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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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