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(127th General Assembly)
(Substitute House Bill Number 157)
AN ACT
To amend sections 3953.33, 5701.11, 5739.01, 5739.02,
5739.035, and
5747.08 of the Revised Code to
require a box on
personal income tax returns that
a
taxpayer may
check to authorize a paid tax
preparer
to speak
to the Department of Taxation
about
certain
matters concerning the return, to
exempt
property used to provide electronic
publishing
services from sales and use taxation,
to incorporate changes in the Internal Revenue
Code since December 28, 2006, into Ohio's tax law,
and to revise the date by which title insurance
agents or agencies must have independent reviews
made of certain accounts.
Be it enacted by the General Assembly of the State of Ohio:
SECTION 1. That sections 3953.33, 5701.11, 5739.01, 5739.02,
5739.035,
and
5747.08 of the Revised Code be
amended to read as
follows:
Sec. 3953.33. (A) Every title insurance agent or agency that
handles escrow, settlement, closing, or security deposit accounts
shall have an annual independent review made of its escrow,
settlement, closing, and security deposit accounts on a
fiscal-year basis within ninety days after the close of the
previous fiscal year each year on or before the thirty-first day
of December for the twelve-month period ending the preceding
thirty-first day of August. The title insurance agent or agency
shall provide proof of the annual review to each title insurance
company that it represents. The superintendent of insurance shall
promulgate rules under Chapter 119. of the Revised Code setting
forth the minimum threshold level at which a review is required,
the standards of the review, the minimum qualifications of the
independent party conducting the review, and the form of the
report that is required. The superintendent may also require title
insurance agents or agencies to provide a copy of their annual
review reports to the superintendent. The annual review required
by this division does not apply to interest on lawyer's trust
accounts established and maintained by an attorney pursuant to
sections 4705.09 and 4705.10 of the Revised Code.
(B) Title insurance agents and agencies shall allow the
superintendent and each and every title insurer that they
represent reasonable access to all of their escrow, settlement,
closing, and security deposit accounts and any and all supporting
account information in order to ascertain the safety and security
of the funds held by the title insurance agent or agency.
(C) Title insurance agents and agencies shall maintain
sufficient records of their affairs, including their escrow
operations and escrow trust accounts, so that the superintendent
may adequately ensure that the title insurance agent or agency is
in compliance of this chapter. Records kept pursuant to this
section shall be kept for a period of not less than ten years
following the transactions to which the records relate. The
superintendent may prescribe the specific records and documents to
be kept.
Sec. 5701.11. The effective date referred to in which this
section refers is the effective date of this section as amended by
H.B. 699 157 of the 126th 127th general assembly.
(A)(1) Except as provided under division (A)(2) or (B) of
this section, any reference in Title LVII of the Revised Code to
the Internal Revenue Code, to the Internal Revenue Code "as
amended," to other laws of the United States, or to other laws of
the United States, "as amended," means the Internal Revenue Code
or other laws of the United States as they exist on the effective
date. This
(2) This section does not apply to any reference in Title
LVII of the Revised Code to the Internal Revenue Code as of a date
certain specifying the day, month, and year, or to other laws of
the United States as of a date certain specifying the day, month,
and year.
(B)(1) For purposes of applying section 5733.04, 5745.01, or
5747.01 of the Revised Code to a taxpayer's taxable year ending in
after December 28, 2006, and before the effective date, a taxpayer
may irrevocably elect to incorporate the provisions of the
Internal Revenue Code or other laws of the United States that are
in effect for federal income tax purposes for that taxable year if
those provisions differ from the provisions that, under division
(A) of this section, would otherwise be incorporated into section
5733.04, 5745.01, or 5747.01 of the Revised Code for that taxable
year under division (A) of this section apply. The filing of a
report or return by the taxpayer for that taxable year
incorporating of a report or return that incorporates the
provisions of the Internal Revenue Code or other laws of the
United States applicable for federal income tax purposes to for
that taxable year, without and that does not include any
adjustments to reverse the effects of any differences between
those provisions and the provisions that would otherwise be
incorporated under division (A) of this section apply, constitutes
the making of an irrevocable election under this division for that
taxable year.
(2) Elections under prior versions of division (B)(1) of this
section remain in effect for the taxable years to which they
apply.
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 not be
subject to 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 not be
subject to 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) Until August 1, 2003, industrial laundry cleaning
services are or are to be
provided and, on and after August 1,
2003, laundry and dry 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, including prepaid calling
service, prepaid wireless calling service, or ancillary service,
is or is to be
provided, but not including
coin-operated
telephone
service;
(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;
(p) On and after August 1, 2003, satellite broadcasting
service is or is to be provided;
(q) On and after August 1, 2003, personal care service is or
is to be provided to an individual. As used in this division,
"personal care service" includes skin care, the application of
cosmetics, manicuring, pedicuring, hair removal, tattooing, body
piercing, tanning, massage, and other similar services. "Personal
care service" does not include a service provided by or on the
order of a licensed physician or licensed chiropractor, or the
cutting, coloring, or styling of an individual's hair.
(r) On and after August 1, 2003, the transportation of
persons by motor vehicle or aircraft is or is to be provided, when
the transportation is entirely within this state, except for
transportation provided by an ambulance service, by a transit bus,
as defined in section 5735.01 of the Revised Code, and
transportation provided by a citizen of the United States holding
a certificate of public convenience and necessity issued under 49
U.S.C. 41102;
(s) On and after August 1, 2003, motor vehicle towing service
is or is to be provided. As used in this division, "motor vehicle
towing service" means the towing or conveyance of a wrecked,
disabled, or illegally parked motor vehicle.
(t) On and after August 1, 2003, snow removal service is or
is to be provided. As used in this division, "snow removal
service" means the removal of snow by any mechanized means, but
does not include the providing of such service by a person that
has less than five thousand dollars in sales of such service
during the calendar year.
(u) Electronic publishing service is or is to be provided to
a consumer for use in business, except that such transactions
occurring between members of an affiliated group, as defined in
division (B)(3)(e) of this section, are not sales.
(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.
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;
(8) The transfer of copyrighted motion picture films used
solely for advertising purposes, except that the transfer of such
films for exhibition purposes is not a sale.
(9) On and after August 1, 2003, all transactions by which
tangible personal property is or is to be stored, except such
property that the consumer of the storage holds for sale in the
regular course of business.
Except as provided in this section, "sale" and "selling" do
not include transfers of interest in leased property where the
original lessee and the terms of the original lease agreement
remain unchanged, or professional, insurance, or personal service
transactions that involve the transfer of tangible personal
property as an inconsequential element, for which no separate
charges are made.
(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
tangile personal property and
services purchased for use or
consumption in the production of that printed
matter. That person
is not entitled to claim exemption under division
(B)(42)(f) of
section 5739.02 of the Revised Code 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.
(6) A person who engages in highway transportation for hire
is the consumer of all packaging materials purchased by that
person and used in performing the service, except for packaging
materials sold by such person in a transaction separate from the
service.
(E) "Retail sale" and "sales at retail" include all sales,
except those in which the purpose of the consumer is 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.
(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
itself out to the public as
conducting
such business. Making a casual sale is not engaging in
business.
(H)(1)(a) "Price," except as provided in divisions (H)(2) and
(3) of this section, means the total amount of consideration,
including cash, credit, property, and services, for which tangible
personal property or services are sold, leased, or rented, valued
in money, whether received in money or otherwise, without any
deduction for any of the following:
(i) The vendor's cost of the property sold;
(ii) The cost of materials used, labor or service costs,
interest, losses, all costs of transportation to the vendor, all
taxes imposed on the vendor, including the tax imposed under
Chapter 5751. of the Revised Code, and any other expense of the
vendor;
(iii) Charges by the vendor for any services necessary to
complete the sale;
(iv) On and after August 1, 2003, delivery charges. As used
in this division, "delivery charges" means charges by the vendor
for preparation and delivery to a location designated by the
consumer of tangible personal property or a service, including
transportation, shipping, postage, handling, crating, and packing.
(v) Installation charges;
(vi) Credit for any trade-in.
(b) "Price" includes consideration received by the vendor
from a third party, if the vendor actually receives the
consideration from a party other than the consumer, and the
consideration is directly related to a price reduction or discount
on the sale; the vendor has an obligation to pass the price
reduction or discount through to the consumer; the amount of the
consideration attributable to the sale is fixed and determinable
by the vendor at the time of the sale of the item to the consumer;
and one of the following criteria is met:
(i) The consumer presents a coupon, certificate, or other
document to the vendor to claim a price reduction or discount
where the coupon, certificate, or document is authorized,
distributed, or granted by a third party with the understanding
that the third party will reimburse any vendor to whom the coupon,
certificate, or document is presented;
(ii) The consumer identifies the consumer's self to the
seller as a member of a group or organization entitled to a price
reduction or discount. A preferred customer card that is available
to any patron does not constitute membership in such a group or
organization.
(iii) The price reduction or discount is identified as a
third party price reduction or discount on the invoice received by
the consumer, or on a coupon, certificate, or other document
presented by the consumer.
(c) "Price" does not include any of the following:
(i) Discounts, including cash, term, or coupons that are not
reimbursed by a third party that are allowed by a vendor and taken
by a consumer on a sale;
(ii) Interest, financing, and carrying charges from credit
extended on the sale of tangible personal property or services, if
the amount is separately stated on the invoice, bill of sale, or
similar document given to the purchaser;
(iii) Any taxes legally imposed directly on the consumer that
are separately stated on the invoice, bill of sale, or similar
document given to the consumer. For the purpose of this division,
the tax imposed under Chapter 5751. of the Revised Code is not a
tax directly on the consumer, even if the tax or a portion thereof
is separately stated.
(iv) Notwithstanding divisions (H)(1)(b)(i) to (iii) of this
section, any discount allowed by an automobile manufacturer to its
employee, or to the employee of a supplier, on the purchase of a
new motor vehicle from a new motor vehicle dealer in this state.
(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 this division, "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
that was obtained by the person making the
sale,
through purchase or otherwise, for the person's own use and
was
previously subject to any state's taxing
jurisdiction on its
sale
or use, and includes such items acquired
for the seller's use
that
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
the 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 that is to be incorporated into and
will become a part of the consumer's production, transmission,
transportation, or distribution system and
that 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 directly in the rendition of a public utility service. In
this definition, "public utility" includes a citizen of the United
States holding, and required to hold, a certificate of public
convenience and necessity issued under 49 U.S.C. 41102.
(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
that 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
that includes
territory
in
more
than one county must include all the area of
the most
populous
county
that 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
that 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
that 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.
For transactions occurring on or after the effective date of
the amendment of this section by H.B. 157 of the 127th general
assembly, "electronic information services" does not include
electronic publishing as defined in division (LLL) of this
section.
(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)(1) "Telecommunications service" means the electronic
transmission, conveyance, or routing of voice, data, audio, video,
or any other information or signals to a point, or between or
among points. "Telecommunications service" includes such
transmission, conveyance, or routing in which computer processing
applications are used to act on the form, code, or protocol of the
content for purposes of transmission, conveyance, or routing
without regard to whether the service is referred to as voice-over
internet protocol service or is classified by the federal
communications commission as enhanced or value-added.
"Telecommunications service" does not include any of the
following:
(a) Data processing and information services that allow data
to be generated, acquired, stored, processed, or retrieved and
delivered by an electronic transmission to a consumer where the
consumer's primary purpose for the underlying transaction is the
processed data or information;
(b) Installation or maintenance of wiring or equipment on a
customer's premises;
(c) Tangible personal property;
(d) Advertising, including directory advertising;
(e) Billing and collection services provided to third
parties;
(f) Internet access service;
(g) Radio and television audio and video programming
services, regardless of the medium, including the furnishing of
transmission, conveyance, and routing of such services by the
programming service provider. Radio and television audio and video
programming services include, but are not limited to, cable
service, as defined in 47 U.S.C. 522(6), and audio and video
programming services delivered by commercial mobile radio service
providers, as defined in 47 C.F.R. 20.3;
(h) Ancillary service;
(i) Digital products delivered electronically, including
software, music, video, reading materials, or ring tones.
(2) "Ancillary service" means a service that is associated
with or incidental to the provision of telecommunications service,
including conference bridging service, detailed telecommunications
billing service, directory assistance, vertical service, and voice
mail service. As used in this division:
(a) "Conference bridging service" means an ancillary service
that links two or more participants of an audio or video
conference call, including providing a telephone number.
"Conference bridging service" does not include telecommunications
services used to reach the conference bridge.
(b) "Detailed telecommunications billing service" means an
ancillary service of separately stating information pertaining to
individual calls on a customer's billing statement.
(c) "Directory assistance" means an ancillary service of
providing telephone number or address information.
(d) "Vertical service" means an ancillary service that is
offered in connection with one or more telecommunications
services, which offers advanced calling features that allow
customers to identify callers and manage multiple calls and call
connections, including conference bridging service.
(e) "Voice mail service" means an ancillary service that
enables the customer to store, send, or receive recorded messages.
"Voice mail service" does not include any vertical services that
the customer may be required to have in order to utilize the voice
mail service.
(3) "900 service" means an inbound toll telecommunications
service purchased by a subscriber that allows the subscriber's
customers to call in to the subscriber's prerecorded announcement
or live service, and which is typically marketed under the name
"900" service and any subsequent numbers designated by the federal
communications commission. "900 service" does not include the
charge for collection services provided by the seller of the
telecommunications service to the subscriber, or services or
products sold by the subscriber to the subscriber's customer.
(4) "Prepaid calling service" means the right to access
exclusively telecommunications services, which must be paid for in
advance and which enables the origination of calls using an access
number or authorization code, whether manually or electronically
dialed, and that is sold in predetermined units of dollars of
which the number declines with use in a known amount.
(5) "Prepaid wireless calling service" means a
telecommunications service that provides the right to utilize
mobile telecommunications service as well as other
non-telecommunications services, including the download of digital
products delivered electronically, and content and ancillary
services, that must be paid for in advance and that is sold in
predetermined units of dollars of which the number declines with
use in a known amount.
(6) "Value-added non-voice data service" means a
telecommunications service in which computer processing
applications are used to act on the form, content, code, or
protocol of the information or data primarily for a purpose other
than transmission, conveyance, or routing.
(7) "Coin-operated telephone service" means a
telecommunications service paid for by inserting money into a
telephone accepting direct deposits of money to operate.
(8) "Customer" has the same meaning as in section 5739.034 of
the Revised Code.
(BB) "Laundry and dry cleaning services" means removing
soil
or dirt from towels, linens, articles of
clothing, or other fabric
items that belong to others and supplying towels, linens, articles
of clothing, or other fabric items. "Laundry and dry cleaning
services" does not include the provision of self-service
facilities for use by consumers to remove soil or dirt from
towels, linens, articles of clothing, or other fabric items.
(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 also means 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 provided or supplied receive their wages, salary, or
other
compensation from the provider or supplier of the employment
service or from a third party that provided or supplied the
personnel to the provider or supplier. "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.
(5) Transactions where the personnel so provided or supplied
by a provider or supplier to a purchaser of an employment service
are then provided or supplied by that purchaser to a third party
as an employment service, except "employment service" does include
the transaction between that purchaser and the third party.
(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.
(UU)(1) "Lease" or "rental" means any transfer of the
possession or control of tangible
personal property for a fixed or
indefinite term, for consideration. "Lease" or "rental" includes
future options to purchase or extend, and agreements described in
26 U.S.C. 7701(h)(1) covering motor vehicles and trailers where
the amount of consideration may be increased or decreased by
reference to the amount realized upon the sale or disposition of
the property. "Lease" or "rental" does not include:
(a) A transfer of possession or control of tangible personal
property under a security agreement or a deferred payment plan
that requires the transfer of title upon completion of the
required payments;
(b) A transfer of possession or control of tangible personal
property under an agreement that requires the transfer of title
upon completion of required payments and payment of an option
price that does not exceed the greater of one hundred dollars or
one per cent of the total required payments;
(c) Providing tangible personal property along with an
operator for a fixed or indefinite period of time, if the operator
is necessary for the property to perform as designed. For purposes
of this division, the operator must do more than maintain,
inspect, or set-up the tangible personal property.
(2) "Lease" and "rental," as defined in division (UU) of this
section, shall not apply to leases or rentals that exist before
June 26, 2003.
(3) "Lease" and "rental" have the same meaning as in division
(UU)(1) of this section regardless of whether a transaction is
characterized as a lease or rental under generally accepted
accounting principles, the Internal Revenue Code, Title XIII of
the Revised Code, or other federal, state, or local laws.
(VV) "Mobile telecommunications service" has the same
meaning
as in the "Mobile Telecommunications Sourcing Act," Pub.
L.
No.
106-252, 114 Stat. 631 (2000), 4 U.S.C.A. 124(7), as
amended, and,
on and after August 1, 2003, includes related fees and ancillary
services, including universal service fees, detailed billing
service, directory assistance, service initiation, voice mail
service, and vertical services, such as caller ID and three-way
calling.
(WW) "Certified service provider" has the same meaning as in
section 5740.01 of the Revised Code.
(XX) "Satellite broadcasting service" means the distribution
or broadcasting of programming or services by satellite directly
to the subscriber's receiving equipment without the use of ground
receiving or distribution equipment, except the subscriber's
receiving equipment or equipment used in the uplink process to the
satellite, and includes all service and rental charges, premium
channels or other special services, installation and repair
service charges, and any other charges having any connection with
the provision of the satellite broadcasting service.
(YY) "Tangible personal property" means personal property
that can be seen, weighed, measured, felt, or touched, or that is
in any other manner perceptible to the senses. For purposes of
this chapter and Chapter 5741. of the Revised Code, "tangible
personal property" includes motor vehicles, electricity, water,
gas, steam, and prewritten computer software.
(ZZ) "Direct mail" means printed material delivered or
distributed by United States mail or other delivery service to a
mass audience or to addressees on a mailing list provided by the
consumer or at the direction of the consumer when the cost of the
items are not billed directly to the recipients. "Direct mail"
includes tangible personal property supplied directly or
indirectly by the consumer to the direct mail vendor for inclusion
in the package containing the printed material. "Direct mail" does
not include multiple items of printed material delivered to a
single address.
(AAA) "Computer" means an electronic device that accepts
information in digital or similar form and manipulates it for a
result based on a sequence of instructions.
(BBB) "Computer software" means a set of coded instructions
designed to cause a computer or automatic data processing
equipment to perform a task.
(CCC) "Delivered electronically" means delivery of computer
software from the seller to the purchaser by means other than
tangible storage media.
(DDD) "Prewritten computer software" means computer software,
including prewritten upgrades, that is not designed and developed
by the author or other creator to the specifications of a specific
purchaser. The combining of two or more prewritten computer
software programs or prewritten portions thereof does not cause
the combination to be other than prewritten computer software.
"Prewritten computer software" includes software designed and
developed by the author or other creator to the specifications of
a specific purchaser when it is sold to a person other than the
purchaser. If a person modifies or enhances computer software of
which the person is not the author or creator, the person shall be
deemed to be the author or creator only of such person's
modifications or enhancements. Prewritten computer software or a
prewritten portion thereof that is modified or enhanced to any
degree, where such modification or enhancement is designed and
developed to the specifications of a specific purchaser, remains
prewritten computer software; provided, however, that where there
is a reasonable, separately stated charge or an invoice or other
statement of the price given to the purchaser for the modification
or enhancement, the modification or enhancement shall not
constitute prewritten computer software.
(EEE)(1)
"Food"
means substances, whether in liquid,
concentrated, solid, frozen, dried, or dehydrated form, that are
sold for ingestion or chewing by humans and are consumed for their
taste or nutritional value. "Food" does not include alcoholic
beverages, dietary supplements, soft drinks, or tobacco.
(2) As used in division (EEE)(1) of this section:
(a) "Alcoholic beverages" means beverages that are suitable
for human consumption and contain one-half of one per cent or more
of alcohol by volume.
(b) "Dietary supplements" means any product, other than
tobacco, that is intended to supplement the diet and that is
intended for ingestion in tablet, capsule, powder, softgel,
gelcap, or liquid form, or, if not intended for ingestion in such
a form, is not represented as conventional food for use as a sole
item of a meal or of the diet; that is required to be labeled as a
dietary supplement, identifiable by the "supplement facts" box
found on the label, as required by 21 C.F.R. 101.36; and that
contains one or more of the following dietary ingredients:
(i) A vitamin;
(ii) A mineral;
(iii) An herb or other botanical;
(iv) An amino acid;
(v) A dietary substance for use by humans to supplement the
diet by increasing the total dietary intake;
(vi) A concentrate, metabolite, constituent, extract, or
combination of any ingredient described in divisions
(EEE)(2)(b)(i) to (v) of this section.
(c) "Soft drinks" means nonalcoholic beverages that contain
natural or artificial sweeteners. "Soft drinks" does not include
beverages that contain milk or milk products, soy, rice, or
similar milk substitutes, or that contains greater than fifty per
cent vegetable or fruit juice by volume.
(d) "Tobacco" means cigarettes, cigars, chewing or pipe
tobacco, or any other item that contains tobacco.
(FFF) "Drug" means a compound, substance, or preparation, and
any component of a compound, substance, or preparation, other than
food, dietary supplements, or alcoholic beverages that is
recognized in the official United States pharmacopoeia, official
homeopathic pharmacopoeia of the United States, or official
national formulary, and supplements to them; is intended for use
in the diagnosis, cure, mitigation, treatment, or prevention of
disease; or is intended to affect the structure or any function of
the body.
(GGG) "Prescription" means an order, formula, or recipe
issued in any form of oral, written, electronic, or other means of
transmission by a duly licensed practitioner authorized by the
laws of this state to issue a prescription.
(HHH) "Durable medical equipment" means equipment, including
repair and replacement parts for such equipment, that can
withstand repeated use, is primarily and customarily used to serve
a medical purpose, generally is not useful to a person in the
absence of illness or injury, and is not worn in or on the body.
"Durable medical equipment" does not include mobility enhancing
equipment.
(III) "Mobility enhancing equipment" means equipment,
including repair and replacement parts for such equipment, that is
primarily and customarily used to provide or increase the ability
to move from one place to another and is appropriate for use
either in a home or a motor vehicle, that is not generally used by
persons with normal mobility, and that does not include any motor
vehicle or equipment on a motor vehicle normally provided by a
motor vehicle manufacturer. "Mobility enhancing equipment" does
not include durable medical equipment.
(JJJ) "Prosthetic device" means a replacement, corrective, or
supportive device, including repair and replacement parts for the
device, worn on or in the human body to artificially
replace a
missing portion of the body, prevent or correct physical deformity
or malfunction, or support a weak or deformed portion of the body.
As used in this division, "prosthetic device" does not include
corrective eyeglasses, contact lenses, or dental prosthesis.
(KKK)(1) "Fractional aircraft ownership program" means a
program in which persons within an affiliated group sell and
manage fractional ownership program aircraft, provided that at
least one hundred airworthy aircraft are operated in the program
and the program meets all of the following criteria:
(a) Management services are provided by at least one program
manager within an affiliated group on behalf of the fractional
owners.
(b) Each program aircraft is owned or possessed by at least
one fractional owner.
(c) Each fractional owner owns or possesses at least a
one-sixteenth interest in at least one fixed-wing program
aircraft.
(d) A dry-lease aircraft interchange arrangement is in effect
among all of the fractional owners.
(e) Multi-year program agreements are in effect regarding the
fractional ownership, management services, and dry-lease aircraft
interchange arrangement aspects of the program.
(2) As used in division (KKK)(1) of this section:
(a) "Affiliated group" has the same meaning as in division
(B)(3)(e) of this section.
(b) "Fractional owner" means a person that owns or possesses
at least a one-sixteenth interest in a program aircraft and has
entered into the agreements described in division (KKK)(1)(e) of
this section.
(c) "Fractional ownership program aircraft" or "program
aircraft" means a turbojet aircraft that is owned or possessed by
a fractional owner and that has been included in a dry-lease
aircraft interchange arrangement and agreement under divisions
(KKK)(1)(d) and (e) of this section, or an aircraft a program
manager owns or possesses primarily for use in a fractional
aircraft ownership program.
(d) "Management services" means administrative and aviation
support services furnished under a fractional aircraft ownership
program in accordance with a management services agreement under
division (KKK)(1)(e) of this section, and offered by the program
manager to the fractional owners, including, at a minimum, the
establishment and implementation of safety guidelines; the
coordination of the scheduling of the program aircraft and crews;
program aircraft maintenance; program aircraft insurance; crew
training for crews employed, furnished, or contracted by the
program manager or the fractional owner; the satisfaction of
record-keeping requirements; and the development and use of an
operations manual and a maintenance manual for the fractional
aircraft ownership program.
(e) "Program manager" means the person that offers management
services to fractional owners pursuant to a management services
agreement under division (KKK)(1)(e) of this section.
(LLL) "Electronic publishing" means providing access to
one
or more of the following primarily for business customers,
including the federal government or a state government or a
political subdivision thereof, to conduct research: news;
business, financial, legal, consumer, or credit materials;
editorials, columns, reader commentary, or features; photos or
images; archival or research material; legal notices, identity
verification, or public records; scientific, educational,
instructional, technical, professional, trade, or other literary
materials; or other similar information which has been gathered
and made available by the provider to the consumer in an
electronic format. Providing electronic publishing includes the
functions necessary for the acquisition, formatting, editing,
storage, and dissemination of data or information that is the
subject of a sale.
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)(1) The tax shall be collected as provided
in
section
5739.025 of the Revised Code, provided that on and after July 1,
2003, and on or before June 30, 2005, the rate of tax shall be six
per cent. On and after July 1, 2005, the rate of the tax shall be
five and one-half per cent. The tax applies and is collectible
when the sale is made,
regardless of the time when the price is
paid or delivered.
(2) In the case of the lease or rental, with a fixed term of
more than thirty days or an indefinite term with a minimum period
of more than thirty days, of any motor vehicles designed by the
manufacturer to carry a load of not more than one ton, watercraft,
outboard motor, or aircraft, or of any tangible personal property,
other than motor vehicles designed by the manufacturer to carry a
load of more than one ton, to be used by the lessee or renter
primarily for business purposes, the tax shall be collected by the
vendor at the time the lease or rental is consummated and shall be
calculated by the vendor on the basis of the total amount to be
paid by the lessee or renter under the lease agreement. If the
total amount of the consideration for the lease or rental includes
amounts that are not calculated at the time the lease or rental is
executed, the tax shall be calculated and collected by the vendor
at the time such amounts are billed to the lessee or renter. In
the case of an open-end lease or rental, the tax shall be
calculated by the vendor on the basis of the total amount to be
paid during the initial fixed term of the lease or rental, and for
each subsequent renewal period as it comes due. As used in this
division, "motor vehicle" has the same meaning as in section
4501.01 of the Revised Code, and "watercraft" includes an outdrive
unit attached to the watercraft.
A lease with a renewal clause and a termination penalty or
similar provision that applies if the renewal clause is not
exercised is presumed to be a sham transaction. In such a case,
the tax shall be calculated and paid on the basis of the entire
length of the lease period, including any renewal periods, until
the termination penalty or similar provision no longer applies.
The taxpayer shall bear the burden, by a preponderance of the
evidence, that the transaction or series of transactions is not a
sham transaction.
(3) Except as provided in division (A)(2) of this section, in
the case of a sale, the price of which consists in whole
or in
part of the lease or rental of tangible personal property, the
tax
shall be measured by the
installments
of that lease or rental.
(4) In the case of a sale of a physical fitness facility
service or recreation and sports club service, 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;
(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 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 division (A)
of 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 division (A) of
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 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 pipes
or
conduits, and all sales of communications services by a
telegraph company, all terms as defined in section
5727.01 of
the
Revised Code, and sales of electricity delivered through wires;
(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, and
all-purpose vehicles as defined in section 4519.01 of the Revised
Code;
(9)(a) Sales of services or tangible personal property, other
than motor vehicles, mobile homes, and manufactured
homes, by
churches, organizations exempt from taxation under
section
501(c)(3) of the Internal Revenue
Code of 1986, or
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, except as otherwise provided
in division (B)(9)(b) of this section. 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.
(b) The limitation on the number of days on which tax-exempt
sales may be made by a church or organization under division
(B)(9)(a) of this section does not apply to sales made by
student
clubs and other groups of students of a primary
or
secondary
school, or 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.
(c) Divisions (B)(9)(a) and (b) of this section do not apply
to sales by a
noncommercial educational radio or television
broadcasting
station.
(10) Sales not within the taxing power of this state under
the Constitution of the United States;
(11) Except for transactions that are sales under division
(B)(3)(r) of section 5739.01 of the Revised Code, 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.
(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
of this state, 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
the
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
materials and
services sold to a construction contractor for
incorporation into a building
under a construction contract with
an organization exempt from taxation under
section 501(c)(3) of
the Internal Revenue
Code of 1986 when the building is to be used
exclusively for the
organization's exempt purposes; 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 primarily engaged in any of the
activities
mentioned in division (B)(42)(a) or (g) of this
section, 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, labels, and parts for packages, and
of
machinery,
equipment, and material for use primarily in
packaging
tangible
personal property produced for sale, including
any machinery,
equipment, and supplies used to make labels or
packages, to
prepare packages
or products for labeling, or to
label packages or
products, 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, but does not include motor
vehicles or bulk tanks, trailers, or similar devices attached to
motor vehicles. "Packaging" means placing in a package. Division
(B)(15) of this section does not apply to persons engaged in
highway transportation for hire.
(16) Sales of food to persons using food stamp
benefits to
purchase the food. As used in this division,
"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 for a human being that may be dispensed
only pursuant to a prescription;
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 medical
disease;
hospital
beds when purchased
by hospitals, nursing homes,
or other medical facilities;
and medical oxygen and medical
oxygen-dispensing
equipment when purchased by hospitals, nursing
homes, or other medical facilities;
(19) Sales of prosthetic devices, durable medical equipment
for home use, or mobility enhancing equipment, when made pursuant
to a prescription and when such devices or equipment are for use
by a human being.
(20) Sales of emergency and fire protection vehicles and
equipment to nonprofit organizations for use solely in providing
fire protection and emergency services, including trauma care and
emergency
medical 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;
(23) Sales of motor vehicles to nonresidents of this state
under the circumstances described
in division (B) of section
5739.029 of the Revised Code;
(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 to persons licensed to conduct a food service
operation pursuant to section 3717.43 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.
(28) Sales of animals by nonprofit animal adoption
services
or county humane societies;
(29) 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;
(30) Sales and installation of agricultural land tile, as
defined in division (B)(5)(a) of section 5739.01 of the Revised
Code;
(31) Sales and erection or installation of portable grain
bins, as defined in division (B)(5)(b) of section 5739.01 of the
Revised Code;
(32) 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
belonging to others by
a
person engaged in highway transportation
for hire, except for packages and packaging used for the
transportation of tangible personal property;
(33) Sales to the state headquarters of any veterans'
organization in
this state 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;
(34) Sales to a telecommunications service vendor, mobile
telecommunications service vendor, or satellite broadcasting
service vendor of
tangible personal property and services used
directly and
primarily in transmitting, receiving, switching, or
recording any
interactive, one- or 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 this division
shall
be in lieu of all other exemptions under division (B)(42)(a) of
this
section to which the vendor may otherwise be entitled, based
upon the use of
the
thing purchased in providing the
telecommunications, mobile telecommunications, or satellite
broadcasting service.
(35)(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)(35)(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)(35) 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.
(36) 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;
(37) 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;
(38) 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.
(39) Sales of used manufactured homes and used mobile
homes,
as
defined in section 5739.0210 of the Revised Code, made on or
after
January 1, 2000;
(40) Sales of tangible personal property and services to
a
provider of electricity used or consumed directly and primarily in
generating, transmitting, or distributing electricity for use by
others,
including property that is or is to be incorporated into
and will become
a part of the consumer's production, transmission,
or distribution
system and that retains its classification as
tangible personal
property after incorporation; fuel or power used
in the
production, transmission, or distribution of electricity;
and
tangible personal property and services used in the repair and
maintenance of the production, transmission, or distribution
system, including only those motor vehicles as are specially
designed and equipped for such use. The exemption provided in
this
division shall be in lieu of all other exemptions in division
(B)(42)(a) of this section to
which a provider
of electricity may
otherwise be entitled based on the use of the
tangible
personal
property or service purchased in generating,
transmitting, or
distributing electricity.
(41) Sales to a person providing services under division
(B)(3)(r) of section 5739.01 of the Revised Code of tangible
personal property and services used directly and primarily in
providing taxable services under that section.
(42) Sales where the purpose of the purchaser is to do any of
the following:
(a) 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 tangible
personal property for sale by mining, including, without
limitation, the extraction from the earth of all substances that
are classed geologically as minerals, production of crude oil and
natural gas, farming, agriculture, horticulture, or floriculture,
or directly in the rendition of a public utility service, except
that the sales tax levied by this section shall be collected upon
all meals, drinks, and food for human consumption sold when
transporting persons. 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. This paragraph does
not exempt 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.
(b) To hold the thing transferred as security for the
performance of an obligation of the vendor;
(c) To resell, hold, use, or consume the thing transferred as
evidence of a contract of insurance;
(d) To use or consume the thing directly in commercial
fishing;
(e) 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;
(f) 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;
(g) 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;
(h) To use the benefit of a warranty, maintenance or service
contract, or similar agreement, as described in division (B)(7) of
section 5739.01 of the Revised Code, to repair or maintain
tangible personal property, if all of the property that is the
subject of the warranty, contract, or agreement would not be
subject to the tax imposed by this section;
(i) To use the thing transferred as qualified research and
development equipment;
(j) 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. This division does not apply to
motor vehicles registered for operation on the public highways. As
used in this division, "affiliated group" has the same meaning as
in division (B)(3)(e) of section 5739.01 of the Revised Code and
"direct marketing" has the same meaning as in division (B)(35) of
this section.
(k) 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 section 5739.01 of the Revised
Code;
(l) To use or consume the thing transferred in the production
of a newspaper for distribution to the public;
(m) To use tangible personal property to perform a service
listed in division (B)(3) of section 5739.01 of the Revised Code,
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.
(n) To use or consume the thing transferred in acquiring,
formatting, editing, storing, and disseminating data or
information by electronic publishing.
As used in division (B)(42) of this section, "thing" includes
all transactions included in divisions (B)(3)(a), (b), and (e) of
section 5739.01 of the Revised Code.
(43) 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.
(44) Sales of replacement and modification parts for engines,
airframes, instruments, and interiors in, and paint for, aircraft
used primarily in a fractional aircraft ownership program, and
sales of services for the repair, modification, and maintenance of
such aircraft, and machinery, equipment, and supplies primarily
used to provide those services.
(45) Sales of telecommunications service that is used
directly and primarily to perform the functions of a call center.
As used in this division, "call center" means any physical
location where telephone calls are placed or received in high
volume for the purpose of making sales, marketing, customer
service, technical support, or other specialized business
activity, and that employs at least fifty individuals that engage
in call center activities on a full-time basis, or sufficient
individuals to fill fifty full-time equivalent positions.
(46) Sales by a telecommunications service vendor of 900
service to a subscriber. This division does not apply to
information services, as defined in division (FF) of section
5739.01 of the Revised Code.
(47) Sales of value-added non-voice data service. This
division does not apply to any similar service that is not
otherwise a telecommunications service.
(C) 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.
(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.
(E) 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 under section 5739.12 of the Revised Code and
the effects of any rounding pursuant to section 5703.055 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 the tax levied by this section or section 5739.021,
5739.023, or 5739.026 of the Revised Code.
Sec. 5739.035. This section only applies to sales that may be
sitused under this section pursuant to division
(B) of section
5739.033 of the Revised Code.
(A) Except as otherwise provided in this section,
the situs
of
all sales
is the
vendor's
place of business.
(1) If the consumer or the consumer's agent takes possession
of the
tangible personal property at a place of business of the
vendor
where the purchase contract or agreement was made,
the
situs of the sale
is
that place of business.
(2) If the consumer or the consumer's agent takes possession
of the
tangible personal property other than at a place of
business of
the vendor, or takes possession at a warehouse or
similar
facility of the vendor,
the situs of the sale is
the
vendor's
place of business where the purchase
contract or
agreement was
made or the purchase order was received.
(3) If the vendor provides a service specified in division
(B)(3)(a), (b), (c), (d), (n),
(o), (q), (r), or (s) of section
5739.01 or makes a sale specified in division (B)(8) of section
5739.01 of the
Revised
Code,
the situs of the sale is
the vendor's
place of
business
where the service is performed or the contract
or
agreement for
the service was made or the purchase order was
received.
(B) If the vendor is a transient vendor as specified in
division (B) of section 5739.17 of the Revised Code,
the situs of
the sale is
the
vendor's
temporary place of business or, if the
transient vendor
is the
lessor of titled motor vehicles, titled
watercraft, or
titled
outboard motors, at the location where the
lessee keeps the
leased
property.
(C) If the vendor makes sales of tangible personal
property
from a stock of goods carried in a motor vehicle, from
which the
purchaser makes selection and takes possession, or from
which the
vendor sells tangible personal property the quantity of
which has
not been determined prior to the time the purchaser
takes
possession,
the situs of the sale is
the location of the motor
vehicle when the sale is
made.
(D) If the vendor is a delivery vendor as specified in
division (D) of section 5739.17 of the Revised Code,
the situs of
the sale is
the place
where the
tangible personal property is
delivered, where the
leased
property
is used, or where the service
is performed or
received.
(E) If the vendor provides a service specified in division
(B)(3)(e), (g), (h), (j), (k), (l),
(m), (p), or (t), or (u) of
section
5739.01 of
the Revised Code,
the situs of the sale is
the
location
of the
consumer where the
service is
performed or
received.
(F) If the vendor provides lodging to transient guests as
specified in division (B)(2) of section 5739.01 of the Revised
Code,
the situs of the sale is
the
location where the lodging is
located.
(G) If the vendor sells a warranty, maintenance or service
contract, or similar agreement as specified in division (B)(7) of
section 5739.01 of the Revised Code and the vendor is a delivery
vendor,
the situs of the sale is
the location of the consumer.
If
the vendor is not
a delivery
vendor,
the situs of the sale is
the
vendor's place of business
where the contract or agreement
was
made, unless the warranty or
contract is a component of the
sale
of a titled motor vehicle,
titled watercraft, or titled
outboard
motor, in which case
the
situs of the sale is
the county of
titling.
(H) Except as otherwise provided in this division, if the
vendor
sells a prepaid authorization number or a prepaid telephone
calling card,
the situs of the
sale is
the vendor's place of
business
and shall be
taxed
at the time of sale. If the vendor
sells
a prepaid
authorization
number or prepaid telephone calling
card
through a
telephone call,
electronic commerce, or any other
form
of remote
commerce,
the situs of the
sale is
the consumer's
shipping address, or, if there is no item
shipped, at the
consumer's billing address.
(I) Division (I) of this section applies only if the tax
commissioner makes the certification provided under section
5740.10 of the Revised Code.
(1) In each delivery sale by a vendor permitted to
situs its
sales under this section, the vendor shall clearly
indicate on
the invoice or other similar document provided to the
purchaser
at the time of the sale that the vendor is a vendor
permitted to
situs its sales under this section.
(2) A purchaser that receives tangible personal property or
services in a delivery sale from a vendor permitted to situs its
sales under this section may claim a refund of the tax the vendor
collected and remitted on the sale in an amount equal to the
excess of the tax collected and remitted over the tax that would
have been due if the sale had been sitused to the tax jurisdiction
in which the purchaser received the property or service.
A refund is authorized under this division only if the
invoice or other similar document provided to the purchaser at the
time of the sale includes the notice required under division
(I)(1) of this section.
Refunds shall be filed directly with the tax commissioner and
claimed in the manner prescribed by section
5739.07 of the
Revised Code.
(3) A purchaser of tangible personal property from a vendor
permitted to situs its sales under this section that removes the
property from the tax jurisdiction in which the resident received
the property is liable for additional tax in an amount equal to
the excess of the tax that would have been due on the sale if the
sale had been sitused to the tax jurisdiction to which the
purchaser removed the property over the tax that the vendor
collected and remitted on the sale.
(4) Nothing in this section relieves a person claiming to be
authorized to situs sales under this section, but not so
authorized, from liability for tax, penalty, interest, or
additional charges imposed under this chapter for failure to
collect the amount of tax lawfully due applying the situsing
provisions of divisions (C) to (I) of section 5739.033 of the
Revised Code.
(5) For the purposes of division (I) of this section,
"delivery sale" has the same meaning as in section 5739.033 of the
Revised Code, and "tax jurisdiction" has the same meaning as in
section 5739.24 of the Revised Code.
Sec. 5747.08. An annual return with respect to the tax
imposed by section 5747.02 of the Revised Code and each tax
imposed under Chapter 5748. of the Revised Code shall be made by
every taxpayer for any taxable year for which the taxpayer is
liable for the tax imposed by that section or under that chapter,
unless the total credits allowed under divisions (E), (F), and
(G)
of section 5747.05 of the Revised Code for the year are equal
to
or exceed the tax imposed by section 5747.02 of the Revised
Code,
in which case no return shall be required unless the
taxpayer is
liable for a tax imposed pursuant to Chapter 5748. of
the Revised
Code.
(A) If an individual is deceased, any return or notice
required of that individual under this chapter shall be made and
filed by that decedent's executor, administrator, or other
person
charged with the property of that decedent.
(B) If an individual is unable to make a return or notice
required by this chapter, the return or notice required of that
individual
shall be made and filed by the individual's duly
authorized agent,
guardian, conservator, fiduciary, or other
person charged with
the care of the person or property of that
individual.
(C) Returns or notices required of an estate or a trust
shall
be made and filed by the fiduciary of the estate or trust.
(D)(1)(a) Except as otherwise provided in
division (D)(1)(b)
of this section, any
pass-through entity
may file a single return
on behalf of
one or more of the entity's investors other than an
investor that is a
person subject
to the tax imposed under section
5733.06 of the Revised Code. The single
return shall set forth
the
name, address, and social security number
or other identifying
number of each
of those
pass-through entity investors
and shall
indicate the distributive
share of each of those
pass-through
entity investor's income
taxable in this state
in accordance with
sections 5747.20 to
5747.231 of the
Revised
Code. Such
pass-through entity investors
for whom the pass-through entity
elects to file a single return
are not entitled to the exemption
or credit provided for by
sections 5747.02 and 5747.022 of the
Revised
Code; shall calculate
the tax
before business credits at
the highest rate of tax set
forth in
section 5747.02 of the
Revised
Code for the taxable year
for
which the return is filed;
and are entitled to only their
distributive share of the business
credits as defined in
division
(D)(2) of this
section. A single
check drawn by the pass-through
entity shall
accompany
the return
in full payment of the tax due, as shown on the single return,
for
such investors, other than investors who are persons
subject to
the tax imposed under section 5733.06 of the
Revised Code.
(b)(i) A pass-through entity shall not
include in such a
single return any investor that is a trust to
the extent that any
direct or indirect current, future, or
contingent beneficiary of
the trust is a person subject to the
tax imposed under section
5733.06 of the
Revised Code.
(ii) A pass-through entity shall
not include in such a
single
return any investor that is itself
a pass-through entity to
the
extent that any direct or indirect
investor in the second
pass-through entity is a person subject
to the tax imposed under
section 5733.06 of the
Revised Code.
(c) Nothing in division
(D) of this section precludes
the
tax
commissioner from requiring such investors to file the
return
and
make the payment of taxes and related interest,
penalty, and
interest penalty required by this section or
section 5747.02,
5747.09, or 5747.15 of the
Revised Code. Nothing in division
(D)
of this section shall be
construed to provide to such an investor
or pass-through entity
any additional deduction or credit, other
than the credit
provided by division (J) of
this section, solely
on account of the entity's filing a return
in accordance with this
section. Such a pass-through entity also
shall make the filing
and
payment of estimated taxes on behalf of the pass-through
entity
investors other than an
investor that is a person subject
to the
tax imposed under section 5733.06
of the Revised Code.
(2) For the purposes of
this section,
"business credits"
means the credits
listed in section 5747.98 of the
Revised
Code
excluding the following
credits:
(a) The retirement credit under division (B) of section
5747.055 of
the Revised Code;
(b) The senior citizen credit under
division (C) of section
5747.05 of the Revised Code;
(c) The lump sum distribution credit
under division (D) of
section
5747.05 of the Revised
Code;
(d) The dependent care credit under
section 5747.054 of the
Revised
Code;
(e) The lump sum retirement income
credit under division (C)
of
section 5747.055 of the Revised
Code;
(f) The lump sum retirement income
credit under division (D)
of
section 5747.055 of the Revised
Code;
(g) The lump sum retirement income
credit under division (E)
of
section 5747.055 of the Revised
Code;
(h) The credit for displaced workers
who pay for job
training
under section 5747.27 of the
Revised
Code;
(i) The twenty-dollar personal
exemption credit under
section
5747.022 of the
Revised
Code;
(j) The joint filing credit under
division (G) of section
5747.05
of the Revised
Code;
(k) The nonresident credit under
division (A) of section
5747.05
of the Revised
Code;
(l) The credit for a resident's
out-of-state income under
division
(B) of section 5747.05 of the
Revised
Code;
(m) The low-income credit under section 5747.056 of the
Revised Code.
(3) The election provided for under division
(D) of this
section applies
only to the taxable year for which the election is
made by the
pass-through entity. Unless the tax commissioner
provides
otherwise, this election, once made, is binding and
irrevocable
for the taxable year for which the election is made.
Nothing in
this division shall be construed to provide for any
deduction or
credit that would not be allowable if a nonresident
pass-through
entity investor were to file an annual return.
(4) If a pass-through entity makes the election provided
for
under division (D) of this
section, the pass-through entity shall
be liable for any
additional taxes, interest, interest penalty, or
penalties imposed by this
chapter
if the tax
commissioner
finds
that
the single return does
not reflect the
correct tax
due by
the
pass-through
entity investors
covered by that
return. Nothing in
this
division shall be
construed to limit or
alter the liability,
if
any, imposed on
pass-through entity
investors for unpaid or
underpaid taxes,
interest, interest
penalty, or penalties as a
result of the
pass-through entity's
making the election provided
for under
division (D) of this
section.
For the purposes of
division
(D) of
this section,
"correct tax due" means the tax that
would have been
paid by the
pass-through entity had the single
return been filed
in a manner
reflecting
the tax
commissioner's
findings. Nothing
in
division (D) of this section
shall be
construed to make or hold
a
pass-through entity liable
for tax
attributable to a
pass-through
entity investor's
income
from a
source other than the
pass-through
entity electing
to file
the
single return.
(E) If a husband and wife file a joint federal income tax
return for a taxable year, they shall file a joint return under
this section for that taxable year, and their liabilities are
joint and several, but, if the federal income tax liability of
either spouse is determined on a separate federal income tax
return, they shall file separate returns under this section.
If either spouse is not required to file a federal income
tax
return and either or both are required to file a return
pursuant
to this chapter, they may elect to file separate or
joint returns,
and, pursuant to that election, their liabilities are
separate or
joint and several. If a husband and wife file
separate returns
pursuant to this chapter, each must claim the taxpayer's
own
exemption, but not both, as authorized under
section
5747.02 of
the Revised Code on the taxpayer's own
return.
(F) Each return or notice required to be filed under this
section shall contain the signature of the taxpayer
or the
taxpayer's duly authorized
agent and of the person who prepared
the return for the
taxpayer, and shall include the taxpayer's
social security
number. Each return shall be verified by a
declaration
under the penalties of perjury. The tax commissioner
shall prescribe the
form that the signature and declaration shall
take.
(G) Each return or notice required to be filed under this
section shall be made and filed as required by section 5747.04 of
the Revised Code, on or before the fifteenth day of April of each
year, on forms that the tax commissioner shall prescribe,
together
with remittance made payable to the treasurer of state
in the
combined amount of the state and all school district
income taxes
shown to be due on the form, unless the combined amount
shown to
be due is one dollar or less, in which case that amount
need not
be remitted.
Upon good cause shown, the tax commissioner may extend the
period
for filing any notice or return required to be filed under
this
section and may adopt rules relating to extensions. If the
extension results in an extension of time for the payment of any
state or school district income tax liability with respect to
which the return is filed, the taxpayer shall pay at the time the
tax liability is paid an amount of interest computed at the rate
per annum prescribed by section 5703.47 of the Revised Code on
that liability from the time that payment is due without
extension
to the time of actual payment. Except as
provided in section
5747.132 of the Revised Code, in
addition to all
other interest
charges and penalties, all taxes imposed under this chapter
or
Chapter 5748. of the
Revised
Code and remaining
unpaid after they
become due, except combined amounts due of one
dollar or less,
bear interest at the rate per annum prescribed by
section 5703.47
of the Revised Code until paid or until the day an
assessment is
issued under section 5747.13 of the Revised Code, whichever
occurs
first.
If the tax commissioner
considers it necessary in order to
ensure
the payment of the tax imposed by
section 5747.02 of the
Revised
Code or any tax imposed under
Chapter 5748. of the Revised
Code,
the tax commissioner may require
returns and payments to be
made
otherwise than as provided in
this section.
To the extent that any provision in this division conflicts
with any provision in section 5747.026 of the Revised Code, the
provision in that section prevails.
(H) If any report, claim, statement, or other document
required to be filed, or any payment required to be made, within
a
prescribed period or on or before a prescribed date under this
chapter is delivered after that period or that date by United
States mail to the agency, officer, or office with which the
report, claim,
statement, or other document is required to be
filed, or to which the payment is required to be made, the date
of
the postmark stamped on the cover in which the report, claim,
statement, or other document, or payment is mailed shall be
deemed
to be the date of delivery or the date of payment.
If a payment is required to be made by electronic funds
transfer pursuant to section 5747.072 of the Revised Code, the
payment is considered to be made when the payment is received by
the treasurer of state or credited to an account designated by
the
treasurer of state for the receipt of tax payments.
"The date of the postmark" means, in the event there
is more
than one date on the cover, the earliest date imprinted
on the
cover by the United States postal service.
(I) The amounts withheld by the employer pursuant to
section
5747.06 of the Revised Code shall be allowed to the
recipient of
the compensation as credits against payment of the
appropriate
taxes imposed on the recipient by section
5747.02 and under
Chapter 5748. of the Revised Code.
(J) If, in accordance
with division (D) of this
section, a
pass-through entity elects to file a single return
and if any
investor is required to file the return and make the
payment of
taxes required by this chapter on account of the
investor's other
income that is not included in a single return
filed by a
pass-through entity, the investor is entitled to a
refundable
credit equal to the investor's proportionate share of
the tax paid
by the pass-through entity on behalf of the
investor. The
investor
shall claim the credit for the
investor's taxable year in
which or
with which ends the taxable
year of the pass-through
entity.
Nothing in this chapter shall
be construed to allow any
credit
provided in this chapter to be
claimed more than once. For
the
purposes of computing any
interest, penalty, or interest
penalty,
the investor shall be
deemed to have paid the refundable
credit
provided by this
division on the day that the pass-through
entity
paid the
estimated tax or the tax giving rise to the
credit.
(K) The tax commissioner shall ensure that each return
required to be filed under this section includes a box that the
taxpayer may check to authorize a paid tax preparer who prepared
the return to communicate with the department of taxation about
matters pertaining to the return. The return or instructions
accompanying the return shall indicate that by checking the box
the taxpayer authorizes the department of taxation to contact the
preparer concerning questions that arise during the processing of
the return and authorizes the preparer only to provide the
department with information that is missing from the return, to
contact the department for information about the processing of the
return or the status of the taxpayer's refund or payments, and to
respond to notices about mathematical errors, offsets, or return
preparation that the taxpayer has received from the department and
has shown to the preparer.
SECTION 2. That existing sections 3953.33, 5701.11, 5739.01,
5739.02,
5739.035,
and 5747.08 of the Revised Code
are hereby
repealed.
SECTION 3. The amendments by this act of sections 5701.11,
5739.01,
5739.02, and 5739.035 of the Revised Code provide for or
are
essential to implementation of a tax levy. Therefore, under
Ohio
Constitution, Article II, Section 1d, the amendments, and
the
items of which they are composed, are not subject to the
referendum and go into immediate effect when this act becomes law.
SECTION 4. Section 5739.01 of the Revised Code is
presented
in
this act as a composite of the section as amended by
both Sub.
H.B. 293 and Am. Sub. H.B. 699 of
the 126th General
Assembly. The
General Assembly, applying the
principle stated in
division (B)
of section 1.52 of the Revised
Code that amendments
are to be
harmonized if reasonably capable of
simultaneous
operation, finds
that the composite is the resulting
version of
the section in
effect prior to the effective date of
the section
as presented in
this act.
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