation with respect to that income which it may tax shall tax such income at other than a uniform rate.

(C) No municipal corporation shall levy a tax on income at a rate in excess of one per cent without having obtained the approval of the excess by a majority of the electors of the municipality voting on the question at a general, primary, or special election. The legislative authority of the municipal corporation shall file with the board of elections at least seventy-five days before the day of the election a copy of the ordinance together with a resolution specifying the date the election is to be held and directing the board of elections to conduct the election. The ballot shall be in the following form: "Shall the Ordinance providing for a... per cent levy on income for (Brief description of the purpose of the proposed levy) be passed?

FOR THE INCOME TAX

AGAINST THE INCOME TAX"

In the event of an affirmative vote, the proceeds of the levy may be used only for the specified purpose.

(D)(1) Except as otherwise provided in division (D)(2) of this section, no municipal corporation shall exempt from a tax on income, compensation for personal services of individuals over eighteen years of age or the net profit from a business or profession, INCLUDING THE NET PROFIT OF A CABLE OPERATOR OR A GOVERNMENTAL CABLE OPERATOR AS THOSE TERMS ARE DEFINED IN SECTION 1771.01 of the Revised Code.

(2) The legislative authority of a municipal corporation may, by ordinance or resolution, MAY exempt from a tax on income any compensation arising from the grant, sale, exchange, or other disposition of a stock option; the exercise of a stock option; or the sale, exchange, or other disposition of stock purchased under a stock option.

(E) Nothing in this section shall prevent a municipal corporation from permitting lawful deductions as prescribed by ordinance. If a taxpayer's taxable income includes income against which the taxpayer has taken a deduction for federal income tax purposes as reportable on the taxpayer's form 2106, and against which a like deduction has not been allowed by the municipal corporation, the municipal corporation shall deduct from the taxpayer's taxable income an amount equal to the deduction shown on such form allowable against such income, to the extent not otherwise so allowed as a deduction by the municipal corporation. In the case of a taxpayer who has a net profit from a business or profession that is operated as a sole proprietorship, no municipal corporation may tax or use as the base for determining the amount of the net profit that shall be considered as having a taxable situs in the municipal corporation, a greater amount than the net profit reported by the taxpayer on schedule C filed in reference to the year in question as taxable income from such sole proprietorship, except as otherwise specifically provided by ordinance or regulation.

(F) No municipal corporation shall tax any of the following:

(1) The military pay or allowances of members of the armed forces of the United States and of members of their reserve components, including the Ohio national guard;

(2) The income of religious, fraternal, charitable, scientific, literary, or educational institutions to the extent that such income is derived from tax-exempt real estate, tax-exempt tangible or intangible property, or tax-exempt activities;

(3) Except as otherwise provided in division (G) of this section, intangible income;

(4) Compensation paid under section 3501.28 or 3501.36 of the Revised Code to a person serving as a precinct election official, to the extent that such compensation does not exceed one thousand dollars annually. Such compensation in excess of one thousand dollars may be subjected to taxation by a municipal corporation. A municipal corporation shall not require the payer of such compensation to withhold any tax from that compensation.

(5) Compensation paid to an employee of a transit authority, regional transit authority, or regional transit commission created under Chapter 306. of the Revised Code for operating a transit bus or other motor vehicle for the authority or commission in or through the municipal corporation, unless the bus or vehicle is operated on a regularly scheduled route, the operator is subject to such a tax by reason of residence or domicile in the municipal corporation, or the headquarters of the authority or commission is located within the municipal corporation.

(6) The income of a public utility when that public utility is subject to the tax levied under section 5727.30 of the Revised Code.

(G) Any municipal corporation that taxes any type of intangible income on March 29, 1988, pursuant to Section 3 of Amended Substitute Senate Bill No. 238 of the 116th general assembly, may continue to tax that type of income after 1988 if a majority of the electors of the municipal corporation voting on the question of whether to permit the taxation of that type of intangible income after 1988 vote in favor thereof at an election held on November 8, 1988.

(H) Nothing in this section or section 718.02 of the Revised Code, shall authorize the levy of any tax on income which a municipal corporation is not authorized to levy under existing laws or shall require a municipal corporation to allow a deduction from taxable income for losses incurred from a sole proprietorship or partnership.

Sec. 1771.01. AS USED IN SECTIONS 1771.01 TO 1771.11 of the Revised Code:

(A) "AFFILIATE" HAS THE SAME MEANING AS IN 47 U.S.C.A. 522 AND INCLUDES A PUBLIC UTILITY OWNED OR OPERATED BY A MUNICIPAL CORPORATION OR TOWNSHIP, BUT EXCLUDES A GOVERNMENTAL CABLE OPERATOR.

(B) "CABLE OPERATOR," "CABLE SERVICE," AND "CABLE SYSTEM" HAVE THE SAME MEANINGS AS IN 47 U.S.C.A. 522.

(C) "FRANCHISE" AND "FRANCHISING AUTHORITY" HAVE THE SAME MEANINGS AS IN 47 U.S.C.A. 522.

(D) "GOVERNMENTAL CABLE OPERATOR" MEANS A CABLE OPERATOR OWNED OR OPERATED BY A MUNICIPAL CORPORATION OR TOWNSHIP OR BY ITS AFFILIATE.

(E) "LEGISLATIVE ACTION" MEANS, IN THE CASE OF A MUNICIPAL CORPORATION, THE ENACTMENT OF AN ORDINANCE BY THE LEGISLATIVE AUTHORITY OF THE MUNICIPAL CORPORATION AND, IN THE CASE OF A TOWNSHIP, THE ADOPTION OF A RESOLUTION BY THE BOARD OF TOWNSHIP TRUSTEES.

(F) "PUBLIC, EDUCATIONAL, OR GOVERNMENTAL ACCESS FACILITIES" HAS THE SAME MEANING AS IN 47 U.S.C.A. 522.

(G) "PUBLIC MONEYS" MEANS ALL MONEYS IN THE TREASURY OF A MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE OR MONEYS COMING LAWFULLY INTO THE POSSESSION OR CUSTODY OF THE TREASURER OF A MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE.

(H) "PUBLIC UTILITY" EXCLUDES A CABLE SYSTEM OWNED OR OPERATED BY A GOVERNMENTAL CABLE OPERATOR OR BY A MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE.

Sec. 1771.02. AS PROVIDED IN SECTIONS 1771.01 TO 1771.11 of the Revised Code, IT IS THE PUBLIC POLICY OF THIS STATE TO:

(A) ENSURE FAIR COMPETITION IN THE PROVISION OF CABLE SERVICE IN THIS STATE, CONSISTENT WITH THE PROCOMPETITIVE POLICIES OF THE "TELECOMMUNICATIONS ACT OF 1996," PUB. L. NO. 104-104, 110 STAT. 56, FOR THE PURPOSES OF PROVIDING THE WIDEST POSSIBLE DIVERSITY OF ENTERTAINMENT, INFORMATION, AND NEWS SOURCES TO THE GENERAL PUBLIC; ADVANCING THE UNFETTERED EXERCISE OF RIGHTS UNDER THE FIRST AMENDMENT TO THE UNITED STATES CONSTITUTION TO FREE SPEECH AND THE FREE FLOW OF INFORMATION; ENHANCING THE DEVELOPMENT AND WIDESPREAD USE OF TECHNOLOGICAL ADVANCES IN THE PROVISION OF CABLE SERVICE; AND ENCOURAGING IMPROVED CUSTOMER SERVICE AT COMPETITIVE RATES;

(B) ENSURE THAT ALL CABLE SERVICE IN THIS STATE IS PROVIDED WITHIN A COMPREHENSIVE AND NONDISCRIMINATORY FEDERAL, STATE, AND LOCAL TAX AND REGULATORY SCHEME;

(C) ALLOW THE GENERAL PUBLIC FULL AND TIMELY INFORMATION, AND THE OPPORTUNITY TO PARTICIPATE IN DECISIONS, RESPECTING THE PROVISION AND FUNDING OF CABLE SERVICES BY A MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE.

Sec. 1771.03. (A) THE PROVISION OF CABLE SERVICE OVER A CABLE SYSTEM IS NOT AN ESSENTIAL GOVERNMENTAL FUNCTION UNDER THE LAWS OF THIS STATE OR OF ANY MUNICIPAL CORPORATION OR TOWNSHIP OF THIS STATE. THE PROVISION OF CABLE SERVICE BY A MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE IS NOT A VALID EXERCISE OF THE POLICE POWER UNLESS THAT SERVICE IS PROVIDED IN ACCORDANCE WITH SECTIONS 1771.01 TO 1771.11 OF THE REVISED CODE.

(B) NO MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE MAY PROVIDE CABLE SERVICE OVER A CABLE SYSTEM, WHETHER BUNDLED OR UNBUNDLED WITH OTHER SERVICES, EXCEPT AS PROVIDED UNDER SECTIONS 1771.01 TO 1771.11 OF THE REVISED CODE.

(C) NOTHING IN SECTIONS 1771.01 TO 1771.11 of the Revised Code CONFERS AUTHORITY ON A MUNICIPAL CORPORATION OR TOWNSHIP TO OWN OR OPERATE A GOVERNMENTAL CABLE OPERATOR.

Sec. 1771.04. NO GOVERNMENTAL CABLE OPERATOR SHALL PROVIDE, WITHIN THE JURISDICTIONAL BOUNDARIES OF A MUNICIPAL CORPORATION OR TOWNSHIP, CABLE SERVICE OVER A CABLE SYSTEM UNLESS THE GOVERNMENTAL CABLE OPERATOR IS INCORPORATED AND ORGANIZED UNDER CHAPTER 1701. OR 1702. OF THE REVISED CODE AND THE MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE IS THE SOLE SHAREHOLDER OR THE SOLE MEMBER OF THE GOVERNMENTAL CABLE OPERATOR.

Sec. 1771.05. (A)(1) NO GOVERNMENTAL CABLE OPERATOR SHALL BE FORMED BY A MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE EXCEPT UPON LEGISLATIVE ACTION EXPRESSLY AUTHORIZING THAT FORMATION IN COMPLIANCE WITH THIS SECTION AND SECTION 1771.06 of the Revised Code. NO PUBLIC MONEYS OR PROPERTY OF THE MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE SHALL BE USED IN THE FORMATION OF SUCH A GOVERNMENTAL CABLE OPERATOR EXCEPT IN A MANNER CONSISTENT WITH SECTION 1771.08 of the Revised Code AND EXCEPT PURSUANT TO AN APPROPRIATION, IN THAT SAME OR RELATED LEGISLATIVE ACTION, FROM THE UNRESTRICTED FUND BALANCE OF THE MUNICIPAL CORPORATION, TOWNSHIP, OR AFFILIATE FOR THE EXCLUSIVE PURPOSE OF MAKING A LOAN TO, OR CONTRIBUTION TO THE CAPITAL OF, THE GOVERNMENTAL CABLE OPERATOR.

(2) NO LEGISLATIVE ACTION SHALL BE TAKEN FOR THE PURPOSES OF DIVISION (A)(1) OF THIS SECTION WITHOUT THE LEGISLATIVE AUTHORITY OF THAT MUNICIPAL CORPORATION OR TOWNSHIP FIRST FINDING ALL OF THE FOLLOWING:

(a) THE PROVISION OF CABLE SERVICE BY THE GOVERNMENTAL CABLE OPERATOR WILL PROMOTE THE COMPETITIVE PROVISION OF IMPROVED CABLE SERVICE TO CITIZENS OF THE MUNICIPAL CORPORATION OR TOWNSHIP.

(b) THE APPROPRIATION OF PUBLIC MONEYS FOR THE PURPOSE OF HAVING CABLE SERVICE PROVIDED BY THE GOVERNMENTAL CABLE OPERATOR WILL BE OF GREATER GENERAL BENEFIT TO THE COMMUNITY THAN OTHER AUTHORIZED USES OF THOSE MONEYS.

(c) THE GOVERNMENTAL CABLE OPERATOR WILL BE SELF-SUSTAINING AFTER RECEIPT OF THE APPROPRIATED MONEYS.

(3) LEGISLATIVE ACTION UNDER DIVISION (A)(1) OF THIS SECTION ALSO SHALL BE PRECEDED BY A PUBLIC HEARING CONCERNING THE FINDINGS OF THE FEASIBILITY STUDY PRESCRIBED IN SECTION 1771.06 OF THE REVISED CODE. THE HEARING SHALL BE HELD BY THE LEGISLATIVE AUTHORITY NOT MORE THAN SIXTY DAYS AFTER THE FILING OF THE FEASIBILITY STUDY IN ACCORDANCE WITH DIVISION (D) OF THAT SECTION. THE LEGISLATIVE AUTHORITY SHALL PUBLISH NOTICE OF THE HEARING IN ACCORDANCE WITH DIVISION (A) OF SECTION 1771.09 OF THE REVISED CODE. THE NOTICE SHALL STATE THE TIME AND PLACE OF THE HEARING AND SHALL CONTAIN A SUMMARY OF THE CONCLUSIONS OF THE FEASIBILITY STUDY, INCLUDING, BUT NOT LIMITED TO, THE ESTIMATED AMOUNT OF PUBLIC MONEYS TO BE LOANED OR CONTRIBUTED BY THE MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE TO THE OPERATOR AS AUTHORIZED UNDER DIVISION (A)(1) OF THIS SECTION, AS WELL AS A STATEMENT THAT THE STUDY IS AVAILABLE FOR PUBLIC INSPECTION AND COPYING IN ACCORDANCE WITH DIVISION (B) OF SECTION 1771.09 of the Revised Code AND A STATEMENT OF THE LOCATION AND OFFICE HOURS OF THE RELEVANT OFFICE UNDER THAT DIVISION.

(B) NOTHING IN DIVISION (A) OF THIS SECTION APPLIES WITH RESPECT TO A GOVERNMENTAL CABLE OPERATOR OPERATING PRIOR TO THE EFFECTIVE DATE OF THIS SECTION.

Sec. 1771.06. (A) NO MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE SHALL FUND A FEASIBILITY STUDY FOR THE PURPOSE OF DIVISION (A)(3) OF SECTION 1771.05 OF THE REVISED CODE EXCEPT UPON LEGISLATIVE ACTION EXPRESSLY AUTHORIZING THE STUDY AND APPROPRIATING FROM THE UNRESTRICTED FUND BALANCE OF THE MUNICIPAL CORPORATION, TOWNSHIP, OR AFFILIATE PUBLIC MONEYS SUFFICIENT TO PAY ALL COSTS OF CONDUCTING THE STUDY AND PREPARING AND PRESENTING A REPORT ON THE STUDY CONCLUSIONS. NO SUCH LEGISLATIVE ACTION SHALL BE TAKEN WITHOUT THE LEGISLATIVE AUTHORITY FIRST FINDING THAT THERE IS A SUBSTANTIAL LIKELIHOOD THAT THE STANDARDS SPECIFIED IN DIVISIONS (A)(2)(a) AND (b) OF SECTION 1771.05 OF THE REVISED CODE WILL BE MET.

(B) LEGISLATIVE ACTION UNDER DIVISION (A) OF THIS SECTION SHALL BE PRECEDED BY A PUBLIC HEARING ON THE QUESTION OF THE LEGISLATIVE ACTION. THE LEGISLATIVE AUTHORITY SHALL PUBLISH NOTICE OF THE HEARING IN ACCORDANCE WITH DIVISION (A) OF SECTION 1771.09 OF THE REVISED CODE. THE NOTICE SHALL STATE THE TIME AND PLACE OF THE HEARING AND SHALL CONTAIN THE TEXT OF THE PROPOSED ORDINANCE OR RESOLUTION AND A SUMMARY OF IT, INCLUDING THE AMOUNT OF THE PROPOSED APPROPRIATION.

(C) A FEASIBILITY STUDY UNDER THIS SECTION SHALL ADDRESS ALL OF THE FOLLOWING:

(1) THE PUBLIC PURPOSES TO BE SERVED BY THE PROVISION OF CABLE SERVICE TO ALL OR SOME OF THE RESIDENTS OF THE MUNICIPAL CORPORATION OR TOWNSHIP BY A GOVERNMENTAL CABLE OPERATOR;

(2) THE NATURE AND LIKELIHOOD OF IMPROVEMENTS AND DETRIMENTS TO THE PROVISION OF CABLE SERVICE TO SUCH RESIDENTS THAT ARE EXPECTED TO RESULT, DIRECTLY OR AS THE RESULT OF ENHANCED COMPETITION, FROM PROVISION OF CABLE SERVICE BY A GOVERNMENTAL CABLE OPERATOR;

(3) THE PROJECTED COSTS OF ESTABLISHING, EQUIPPING, AND OPERATING A CABLE SYSTEM AND PROVIDING CABLE SERVICE TO THE RESIDENTS OF THE MUNICIPAL CORPORATION OR TOWNSHIP BY A GOVERNMENTAL CABLE OPERATOR;

(4) THE AMOUNTS, SOURCES, AND TERMS OF REQUIRED FINANCING, INCLUDING THE AMOUNTS, TIMING, AND TERMS OF ANY LOANS OR CAPITAL CONTRIBUTIONS TO THE GOVERNMENTAL CABLE OPERATOR BY THE MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE;

(5) THE PROJECTED OPERATING RESULTS OF THE GOVERNMENTAL CABLE OPERATOR FOR EACH OF ITS FIRST FIVE YEARS OF OPERATION, OR UNTIL IT IS PROJECTED TO BE FINANCIALLY SELF-SUSTAINING, WHICHEVER IS LATER, WHICH PROJECTIONS SHALL BE SUPPORTED BY A MARKETING STUDY;

(6) THE MANAGERIAL, TECHNICAL, FINANCIAL, AND LEGAL CAPABILITIES OF THE GOVERNMENTAL CABLE OPERATOR TO PROVIDE COMPETITIVE CABLE SERVICE;

(7) THE GOVERNMENTAL CABLE OPERATOR'S COMPLIANCE WITH APPLICABLE FEDERAL, STATE, AND LOCAL LAWS.

ADDITIONALLY, THE STUDY SHALL INCLUDE A CONCLUSION REGARDING WHETHER A GOVERNMENTAL CABLE OPERATOR FORMED BY THE MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE WOULD PROVIDE CABLE SERVICE THAT IS COMPETITIVE IN TECHNOLOGY, PROGRAMMING, RATES, AND CUSTOMER SERVICE AND WOULD BE FINANCIALLY SELF-SUSTAINING.

(D) UPON COMPLETION OF THE FEASIBILITY STUDY, IT SHALL BE FILED AND AVAILABLE FOR PUBLIC INSPECTION AND COPYING IN ACCORDANCE WITH DIVISION (B) OF SECTION 1771.09 of the Revised Code.

Sec. 1771.07. (A) AFTER THE FORMATION OF A GOVERNMENTAL CABLE OPERATOR UNDER SECTIONS 1771.01 TO 1771.06 OF THE REVISED CODE, NO OTHER PUBLIC MONEYS OF THE MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE SHALL BE PROVIDED FOR LOAN OR CONTRIBUTION TO THE CAPITAL OF THE GOVERNMENTAL CABLE OPERATOR EXCEPT UPON THE APPLICATION OF THE GOVERNMENTAL CABLE OPERATOR IN ACCORDANCE WITH DIVISIONS (B) TO (D) OF THIS SECTION AND SECTION 1771.08 of the Revised Code AND SUBSEQUENT LEGISLATIVE ACTION AUTHORIZING AN APPROPRIATION FOR THAT PURPOSE FROM THE UNRESTRICTED FUND BALANCE OF THE MUNICIPAL CORPORATION, TOWNSHIP, OR AFFILIATE, AND UPON MAKING THE FINDING PRIOR TO THAT LEGISLATIVE ACTION THAT THE CONTINUED PROVISION OF CABLE SERVICE BY THE GOVERNMENTAL CABLE OPERATOR WILL ACHIEVE ALL OF THE OBJECTIVES SPECIFIED IN DIVISIONS (A)(2)(a) TO (c) OF SECTION 1771.05 OF THE REVISED CODE.

(B) LEGISLATIVE ACTION UNDER DIVISION (A) OF THIS SECTION SHALL BE PRECEDED BY A PUBLIC HEARING ON THE QUESTION OF THE LEGISLATIVE ACTION. THE LEGISLATIVE AUTHORITY SHALL PUBLISH NOTICE OF THE HEARING IN ACCORDANCE WITH DIVISION (A) OF SECTION 1771.09 OF THE REVISED CODE. THE NOTICE SHALL STATE THE TIME AND PLACE OF THE HEARING AND SHALL CONTAIN A STATEMENT OF THE AMOUNT OF THE PROPOSED APPROPRIATION, A STATEMENT THAT THE APPLICATION IS AVAILABLE FOR PUBLIC INSPECTION AND COPYING IN ACCORDANCE WITH DIVISION (B) OF SECTION 1771.09 of the Revised Code, AND A STATEMENT OF THE LOCATION AND OFFICE HOURS OF THE RELEVANT OFFICE UNDER THAT DIVISION.

(C) THE APPLICATION BY THE GOVERNMENTAL CABLE OPERATOR FOR ADDITIONAL PUBLIC FUNDING SHALL INCLUDE ALL OF THE FOLLOWING:

(1) SPECIFICATION OF THE AMOUNT OF ADDITIONAL FUNDING REQUESTED;

(2) SPECIFICATION IN REASONABLE DETAIL OF THE PURPOSES AND COSTS TO WHICH THAT ADDITIONAL FUNDING WILL BE APPLIED;

(3) COMPARATIVE, AUDITED FINANCIAL STATEMENTS FOR THE GOVERNMENTAL CABLE OPERATOR, INCLUDING BALANCE SHEETS AND STATEMENTS OF RESULTS OF OPERATIONS AND CASH FLOW, FOR ITS TWO MOST RECENTLY COMPLETED FISCAL YEARS;

(4) A PROJECTION OF THE OPERATING RESULTS OF THE GOVERNMENTAL CABLE OPERATOR, ASSUMING SUCH ADDITIONAL FUNDING IS LOANED OR CONTRIBUTED, FOR EACH OF ITS FOLLOWING THREE YEARS OF OPERATION, OR UNTIL IT IS PROJECTED TO BE FINANCIALLY SELF-SUSTAINING, WHICHEVER IS LATER, WHICH PROJECTIONS SHALL BE SUPPORTED BY A MARKETING STUDY;

(5) IF ANY PART OF THE ADDITIONAL FUNDING IS TO BE MADE BY LOAN, SPECIFICATION OF THE APPLICABLE INTEREST RATE AND TERMS OF REPAYMENT.

(D) THE APPLICATION FOR ADDITIONAL PUBLIC FUNDING SHALL BE FILED WITH AND AVAILABLE FOR PUBLIC INSPECTION AND COPYING IN ACCORDANCE WITH SECTION 1771.05 of the Revised Code AT LEAST THIRTY DAYS PRIOR TO THE PUBLIC HEARING REQUIRED BY DIVISION (B) OF THIS SECTION. THE LEGISLATIVE AUTHORITY SHALL PUBLISH NOTICE OF THE TIME AND PLACE OF THE PUBLIC HEARING IN ACCORDANCE WITH DIVISION (A) OF SECTION 1771.09 OF THE REVISED CODE, TOGETHER WITH A STATEMENT OF THE AMOUNT OF ADDITIONAL PUBLIC FUNDS TO BE LOANED OR CONTRIBUTED BY THE MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE TO THE GOVERNMENTAL CABLE OPERATOR, A STATEMENT THAT THE APPLICATION FOR ADDITIONAL PUBLIC FUNDING IS AVAILABLE FOR PUBLIC INSPECTION AND COPYING IN ACCORDANCE WITH DIVISION (B) OF SECTION 1771.09 of the Revised Code, AND A STATEMENT OF THE LOCATION AND OFFICE HOURS OF THE RELEVANT OFFICE UNDER THAT DIVISION.

Sec. 1771.08. (A) NO MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE SHALL MAKE LOANS AND CONTRIBUTIONS TO THE CAPITAL OF A GOVERNMENTAL CABLE OPERATOR TO THE EXTENT AUTHORIZED UNDER SECTIONS 1771.01 TO 1771.07 OF THE REVISED CODE EXCEPT IN CASH OR IN THE FORM OF PROPERTY HAVING A FAIR MARKET VALUE IN THE AGGREGATE NOT IN EXCESS OF THE UNRESTRICTED FUND BALANCE OF THE MUNICIPAL CORPORATION, TOWNSHIP, OR AFFILIATE AT THE TIME OF THE LOAN OR CONTRIBUTION. NO SUCH LOAN OR CONTRIBUTION SHALL BE FINANCED, IN WHOLE OR IN PART, WITH DEBT OR ANY OBLIGATION OF THE MUNICIPAL CORPORATION, TOWNSHIP, OR AFFILIATE, WHETHER THE OBLIGATION IS PAYABLE FROM GENERAL TAX REVENUES OR IS SECURED BY THE FULL FAITH AND CREDIT OF THE MUNICIPAL CORPORATION, TOWNSHIP, OR AFFILIATE OR OTHERWISE. NO MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE SHALL GUARANTEE ANY OBLIGATION OF THE GOVERNMENTAL CABLE OPERATOR, OR PLEDGE PROPERTY OR REVENUES, WHETHER PUBLIC PROPERTY OR OTHERWISE OR GENERAL TAX REVENUES OR OTHERWISE, AS SECURITY FOR ANY OBLIGATION OF THE GOVERNMENTAL CABLE OPERATOR.

(B) NO MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE SHALL MAKE A LOAN TO, PROVIDE SERVICES TO, OR PERMIT THE USE OF PROPERTY IT OWNS OR OPERATES BY, A GOVERNMENTAL CABLE OPERATOR EXCEPT PURSUANT TO A WRITTEN AGREEMENT THAT PROVIDES FOR REPAYMENT OF THE LOAN, PAYMENT FOR THOSE SERVICES, OR USE AT THE FAIR MARKET RATE AND THAT ESTABLISHES SUCH OTHER TERMS AND CONDITIONS AS WOULD EXIST IN AN ARMS-LENGTH TRANSACTION FOR THE MAKING AND REPAYMENT OF SUCH A LOAN, THE PROVISION OF SUCH SERVICES, OR THE USE OF SUCH PROPERTY BY AN UNAFFILIATED THIRD PARTY. NO MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE, DIRECTLY OR INDIRECTLY, BY ANY DEVICE OR METHOD, SHALL CHARGE OR RECEIVE A DIFFERENT AMOUNT FROM A GOVERNMENTAL CABLE OPERATOR THAN IT CHARGES OR RECEIVES FROM ANY OTHER PERSON FOR A LIKE AND CONTEMPORANEOUS RIGHT, INTEREST, PRIVILEGE, USE, OR SERVICE UNDER SUBSTANTIALLY THE SAME CIRCUMSTANCES AND CONDITIONS. NO MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE, DIRECTLY OR INDIRECTLY, BY ANY DEVICE OR METHOD, SHALL USE ANY SOVEREIGN AUTHORITY IT HAS UNDER THE LAWS OF THIS STATE FOR THE BENEFIT OF A GOVERNMENTAL CABLE OPERATOR IN PREFERENCE TO ANY OTHER PERSON SIMILARLY SITUATED.

(C) NOTHING IN DIVISION (A) OR (B) OF THIS SECTION APPLIES WITH RESPECT TO A LOAN, CONTRIBUTION, GUARANTEE, PLEDGE, PROVISION OF SERVICES, OR USE OF PROPERTY AUTHORIZED AND IN EFFECT OR RENDERED PRIOR TO THE EFFECTIVE DATE OF THIS SECTION.

Sec. 1771.09. (A) ANY NOTICE REQUIRED UNDER SECTIONS 1771.01 TO 1771.08 OF THE REVISED CODE, WHETHER IN CONNECTION WITH THE FORMATION OF A GOVERNMENTAL CABLE OPERATOR OR SUBSEQUENTLY, SHALL BE PUBLISHED IN A NEWSPAPER OF GENERAL CIRCULATION WITHIN THE JURISDICTIONAL BOUNDARIES OF THE MUNICIPAL CORPORATION OR TOWNSHIP AT LEAST TWICE PRIOR TO THE HEARING DATE, THE FIRST PUBLICATION OCCURRING NOT LESS THAN THIRTY DAYS, AND THE SECOND OCCURRING NOT MORE THAN SEVEN DAYS, PRIOR TO THE HEARING DATE. THE PUBLICATION SHALL BE MADE IN THE BODY TYPE OF THE NEWSPAPER UNDER HEADLINES IN EIGHTEEN POINT TYPE. THE CHIEF LEGAL OFFICER OF THE POLITICAL SUBDIVISION SHALL REVIEW THE NOTICE PRIOR TO FORWARDING IT FOR PUBLICATION, TO ENSURE THAT THE NOTICE IS LEGALLY ACCURATE AND SUFFICIENT. NO NEWSPAPER SHALL BE PAID A HIGHER PRICE FOR A PUBLICATION UNDER SECTIONS 1771.01 TO 1771.11 of the Revised Code THAN ITS MAXIMUM BONA FIDE COMMERCIAL RATE.

(B) ANY DOCUMENT REQUIRED UNDER SECTIONS 1771.01 TO 1771.11 of the Revised Code TO BE AVAILABLE FOR PUBLIC INSPECTION AND COPYING, WHETHER IN CONNECTION WITH THE FORMATION OF A GOVERNMENTAL CABLE OPERATOR OR SUBSEQUENTLY, SHALL BE FILED WITH, AND SHALL BE SO AVAILABLE IN ACCORDANCE WITH SECTION 149.43 of the Revised Code IN, THE OFFICE OF THE CLERK OF THE MUNICIPAL CORPORATION OR TOWNSHIP OR, IF NO SUCH OFFICE EXISTS, SUCH OTHER OFFICE AS THE APPLICABLE LEGISLATIVE ACTION UNDER SECTIONS 1771.01 TO 1771.11 of the Revised Code SHALL SPECIFY.

Sec. 1771.10. (A) NOTWITHSTANDING ANY LAW OF THIS STATE TO THE CONTRARY, NO MUNICIPAL CORPORATION OR TOWNSHIP SHALL BE THE FRANCHISING AUTHORITY FOR A GOVERNMENTAL CABLE OPERATOR OF WHICH THE MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE IS THE SOLE SHAREHOLDER OR MEMBER.

(B) NO GOVERNMENTAL CABLE OPERATOR SHALL PROVIDE CABLE SERVICE, OVER A CABLE SYSTEM IN THIS STATE, EXCLUSIVELY TO SUBSCRIBERS WITHIN THE JURISDICTIONAL BOUNDARIES OF THE MUNICIPAL CORPORATION OR TOWNSHIP THAT IS THE SOLE SHAREHOLDER OR MEMBER OF THE GOVERNMENTAL CABLE OPERATOR OR THE MUNICIPAL CORPORATION OR TOWNSHIP THE AFFILIATE OF WHICH IS THE SOLE SHAREHOLDER OR MEMBER, WITHOUT FIRST OBTAINING A FRANCHISE FROM THE COMMISSION PURSUANT TO COMMISSION ORDER. THE COMMISSION SHALL BE THE SOLE FRANCHISING AUTHORITY FOR SUCH A GOVERNMENTAL CABLE OPERATOR, AND THE COMMISSION IS HEREBY VESTED WITH THE POWER AND JURISDICTION TO SUPERVISE AND REGULATE ANY SUCH GOVERNMENTAL CABLE OPERATOR PURSUANT TO THIS SECTION AND CONSISTENT WITH THE "TELECOMMUNICATIONS ACT OF 1996," PUB. L. NO. 104-104, 110 STAT. 56.

THE APPLICATION FOR A FRANCHISE FROM THE COMMISSION SHALL BE IN SUCH FORM AS THE COMMISSION SHALL PRESCRIBE. IN DETERMINING WHETHER TO GRANT OR DENY A FRANCHISE TO A GOVERNMENTAL CABLE OPERATOR, THE COMMISSION SHALL CONSIDER ALL OF THE FOLLOWING FACTORS:

(1) THE TECHNICAL, MANAGERIAL, AND FINANCIAL CAPABILITIES OF THE GOVERNMENTAL CABLE OPERATOR TO PROVIDE CABLE SERVICE OVER A CABLE SYSTEM;

(2) THE QUALITY OF CABLE SERVICE TO BE OFFERED BY THE GOVERNMENTAL CABLE OPERATOR;

(3) THE TECHNICAL AND PERFORMANCE QUALITY OF THE EQUIPMENT TO BE USED;

(4) THE PROPOSED RATES TO SUBSCRIBERS OF THE GOVERNMENTAL CABLE OPERATOR;

(5) ANY OTHER FACTORS DETERMINED PERTINENT BY THE COMMISSION.

(C) THE COMMISSION, IN AN ORDER GRANTING A FRANCHISE UNDER THIS SECTION, SHALL SET THE TERMS OF THE FRANCHISE, SUCH THAT THE TERMS ARE CONSISTENT WITH THE POLICY SPECIFIED IN SECTION 1771.02 OF THE REVISED CODE. IN SETTING TERMS CONSISTENT WITH THAT POLICY, THE COMMISSION SHALL CONSIDER ALL RELEVANT FACTORS OR OBJECTIVES, INCLUDING, BUT NOT LIMITED TO, ALL OF THE FOLLOWING:

(1) THE TERMS AND CONDITIONS OF FRANCHISES ISSUED TO OTHER CABLE OPERATORS PROVIDING CABLE SERVICE OVER CABLE SYSTEMS CONSTRUCTED AND OPERATED WITHIN THE JURISDICTIONAL BOUNDARIES OF THE MUNICIPAL CORPORATION OR TOWNSHIP;

(2) MAINTENANCE OF JUST AND REASONABLE RATES, RENTALS, AND CHARGES;

(3) ENCOURAGEMENT OF INNOVATION AND TECHNOLOGICAL ADVANCES;

(4) PROMOTION OF DIVERSITY AND OPTIONS;

(5) RECOGNITION OF MARKET FORCES;

(6) PROTECTION OF CONSUMERS;

(7) PROMOTION OF THE PUBLIC WELFARE THROUGH PUBLIC WELFARE-ENHANCING PROVISIONS;

(8) RECOGNITION OF EFFICIENT BUSINESS PRACTICES.

(D) IN ADDITION TO THE REQUIREMENTS OF DIVISION (C) OF THIS SECTION, THE TERMS OF THE FRANCHISE SHALL INCLUDE ALL OF THE FOLLOWING:

(1) A FRANCHISE FEE DETERMINED AS A PERCENTAGE OF THE GROSS REVENUES OF THE GOVERNMENTAL CABLE OPERATOR FROM THE PROVISION OF CABLE SERVICES WITHIN THE JURISDICTIONAL BOUNDARIES OF THE MUNICIPAL CORPORATION OR TOWNSHIP;

(2) CUSTOMER SERVICE REQUIREMENTS AND CONSUMER PROTECTION PROVISIONS;

(3) OBLIGATIONS WITH RESPECT TO OR IN LIEU OF THE PROVISION OF PUBLIC, EDUCATIONAL, OR GOVERNMENTAL ACCESS FACILITIES AND THE PROVISION OF REDUCED-COST SERVICES TO PUBLIC, EDUCATIONAL, OR GOVERNMENTAL ENTITIES COMMENSURATE WITH THE INTERESTS OF THE COMMUNITY AND THE POLICY SPECIFIED IN SECTION 1771.02 OF THE REVISED CODE, AND OBLIGATIONS WITH RESPECT TO OR IN LIEU OF THE PROVISION OF ACCESS TO CABLE SERVICE TO ALL HOUSEHOLDS IN THE FRANCHISE AREA.

(E) FRANCHISE FEES PAID UNDER THIS SECTION SHALL BE DEPOSITED INTO THE STATE TREASURY TO THE CREDIT OF THE GENERAL REVENUE FUND. ANY SUCH AMOUNTS PAID INTO THE GENERAL REVENUE FUND, BUT NOT EXPENDED BY THE COMMISSION FOR THE PURPOSES OF ADMINISTERING THIS SECTION, SHALL BE CREDITED RATABLY BY THE COMMISSION, AFTER FIRST DEDUCTING ANY DEFICITS ACCUMULATED FROM PRIOR YEARS, TO EACH MUNICIPAL CORPORATION OR TOWNSHIP HAVING WITHIN ITS JURISDICTIONAL BOUNDARIES A GOVERNMENTAL CABLE OPERATOR WITH A FRANCHISE PURSUANT TO THIS SECTION. SUCH MUNICIPAL CORPORATION OR TOWNSHIP OR ITS AFFILIATE SHALL NOT USE MONEYS RECEIVED UNDER THIS DIVISION FOR A LOAN OR CAPITAL CONTRIBUTION TO A GOVERNMENTAL CABLE OPERATOR EXCEPT IN ACCORDANCE WITH SECTIONS 1771.01 TO 1771.11 OF THE REVISED CODE.

(F) THE COMMISSION SHALL ADOPT RULES TO CARRY OUT THIS SECTION. THE RULES SHALL INCLUDE PROCEDURES FOR PUBLIC HEARINGS ON FRANCHISE APPLICATIONS AND ON THE TERMS OF FRANCHISES GRANTED BY THE COMMISSION; FOR ADDRESSING SUBSCRIBER AND COMMUNITY COMPLAINTS REGARDING A FRANCHISEE UNDER THIS SECTION; AND FOR PERIODIC REPORTING, AUDIT, AND INSPECTION REQUIREMENTS FOR FRANCHISEES.

(G) NOTHING IN SECTIONS 1771.01 TO 1771.11 of the Revised Code AUTHORIZES REGULATION, AS A COMMON CARRIER OR UTILITY, OF A CABLE SYSTEM PROVIDING CABLE SERVICE TO THE EXTENT THAT REGULATION IS PROHIBITED BY 47 U.S.C.A. 541(c).

Sec. 1771.11. A GOVERNMENTAL CABLE OPERATOR SHALL BE DEEMED, FOR TAXATION AND OTHER PURPOSES UNDER THE LAWS OF THIS STATE, TO BE ENGAGED IN A BUSINESS ACTIVITY. A GOVERNMENTAL CABLE OPERATOR SHALL NOT BE DEEMED UNDER THE LAWS OF THIS STATE TO BE A POLITICAL SUBDIVISION FOR ANY PURPOSE WHATSOEVER.


Sec. 5701.08. As used in Title LVII of the Revised Code:

(A) Personal property is "used" within the meaning of "used in business" when employed or utilized in connection with ordinary or special operations, when acquired or held as means or instruments for carrying on the business, when kept and maintained as a part of a plant capable of operation, whether actually in operation or not, or when stored or kept on hand as material, parts, products, or merchandise. Machinery and equipment classifiable upon completion as personal property while under construction or installation to become part of a new or existing plant or other facility is not considered to be "used" by the owner of such plant or other facility within the meaning of "used in business" until such machinery and equipment is installed and in operation or capable of operation in the business for which acquired. Agricultural products in storage in a grain elevator, a warehouse, or a place of storage which products are subject to control of the United States government and are to be shipped on order of the United States government are not used in business in this state.

(B) Merchandise or agricultural products shipped from outside this state and held in this state in a warehouse or a place of storage without further manufacturing or processing and for storage only and for shipment outside this state are not used in business in this state. Such property qualifies for this exception if division (B)(1) or (2) of this section applies:

(1) During any period that a person owns such property in this state:

(a) The property is to be shipped from a warehouse or place of storage in this state to the owner of the property or persons other than customers at locations outside this state for use, processing, or sale; or

(b) The property is located in public or private warehousing facilities in this state which are not subject to the control of or under the supervision of the owner of the property or manned by its employees and from which the property is to be shipped to any person, including a customer, outside this state.

(2) During the first twenty-four calendar months that a person first owns such property in this state, the property is held in a warehouse or place of storage in this state located within one mile of the closest boundary of an airport, and is shipped to any person, including a customer, outside this state.

For the purposes of division (B)(2) of this section, "airport" means any airport, as defined in division (C) of section 4561.01 of the Revised Code, which is approved by the department of transportation under section 4561.11 of the Revised Code to be used for commercial purposes, is regularly served by only one air carrier authorized to do so under 14 C.F.R., and is not a public airport as defined in 49 U.S.C. Appx. 2202(a)(17) as existing on the effective date of this amendment.

(3) For property that may meet the condition for the exception provided in division (B)(2) of this section, if it is not known at the conclusion of a reporting period whether the property yet qualifies for such exception, the owner of such property shall return it for taxation. If it is later determined that the returned property does so qualify, the owner may apply for a final assessment and refund on the property as provided in section 5711.26 of the Revised Code.

(C) Leased property used by the lessee exclusively for agricultural purposes and new or used machinery and equipment and accessories therefor that are designed and built for agricultural use and owned by a merchant as defined in section 5711.15 of the Revised Code are not considered to be "used" within the meaning of "used in business."

(D) Moneys, deposits, investments, accounts receivable, and prepaid items, and other taxable intangibles are "used" when they or the avails thereof are being applied, or are intended to be applied, in the conduct of the business, whether in this state or elsewhere.

(E) PERSONAL PROPERTY THAT IS USED BY A CABLE OPERATOR OR GOVERNMENTAL CABLE OPERATOR TO PROVIDE CABLE SERVICE OVER A CABLE SYSTEM, AS THOSE TERMS ARE DEFINED IN SECTION 1771.01 of the Revised Code, IS USED IN BUSINESS.

(F) "Business" includes all enterprises, except agriculture, conducted for gain, profit, or income and extends to personal service occupations AND TO CABLE OPERATORS AND GOVERNMENTAL CABLE OPERATORS AS THOSE TERMS ARE DEFINED IN SECTION 1771.01 of the Revised Code.

Sec. 5709.08. (A) Real or personal property belonging to the state or United States used exclusively for a public purpose, and public property used exclusively for a public purpose, shall be exempt from taxation. Real and personal property, when devoted to public use and not held for pecuniary profit, owned by an adjoining state or any political subdivision or agency of such adjoining state, which would be exempt from taxation if owned by the state of Ohio or a political subdivision or agency thereof, shall be exempt from taxation providing that such adjoining state exempts from taxation real and personal property devoted to public use and not held for pecuniary profit, owned by the state of Ohio or any political subdivision or agency thereof, which would be exempt from taxation if owned by the adjoining state or political subdivision or agency thereof.

(B) NOTHING IN DIVISION (A) OF THIS SECTION AUTHORIZES AN EXEMPTION FOR ANY REAL OR PERSONAL PROPERTY OWNED, OPERATED, OR USED BY A CABLE OPERATOR OR A GOVERNMENTAL CABLE OPERATOR AS THOSE TERMS ARE DEFINED IN SECTION 1771.01 of the Revised Code, OR AUTHORIZES AN EXEMPTION FOR ANY PERSONAL PROPERTY USED IN BUSINESS AS DEFINED IN DIVISION (E) OF SECTION 5701.08 of the Revised Code.

Sec. 5709.10. (A) Market houses and other houses or halls, public squares, or other public grounds of a municipal corporation or township used exclusively for public purposes or erected by taxation for such purposes, land and multi-level parking structures used exclusively for a public purpose and owned and operated by a municipal corporation under section 717.05 of the Revised Code that charges no fee for the privilege of parking thereon, property used as a county fairgrounds that is owned by the board of county commissioners or by a county agricultural society, and property of housing authorities created and organized under and for the purposes of sections 3735.27 to 3735.50 of the Revised Code, which property is hereby declared to be public property used exclusively for a public purpose, notwithstanding that parts thereof may be lawfully leased, shall be exempt from taxation.

(B) NOTHING IN DIVISION (A) OF THIS SECTION AUTHORIZES AN EXEMPTION FOR ANY REAL OR PERSONAL PROPERTY OWNED, OPERATED, OR USED BY A CABLE OPERATOR OR A GOVERNMENTAL CABLE OPERATOR AS THOSE TERMS ARE DEFINED IN SECTION 1771.01 of the Revised Code, OR AUTHORIZES AN EXEMPTION FOR ANY PERSONAL PROPERTY USED IN BUSINESS AS DEFINED IN DIVISION (E) OF SECTION 5701.08 of the Revised Code.

Sec. 5709.11. (A) Works, machinery, pipe lines, and fixtures belonging to a municipal corporation and used exclusively for conveying water to it, or for heating or lighting it, shall be exempt from taxation.

(B) NOTHING IN DIVISION (A) OF THIS SECTION AUTHORIZES AN EXEMPTION FOR ANY REAL OR PERSONAL PROPERTY OWNED, OPERATED, OR USED BY A CABLE OPERATOR OR A GOVERNMENTAL CABLE OPERATOR AS THOSE TERMS ARE DEFINED IN SECTION 1771.01 of the Revised Code, OR AUTHORIZES AN EXEMPTION FOR ANY PERSONAL PROPERTY USED IN BUSINESS AS DEFINED IN DIVISION (E) OF SECTION 5701.08 of the Revised Code.

Sec. 5709.12. (A) As used in this section, "independent living facilities" means any residential housing facilities and related property that are not a nursing home, residential care facility, or adult care facility as defined in division (A) of section 5701.13 of the Revised Code.

(B) Lands, houses, and other buildings belonging to a county, township, or municipal corporation and used exclusively for the accommodation or support of the poor, or leased to the state or any political subdivision for public purposes shall be exempt from taxation. Real and tangible personal property belonging to institutions that is used exclusively for charitable purposes shall be exempt from taxation. All property owned and used by a nonprofit organization exclusively for a home for the aged, as defined in section 5701.13 of the Revised Code, also shall be exempt from taxation.

(C) If a home for the aged is operated in conjunction with or at the same site as independent living facilities, the exemption granted in division (B) of this section shall include kitchen, dining room, clinic, entry ways, maintenance and storage areas, and land necessary for access commonly used by both residents of the home for the aged and residents of the independent living facilities. Other facilities commonly used by both residents of the home for the aged and residents of independent living units shall be exempt from taxation only if the other facilities are used primarily by the residents of the home for the aged. Vacant land currently unused by the home, and independent living facilities and the lands connected with them are not exempt from taxation. Except as provided in division (A) of section 5709.121 of the Revised Code, property of a home leased for nonresidential purposes is not exempt from taxation.

(D) A private corporation established under federal law, as defined in 36 U.S.C. 1101, Pub. L. 102-199, 105 Stat. 1629, as amended, the objects of which include encouraging the advancement of science generally, or of a particular branch of science, the promotion of scientific research, the improvement of the qualifications and usefulness of scientists, or the increase and diffusion of scientific knowledge is conclusively presumed to be a charitable or educational institution. A private corporation established as a nonprofit corporation under the laws of a state, that is exempt from federal income taxation under section 501(c)(3) of the Internal Revenue Code of 1986, 100 Stat. 2085, 26 U.S.C.A. 1, as amended, and has as its principal purpose one or more of the foregoing objects, also is conclusively presumed to be a charitable or educational institution.

The fact that an organization described in this division operates in a manner that results in an excess of revenues over expenses shall not be used to deny the exemption granted by this section, provided such excess is used, or is held for use, for exempt purposes or to establish a reserve against future contingencies; and, provided further, that such excess may not be distributed to individual persons or to entities that would not be entitled to the tax exemptions provided by this chapter. Nor shall the fact that any scientific information diffused by the organization is of particular interest or benefit to any of its individual members be used to deny the exemption granted by this section, provided that such scientific information is available to the public for purchase or otherwise.

When a private corporation as described in this division sells all or any portion of a tract, lot, or parcel of real estate that has been exempt from taxation under this section and section 5709.121 of the Revised Code, the portion sold shall be restored to the tax list for the year following the year of the sale and a charge shall be levied against the sold property in an amount equal to the tax savings on such property during the four tax years preceding the year the property is placed on the tax list. The tax savings equals the amount of the additional taxes that would have been levied if such property had not been exempt from taxation.

The charge constitutes a lien of the state upon such property as of the first day of January of the tax year in which the charge is levied and continues until discharged as provided by law. The charge may also be remitted for all or any portion of such property that the tax commissioner determines is entitled to exemption from real property taxation for the year such property is restored to the tax list under any provision of the Revised Code, other than sections 725.02, 1728.10, 3735.67, 5709.40, 5709.41, 5709.62, 5709.63, 5709.71, 5709.73, 5709.78, and 5709.84 of the Revised Code, upon an application for exemption covering the year such property is restored to the tax list filed under section 5715.27 of the Revised Code.

(E) NOTHING IN DIVISIONS (A) TO (D) OF THIS SECTION AUTHORIZES AN EXEMPTION FOR ANY REAL OR PERSONAL PROPERTY OWNED, OPERATED, OR USED BY A CABLE OPERATOR OR A GOVERNMENTAL CABLE OPERATOR AS THOSE TERMS ARE DEFINED IN SECTION 1771.01 of the Revised Code, OR AUTHORIZES AN EXEMPTION FOR ANY PERSONAL PROPERTY USED IN BUSINESS AS DEFINED IN DIVISION (E) OF SECTION 5701.08 of the Revised Code.

Sec. 5709.121. Real property and tangible personal property belonging to a charitable or educational institution or to the state or a political subdivision, shall be considered as used exclusively for charitable or public purposes by such institution, the state, or political subdivision, if it meets one of the following requirements:

(A) It is used by such institution, the state, or political subdivision, or by one or more other such institutions, the state, or political subdivisions under a lease, sublease, or other contractual arrangement:

(1) As a community or area center in which presentations in music, dramatics, the arts, and related fields are made in order to foster public interest and education therein;

(2) For other charitable, educational, or public purposes;

(B) It is made available under the direction or control of such institution, the state, or political subdivision for use in furtherance of or incidental to its charitable, edcuational EDUCATIONAL, or public purposes and not with the view to profit.

(C) It is used by an organization described in division (D) of section 5709.12 of the Revised Code.

NOTHING IN THIS SECTION AUTHORIZES AN EXEMPTION FOR ANY REAL OR PERSONAL PROPERTY OWNED, OPERATED, OR USED BY A CABLE OPERATOR OR A GOVERNMENTAL CABLE OPERATOR AS THOSE TERMS ARE DEFINED IN SECTION 1771.01 of the Revised Code, OR AUTHORIZES AN EXEMPTION FOR ANY PERSONAL PROPERTY USED IN BUSINESS AS DEFINED IN DIVISION (E) OF SECTION 5701.08 of the Revised Code.

Sec. 5733.01. (A) The tax provided by this chapter for domestic corporations shall be the amount charged against each corporation organized for profit under the laws of this state and, each nonprofit corporation organized pursuant to Chapter 1729. of the Revised Code, AND EACH CORPORATION THAT IS A CABLE OPERATOR OR GOVERNMENTAL CABLE OPERATOR AS THOSE TERMS ARE DEFINED IN SECTION 1771.01 of the Revised Code, except as provided in sections 5733.09 and 5733.10 of the Revised Code, for the privilege of exercising its franchise during the calendar year in which that amount is payable, and the. THE tax provided by this chapter for foreign corporations shall be the amount charged against each corporation organized for profit and each nonprofit corporation organized or operating in the same or similar manner as nonprofit corporations organized under Chapter 1729. of the Revised Code, under the laws of any state or country other than this state, except as provided in sections 5733.09 and 5733.10 of the Revised Code, for the privilege of doing business in this state, owning or using a part or all of its capital or property in this state, holding a certificate of compliance with the laws of this state authorizing it to do business in this state, or otherwise having nexus in or with this state under the Constitution of the United States, during the calendar year in which that amount is payable.

(B) A corporation is subject to the tax imposed by section 5733.06 of the Revised Code for each calendar year that it is so organized, doing business, owning or using a part or all of its capital or property, holding a certificate of compliance, or otherwise having nexus in or with this state under the Constitution of the United States, on the first day of January of that calendar year.

(C) Any corporation subject to this chapter that is not subject to the federal income tax shall file its returns and compute its tax liability as required by this chapter in the same manner as if that corporation were subject to the federal income tax.

(D) For purposes of this chapter, a federally chartered financial institution shall be deemed to be organized under the laws of the state within which its principal office is located.

(E) Any person, as defined in section 5701.01 of the Revised Code, shall be treated as a corporation for purposes of this chapter if the person is classified for federal income tax purposes as an association taxable as a corporation.

Sec. 5739.01. As used in this chapter:

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

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

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

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

(3) All transactions by which:

(a) An item of tangible personal property is or is to be repaired, except property, the purchase of which would be exempt from the tax imposed by section 5739.02 of the Revised Code;

(b) An item of tangible personal property is or is to be installed, except property, the purchase of which would be exempt from the tax imposed by section 5739.02 of the Revised Code or property that is or is to be incorporated into and will become a part of a production, transmission, transportation, or distribution system for the delivery of a public utility service;

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

(d) Industrial laundry cleaning services are or are to be provided;

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

(f) Telecommunications service is provided that originates or terminates in this state and is charged in the records of the telecommunications service vendor to the consumer's telephone number or account in this state, or that both originates and terminates in this state;

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

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

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

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

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

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

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

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

(o) Recreation and sports club service is or is to be provided.

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

(5) The production or fabrication of tangible personal property for a consideration for consumers who furnish either directly or indirectly the materials used in the production of fabrication work; and include the furnishing, preparing, or serving for a consideration of any tangible personal property consumed on the premises of the person furnishing, preparing, or serving such tangible personal property. Except as provided in section 5739.03 of the Revised Code, a construction contract pursuant to which tangible personal property is or is to be incorporated into a structure or improvement on and becoming a part of real property is not a sale of such tangible personal property. The construction contractor is the consumer of such tangible personal property, provided that the sale and installation of carpeting, the sale and installation of agricultural land tile, the sale and erection or installation of portable grain bins, or the provision of landscaping and lawn care service and the transfer of property as part of such service is never a construction contract. The transfer of copyrighted motion picture films for exhibition purposes is not a sale, except such films as are used solely for advertising purposes. Other than as provided in this section, "sale" and "selling" do not include professional, insurance, or personal service transactions which involve the transfer of tangible personal property as an inconsequential element, for which no separate charges are made.

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

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

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

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

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

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

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

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

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

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

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

(b) In the case of a person who produces, rather than purchases, printed matter for the purpose of distributing it or having it distributed to the public or to a designated segment of the public, free of charge, that person is the consumer of all tangible personal property and services purchased for use or consumption in the production of that printed matter. That person is not entitled to claim exception under division (E)(8) of this section for any material incorporated into the printed matter or any equipment, supplies, or services primarily used to produce the printed matter.

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

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

(E) "Retail sale" and "sales at retail" include all sales except those in which the purpose of the consumer is:

(1) To resell the thing transferred or benefit of the service provided, by a person engaging in business, in the form in which the same is, or is to be, received by the person;

(2) To incorporate the thing transferred as a material or a part, into tangible personal property to be produced for sale by manufacturing, assembling, processing, or refining, or to use or consume the thing transferred directly in producing a product for sale by mining, including without limitation the extraction from the earth of all substances which are classed geologically as minerals, production of crude oil and natural gas, farming, agriculture, horticulture, or floriculture, and persons engaged in rendering farming, agricultural, horticultural, or floricultural services, and services in the exploration for, and production of, crude oil and natural gas, for others are deemed engaged directly in farming, agriculture, horticulture, and floriculture, or exploration for, and production of, crude oil and natural gas; directly in the rendition of a public utility service, except that the sales tax levied by section 5739.02 of the Revised Code shall be collected upon all meals, drinks, and food for human consumption sold upon Pullman and railroad coaches. This paragraph does not exempt or except from "retail sale" or "sales at retail" the sale of tangible personal property that is to be incorporated into a structure or improvement to real property.

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

(4) To use or consume the thing transferred in the process of reclamation as required by Chapters 1513. and 1514. of the Revised Code;

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

(6) To use or consume the thing directly in commercial fishing;

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

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

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

(10) To use the benefit of a warranty, maintenance or service contract, or similar agreement, as defined in division (B)(7) of this section, to repair or maintain tangible personal property, if all of the property that is the subject of the warranty, contract, or agreement would be exempt on its purchase from the tax imposed by section 5739.02 of the Revised Code;

(11) To use the thing transferred as qualified research and development equipment;

(12) To use or consume the thing transferred primarily in storing, transporting, mailing, or otherwise handling purchased sales inventory in a warehouse, distribution center, or similar facility when the inventory is primarily distributed outside this state to retail stores of the person who owns or controls the warehouse, distribution center, or similar facility, to retail stores of an affiliated group of which that person is a member, or by means of direct marketing. Division (E)(12) of this section does not apply to motor vehicles registered for operation on the public highways. As used in division (E)(12) of this section, "affiliated group" has the same meaning as in division (B)(3)(e) of this section and "direct marketing" has the same meaning as in division (B)(37) of section 5739.02 of the Revised Code.

(13) To use or consume the thing transferred to fulfill a contractual obligation incurred by a warrantor pursuant to a warranty provided as a part of the price of the tangible personal property sold or by a vendor of a warranty, maintenance or service contract, or similar agreement the provision of which is defined as a sale under division (B)(7) of this section;

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

(15) To use tangible personal property to perform a service listed in division (B)(3) of this section, if the property is or is to be permanently transferred to the consumer of the service as an integral part of the performance of the service.

As used in division (E) of this section, "thing" includes all transactions included in divisions (B)(3)(a), (b), and (e) of this section.

Sales conducted through a coin-operated device that activates vacuum equipment or equipment that dispenses water, whether or not in combination with soap or other cleaning agents or wax, to the consumer for the consumer's use on the premises in washing, cleaning, or waxing a motor vehicle, provided no other personal property or personal service is provided as part of the transaction, are not retail sales or sales at retail.

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

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

(H)(1) "Price," except as provided in divisions (H)(2) and (3) of this section, means the aggregate value in money of anything paid or delivered, or promised to be paid or delivered, in the complete performance of a retail sale, without any deduction on account of the cost of the property sold, cost of materials used, labor or service cost, interest, discount paid or allowed after the sale is consummated, or any other expense. If the retail sale consists of the rental or lease of tangible personal property, "price" means the aggregate value in money of anything paid or delivered, or promised to be paid or delivered, in the complete performance of the rental or lease, without any deduction for tax, interest, labor or service charge, damage liability waiver, termination or damage charge, discount paid or allowed after the lease is consummated, or any other expense. The sales tax shall be calculated and collected by the lessor on each payment made by the lessee. Price does not include the consideration received as a deposit refundable to the consumer upon return of a beverage container, the consideration received as a deposit on a carton or case that is used for such returnable containers, or the consideration received as a refundable security deposit for the use of tangible personal property to the extent that it actually is refunded, if the consideration for such refundable deposit is separately stated from the consideration received or to be received for the tangible personal property transferred in the retail sale. Such separation must appear in the sales agreement or on the initial invoice or initial billing rendered by the vendor to the consumer. Price is the amount received inclusive of the tax, provided the vendor establishes to the satisfaction of the tax commissioner that the tax was added to the price. When the price includes both a charge for tangible personal property and a charge for providing a service and the sale of the property and the charge for the service are separately taxable, or have a separately determinable tax status, the price shall be separately stated for each such charge so the tax can be correctly computed and charged.

The tax collected by the vendor from the consumer under this chapter is not part of the price, but is a tax collection for the benefit of the state and of counties levying an additional sales tax pursuant to section 5739.021 or 5739.026 of the Revised Code and of transit authorities levying an additional sales tax pursuant to section 5739.023 of the Revised Code. Except for the discount authorized in section 5739.12 of the Revised Code, no person other than the state or such a county or transit authority shall derive any benefit from the collection or payment of such tax.

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

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

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

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

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

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

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

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

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

(P) "Used directly in the rendition of a public utility service" means that property which is to be incorporated into and will become a part of the consumer's production, transmission, transportation, or distribution system and which retains its classification as tangible personal property after such incorporation; fuel or power used in the production, transmission, transportation, or distribution system; and tangible personal property used in the repair and maintenance of the production, transmission, transportation or distribution system, including only such motor vehicles as are specially designed and equipped for such use. Tangible personal property and services used primarily in providing highway transportation for hire are not used in providing a public utility service as defined in this division.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(b) Analyzing business policies and procedures;

(c) Identifying management information needs;

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

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

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

(g) Testing of business procedures;

(h) Training personnel in business procedure applications;

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

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

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

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

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

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

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

(AA) "Telecommunications service" means the transmission of any interactive, two-way electromagnetic communications, including voice, image, data, and information, through the use of any medium such as wires, cables, microwaves, cellular radio, radio waves, light waves, or any combination of those or similar media. "Telecommunications service" includes message toll service even though the vendor provides the message toll service by means of wide area transmission type service or private communications service purchased from another telecommunications service provider, but does not include any of the following:

(1) Sales of incoming or outgoing wide area transmission service or wide area transmission type service, including eight hundred or eight-hundred-type service, to the person contracting for the receipt of that service;

(2) Sales of private communications service to the person contracting for the receipt of that service that entitles the purchaser to exclusive or priority use of a communications channel or group of channels between exchanges;

(3) Sales of telecommunications service by companies subject to the excise tax imposed by Chapter 5727. of the Revised Code;

(4) Sales of telecommunications service to a provider of telecommunications service, including access services, for use in providing telecommunications service;

(5) Value added nonvoice services in which computer processing applications are used to act on the form, content, code, or protocol of the information to be transmitted;

(6) Transmission of interactive video programming by a cable television system as defined in section 505.90 of the Revised Code, INCLUDING SUCH TRANSMISSION BY A CABLE OPERATOR OR A GOVERNMENTAL CABLE OPERATOR AS THOSE TERMS ARE DEFINED IN SECTION 1771.01 of the Revised Code.

(BB) "Industrial laundry cleaning services" means removing soil or dirt from or supplying towels, linens, or articles of clothing that belong to others and are used in a trade or business.

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

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

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

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

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

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

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

(JJ) "Employment service" means providing or supplying personnel, on a temporary or long-term basis, to perform work or labor under the supervision or control of another, when the personnel so supplied receive their wages, salary, or other compensation from the provider of the service. "Employment service" does not include:

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

(2) Medical and health care services.;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(A) The tax shall be collected pursuant to the schedules in section 5739.025 of the Revised Code.

The tax applies and is collectible when the sale is made, regardless of the time when the price is paid or delivered.

In the case of a sale, the price of which consists in whole or in part of rentals for the use of the thing transferred, the tax, as regards such rentals, shall be measured by the installments thereof.

In the case of a sale of a service defined under division (MM) or (NN) of section 5739.01 of the Revised Code, the price of which consists in whole or in part of a membership for the receipt of the benefit of the service, the tax applicable to the sale shall be measured by the installments thereof.

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

(1) Sales to the state or any of its political subdivisions, or to any other state or its political subdivisions if the laws of that state exempt from taxation sales made to this state and its political subdivisions;. NOTHING IN DIVISION (B)(1) OF THIS SECTION EXEMPTS SALES TO A GOVERNMENTAL CABLE OPERATOR AS DEFINED IN SECTION 1771.01 of the Revised Code.

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

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

(4) Sales of newspapers, and of magazine subscriptions shipped by second class mail, and sales or transfers of magazines distributed as controlled circulation publications;

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

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

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

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

(9) Sales of services or tangible personal property, other than motor vehicles and manufactured homes, by churches or by nonprofit organizations operated exclusively for charitable purposes as defined in division (B)(12) of this section, provided that the number of days on which such tangible personal property or services, other than items never subject to the tax, are sold does not exceed six in any calendar year. If the number of days on which such sales are made exceeds six in any calendar year, the church or organization shall be considered to be engaged in business and all subsequent sales by it shall be subject to the tax. In counting the number of days, all sales by groups within a church or within an organization shall be considered to be sales of that church or organization, except that sales made by separate student clubs and other groups of students of a primary or secondary school, and sales made by a parent-teacher association, booster group, or similar organization that raises money to support or fund curricular or extracurricular activities of a primary or secondary school, shall not be considered to be sales of such school, and sales by each such club, group, association, or organization shall be counted separately for purposes of the six-day limitation. This division does not apply to sales by a noncommercial educational radio or television broadcasting station.

NOTHING IN DIVISION (B)(9) OF THIS SECTION SHALL BE DEEMED TO EXEMPT SALES BY A GOVERNMENTAL CABLE OPERATOR AS DEFINED IN SECTION 1771.01 of the Revised Code.

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

(11) The transportation of persons or property, unless the transportation is by a private investigation and security service;

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

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

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

NOTHING IN DIVISION (B)(12) OF THIS SECTION SHALL BE DEEMED TO EXEMPT SALES BY A GOVERNMENTAL CABLE OPERATOR AS DEFINED IN SECTION 1771.01 of the Revised Code.

(13) Building and construction materials and services sold to construction contractors for incorporation into a structure or improvement to real property under a construction contract with this state or a political subdivision thereof, or with the United States government or any of its agencies; building and construction materials and services sold to construction contractors for incorporation into a structure or improvement to real property that are accepted for ownership by this state or any of its political subdivisions, or by the United States government or any of its agencies at the time of completion of such structures or improvements; building and construction materials sold to construction contractors for incorporation into a horticulture structure or livestock structure for a person engaged in the business of horticulture or producing livestock; building materials and services sold to a construction contractor for incorporation into a house of public worship or religious education, or a building used exclusively for charitable purposes under a construction contract with an organization whose purpose is as described in division (B)(12) of this section; building and construction materials sold for incorporation into the original construction of a sports facility under section 307.696 of the Revised Code; and building and construction materials and services sold to a construction contractor for incorporation into real property outside this state if such materials and services, when sold to a construction contractor in the state in which the real property is located for incorporation into real property in that state, would be exempt from a tax on sales levied by that state;

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

(15) Sales to persons engaged in any of the activities mentioned in division (E)(2) or (9) of section 5739.01 of the Revised Code, to persons engaged in making retail sales, or to persons who purchase for sale from a manufacturer tangible personal property that was produced by the manufacturer in accordance with specific designs provided by the purchaser, of packages, including material and parts for packages, and of machinery, equipment, and material for use primarily in packaging tangible personal property produced for sale by or on the order of the person doing the packaging, or sold at retail. "Packages" includes bags, baskets, cartons, crates, boxes, cans, bottles, bindings, wrappings, and other similar devices and containers, and "packaging" means placing therein.

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

(17) Sales to persons engaged in farming, agriculture, horticulture, or floriculture, of tangible personal property for use or consumption directly in the production by farming, agriculture, horticulture, or floriculture of other tangible personal property for use or consumption directly in the production of tangible personal property for sale by farming, agriculture, horticulture, or floriculture; or material and parts for incorporation into any such tangible personal property for use or consumption in production; and of tangible personal property for such use or consumption in the conditioning or holding of products produced by and for such use, consumption, or sale by persons engaged in farming, agriculture, horticulture, or floriculture, except where such property is incorporated into real property;

(18) Sales of drugs dispensed by a licensed pharmacist upon the order of a licensed health professional authorized to prescribe drugs to a human being, as the term "licensed health professional authorized to prescribe drugs" is defined in section 4729.01 of the Revised Code; insulin as recognized in the official United States pharmacopoeia; urine and blood testing materials when used by diabetics or persons with hypoglycemia to test for glucose or acetone; hypodermic syringes and needles when used by diabetics for insulin injections; epoetin alfa when purchased for use in the treatment of persons with end-stage renal disease; hospital beds when purchased for use by persons with medical problems for medical purposes; and oxygen and oxygen-dispensing equipment when purchased for use by persons with medical problems for medical purposes;

(19) Sales of artificial limbs or portion thereof, breast prostheses, and other prosthetic devices for humans; braces or other devices for supporting weakened or nonfunctioning parts of the human body; wheelchairs; devices used to lift wheelchairs into motor vehicles and parts and accessories to such devices; crutches or other devices to aid human perambulation; and items of tangible personal property used to supplement impaired functions of the human body such as respiration, hearing, or elimination. No exemption under this division shall be allowed for nonprescription drugs, medicines, or remedies; items or devices used to supplement vision; items or devices whose function is solely or primarily cosmetic; or physical fitness equipment. This division does not apply to sales to a physician or medical facility for use in the treatment of a patient.

(20) Sales of emergency and fire protection vehicles and equipment to nonprofit organizations for use solely in providing fire protection and emergency services for political subdivisions of the state;

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

(22) Sales of services provided by the state or any of its political subdivisions, agencies, instrumentalities, institutions, or authorities, or by governmental entities of the state or any of its political subdivisions, agencies, instrumentalities, institutions, or authorities;.

NOTHING IN DIVISION (B)(22) OF THIS SECTION SHALL BE DEEMED TO EXEMPT SALES BY A GOVERNMENTAL CABLE OPERATOR AS DEFINED IN SECTION 1771.01 of the Revised Code.

(23) Sales of motor vehicles to nonresidents of this state upon the presentation of an affidavit executed in this state by the nonresident purchaser affirming that the purchaser is a nonresident of this state, that possession of the motor vehicle is taken in this state for the sole purpose of immediately removing it from this state, that the motor vehicle will be permanently titled and registered in another state, and that the motor vehicle will not be used in this state;

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

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

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

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

(27) Sales of solar, wind, or hydrothermal energy systems that meet the guidelines established under division (B) of section 1551.20 of the Revised Code, components of such systems that are identified under division (B) or (D) of that section, or charges for the installation of such systems or components, made during the period from August 14, 1979, through December 31, 1985;

(28) Sales to persons licensed to conduct a food service operation pursuant to section 3732.03 of the Revised Code, of tangible personal property primarily used directly for the following:

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

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

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

(29) Sales of animals by nonprofit animal adoption services or county humane societies;

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

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

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

(33) The sale, lease, repair, and maintenance of; parts for; or items attached to or incorporated in motor vehicles that are primarily used for transporting tangible personal property by a person engaged in highway transportation for hire;

(34) Sales to the state headquarters of any veterans' organization in Ohio that is either incorporated and issued a charter by the congress of the United States or is recognized by the United States veterans administration, for use by the headquarters;

(35) Sales to a telecommunications service vendor of tangible personal property and services used directly and primarily in transmitting, receiving, switching, or recording any interactive, two-way electromagnetic communications, including voice, image, data, and information, through the use of any medium, including, but not limited to, poles, wires, cables, switching equipment, computers, and record storage devices and media, and component parts for the tangible personal property. The exemption provided in division (B)(35) of this section shall be in lieu of all other exceptions under division (E)(2) of section 5739.01 of the Revised Code to which a telecommunications service vendor may otherwise be entitled based upon the use of the thing purchased in providing the telecommunications service.

(36) Sales of investment metal bullion and investment coins. "Investment metal bullion" means any elementary precious metal that has been put through a process of smelting or refining, including, but not limited to, gold, silver, platinum, and palladium, and which is in such state or condition that its value depends upon its content and not upon its form. "Investment metal bullion" does not include fabricated precious metal that has been processed or manufactured for one or more specific and customary industrial, professional, or artistic uses. "Investment coins" means numismatic coins or other forms of money and legal tender manufactured of gold, silver, platinum, palladium, or other metal under the laws of the United States or any foreign nation with a fair market value greater than any statutory or nominal value of such coins.

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

(b) Sales to direct marketing vendors of preliminary materials such as photographs, artwork, and typesetting that will be used in printing advertising material; of printed matter that offers free merchandise or chances to win sweepstake prizes and that is mailed to potential customers with advertising material described in division (B)(37)(a) of this section; and of equipment such as telephones, computers, facsimile machines, and similar tangible personal property primarily used to accept orders for direct marketing retail sales.

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

For purposes of division (B)(37) of this section, "direct marketing" means the method of selling where consumers order tangible personal property by United States mail, delivery service, or telecommunication and the vendor delivers or ships the tangible personal property sold to the consumer from a warehouse, catalogue distribution center, or similar fulfillment facility by means of the United States mail, delivery service, or common carrier.

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

(39) The sale of a motor vehicle that is used exclusively for a vanpool ridesharing arrangement to persons participating in the vanpool ridesharing arrangement when the vendor is selling the vehicle pursuant to a contract between the vendor and the department of transportation;

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

(41) Sales to a professional racing team of any of the following:

(a) Motor racing vehicles;

(b) Repair services for motor racing vehicles;

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

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

As used in this section, except in division (B)(16) of this section, "food" includes cereals and cereal products, milk and milk products including ice cream, meat and meat products, fish and fish products, eggs and egg products, vegetables and vegetable products, fruits, fruit products, and pure fruit juices, condiments, sugar and sugar products, coffee and coffee substitutes, tea, and cocoa and cocoa products. It does not include: spirituous or malt liquors; soft drinks; sodas and beverages that are ordinarily dispensed at bars and soda fountains or in connection therewith, other than coffee, tea, and cocoa; root beer and root beer extracts; malt and malt extracts; mineral oils, cod liver oils, and halibut liver oil; medicines, including tonics, vitamin preparations, and other products sold primarily for their medicinal properties; and water, including mineral, bottled, and carbonated waters, and ice.

(C) The levy of an excise tax on transactions by which lodging by a hotel is or is to be furnished to transient guests pursuant to this section and division (B) of section 5739.01 of the Revised Code does not prevent any of the following:

(1) A municipal corporation or township from levying an excise tax for any lawful purpose not to exceed three per cent on transactions by which lodging by a hotel is or is to be furnished to transient guests in addition to the tax levied by this section. If a municipal corporation or township repeals a tax imposed under division (C)(1) of this section and a county in which the municipal corporation or township has territory has a tax imposed under division (C) of section 5739.024 of the Revised Code in effect, the municipal corporation or township may not reimpose its tax as long as that county tax remains in effect. A municipal corporation or township in which a tax is levied under division (B)(2) of section 351.021 of the Revised Code may not increase the rate of its tax levied under division (C)(1) of this section to any rate that would cause the total taxes levied under both of those divisions to exceed three per cent on any lodging transaction within the municipal corporation or township.

(2) A municipal corporation or a township from levying an additional excise tax not to exceed three per cent on such transactions pursuant to division (B) of section 5739.024 of the Revised Code. Such tax is in addition to any tax imposed under division (C)(1) of this section.

(3) A county from levying an excise tax pursuant to division (A) of section 5739.024 of the Revised Code.

(4) A county from levying an excise tax not to exceed three per cent of such transactions pursuant to division (C) of section 5739.024 of the Revised Code. Such a tax is in addition to any tax imposed under division (C)(3) of this section.

(5) A convention facilities authority, as defined in division (A) of section 351.01 of the Revised Code, from levying the excise taxes provided for in division (B) of section 351.021 of the Revised Code.

(6) A county from levying an excise tax not to exceed one and one-half per cent of such transactions pursuant to division (D) of section 5739.024 of the Revised Code. Such tax is in addition to any tax imposed under division (C)(3) or (4) of this section.

(7) A county from levying an excise tax not to exceed one and one-half per cent of such transactions pursuant to division (E) of section 5739.024 of the Revised Code. Such a tax is in addition to any tax imposed under division (C)(3), (4), or (6) of this section.

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


Section 2. That existing sections 324.01, 718.01, 5701.08, 5709.08, 5709.10, 5709.11, 5709.12, 5709.121, 5733.01, 5739.01, and 5739.02 of the Revised Code are hereby repealed.


Section 3. A political subdivision or its affiliate that is a cable operator on the effective date of sections 1771.01 to 1771.11 of the Revised Code, as enacted by this act, shall comply with section 1771.04 of the Revised Code, and shall file an application for a franchise under section 1771.10 of the Revised Code, no later than six months after the effective date of sections 1771.01 to 1771.11 of the Revised Code. Notwithstanding division (B) of section 1771.10 of the Revised Code, a governmental cable operator providing cable service over a cable system within this state on the effective date of sections 1771.01 to 1771.11 of the Revised Code may continue to provide that service until such time as the Public Utilities Commission issues an order granting or denying the application under section 1771.10 of the Revised Code or, if appealed, until a final order is issued pursuant to a judgment of the court as authorized under that section.

As used in this section, "affiliate," "cable service," "cable system," "governmental cable operator," and "political subdivision" have the same meanings as in section 1771.01 of the Revised Code.

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