Bill Text: OH HB600 | 2013-2014 | 130th General Assembly | Introduced

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Bill Title: To earmark new Ohio use tax collections by remote sellers for the purposes of paying back amounts borrowed by the state from the federal government to issue unemployment benefits and reducing the rates of the sales and use tax and commercial activity tax.

Spectrum: Partisan Bill (Republican 4-0)

Status: (Introduced - Dead) 2014-07-28 - To Ways and Means [HB600 Detail]

Download: Ohio-2013-HB600-Introduced.html

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As Introduced

130th General Assembly Regular Session 2013-2014

H. B. No. 600

Representatives Beck, Adams, J. 

Cosponsors: Representatives Retherford, Brenner 

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A BILL

To amend sections 5739.02, 5741.02, 5741.03, and

1

5751.03 and to enact sections 5739.20 and 5751.031

2

of the Revised Code to earmark new Ohio use tax

3

collections by remote sellers for the purposes of

4

paying back amounts borrowed by the state from the

5

federal government to issue unemployment benefits

6

and reducing the rates of the sales and use tax

7

and commercial activity tax.

8

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

Section 1. That sections 5739.02, 5741.02, 5741.03, and	9
5751.03 be amended and sections 5739.20 and 5751.031 of the	10
Revised Code be enacted to read as follows:	11

Sec. 5739.02.  For the purpose of providing revenue with	12
which to meet the needs of the state, for the use of the general	13
revenue fund of the state, for the purpose of securing a thorough	14
and efficient system of common schools throughout the state, for	15
the purpose of affording revenues, in addition to those from	16
general property taxes, permitted under constitutional	17
limitations, and from other sources, for the support of local	18
governmental functions, and for the purpose of reimbursing the	19
state for the expense of administering this chapter, an excise tax	20
is hereby levied on each retail sale made in this state.	21

(A)(1) The tax shall be collected as provided in section	22
5739.025 of the Revised Code. TheExcept as provided in section	23
5739.20 of the Revised Code, the rate of the tax shall be five and	24
three-fourths per cent. The tax applies and is collectible when	25
the sale is made, regardless of the time when the price is paid or	26
delivered.	27

(2) In the case of the lease or rental, with a fixed term of	28
more than thirty days or an indefinite term with a minimum period	29
of more than thirty days, of any motor vehicles designed by the	30
manufacturer to carry a load of not more than one ton, watercraft,	31
outboard motor, or aircraft, or of any tangible personal property,	32
other than motor vehicles designed by the manufacturer to carry a	33
load of more than one ton, to be used by the lessee or renter	34
primarily for business purposes, the tax shall be collected by the	35
vendor at the time the lease or rental is consummated and shall be	36
calculated by the vendor on the basis of the total amount to be	37
paid by the lessee or renter under the lease agreement. If the	38
total amount of the consideration for the lease or rental includes	39
amounts that are not calculated at the time the lease or rental is	40
executed, the tax shall be calculated and collected by the vendor	41
at the time such amounts are billed to the lessee or renter. In	42
the case of an open-end lease or rental, the tax shall be	43
calculated by the vendor on the basis of the total amount to be	44
paid during the initial fixed term of the lease or rental, and for	45
each subsequent renewal period as it comes due. As used in this	46
division, "motor vehicle" has the same meaning as in section	47
4501.01 of the Revised Code, and "watercraft" includes an outdrive	48
unit attached to the watercraft.	49

A lease with a renewal clause and a termination penalty or	50
similar provision that applies if the renewal clause is not	51
exercised is presumed to be a sham transaction. In such a case,	52
the tax shall be calculated and paid on the basis of the entire	53
length of the lease period, including any renewal periods, until	54
the termination penalty or similar provision no longer applies.	55
The taxpayer shall bear the burden, by a preponderance of the	56
evidence, that the transaction or series of transactions is not a	57
sham transaction.	58

(3) Except as provided in division (A)(2) of this section, in	59
the case of a sale, the price of which consists in whole or in	60
part of the lease or rental of tangible personal property, the tax	61
shall be measured by the installments of that lease or rental.	62

(4) In the case of a sale of a physical fitness facility	63
service or recreation and sports club service, the price of which	64
consists in whole or in part of a membership for the receipt of	65
the benefit of the service, the tax applicable to the sale shall	66
be measured by the installments thereof.	67

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

68

(1) Sales to the state or any of its political subdivisions,	69
or to any other state or its political subdivisions if the laws of	70
that state exempt from taxation sales made to this state and its	71
political subdivisions;	72

(2) Sales of food for human consumption off the premises	73
where sold;	74

(3) Sales of food sold to students only in a cafeteria,	75
dormitory, fraternity, or sorority maintained in a private,	76
public, or parochial school, college, or university;	77

(4) Sales of newspapers and sales or transfers of magazines	78
distributed as controlled circulation publications;	79

(5) The furnishing, preparing, or serving of meals without	80
charge by an employer to an employee provided the employer records	81
the meals as part compensation for services performed or work	82
done;	83

(6) Sales of motor fuel upon receipt, use, distribution, or	84
sale of which in this state a tax is imposed by the law of this	85
state, but this exemption shall not apply to the sale of motor	86
fuel on which a refund of the tax is allowable under division (A)	87
of section 5735.14 of the Revised Code; and the tax commissioner	88
may deduct the amount of tax levied by this section applicable to	89
the price of motor fuel when granting a refund of motor fuel tax	90
pursuant to division (A) of section 5735.14 of the Revised Code	91
and shall cause the amount deducted to be paid into the general	92
revenue fund of this state;	93

(7) Sales of natural gas by a natural gas company, of water	94
by a water-works company, or of steam by a heating company, if in	95
each case the thing sold is delivered to consumers through pipes	96
or conduits, and all sales of communications services by a	97
telegraph company, all terms as defined in section 5727.01 of the	98
Revised Code, and sales of electricity delivered through wires;	99

(8) Casual sales by a person, or auctioneer employed directly	100
by the person to conduct such sales, except as to such sales of	101
motor vehicles, watercraft or outboard motors required to be	102
titled under section 1548.06 of the Revised Code, watercraft	103
documented with the United States coast guard, snowmobiles, and	104
all-purpose vehicles as defined in section 4519.01 of the Revised	105
Code;	106

(9)(a) Sales of services or tangible personal property, other	107
than motor vehicles, mobile homes, and manufactured homes, by	108
churches, organizations exempt from taxation under section	109
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit	110
organizations operated exclusively for charitable purposes as	111
defined in division (B)(12) of this section, provided that the	112
number of days on which such tangible personal property or	113
services, other than items never subject to the tax, are sold does	114
not exceed six in any calendar year, except as otherwise provided	115
in division (B)(9)(b) of this section. If the number of days on	116
which such sales are made exceeds six in any calendar year, the	117
church or organization shall be considered to be engaged in	118
business and all subsequent sales by it shall be subject to the	119
tax. In counting the number of days, all sales by groups within a	120
church or within an organization shall be considered to be sales	121
of that church or organization.	122

(b) The limitation on the number of days on which tax-exempt	123
sales may be made by a church or organization under division	124
(B)(9)(a) of this section does not apply to sales made by student	125
clubs and other groups of students of a primary or secondary	126
school, or a parent-teacher association, booster group, or similar	127
organization that raises money to support or fund curricular or	128
extracurricular activities of a primary or secondary school.	129

(c) Divisions (B)(9)(a) and (b) of this section do not apply	130
to sales by a noncommercial educational radio or television	131
broadcasting station.	132

(10) Sales not within the taxing power of this state under	133
the Constitution or laws of the United States or the Constitution	134
of this state;	135

(11) Except for transactions that are sales under division	136
(B)(3)(r) of section 5739.01 of the Revised Code, the	137
transportation of persons or property, unless the transportation	138
is by a private investigation and security service;	139

(12) Sales of tangible personal property or services to	140
churches, to organizations exempt from taxation under section	141
501(c)(3) of the Internal Revenue Code of 1986, and to any other	142
nonprofit organizations operated exclusively for charitable	143
purposes in this state, no part of the net income of which inures	144
to the benefit of any private shareholder or individual, and no	145
substantial part of the activities of which consists of carrying	146
on propaganda or otherwise attempting to influence legislation;	147
sales to offices administering one or more homes for the aged or	148
one or more hospital facilities exempt under section 140.08 of the	149
Revised Code; and sales to organizations described in division (D)	150
of section 5709.12 of the Revised Code.	151

"Charitable purposes" means the relief of poverty; the	152
improvement of health through the alleviation of illness, disease,	153
or injury; the operation of an organization exclusively for the	154
provision of professional, laundry, printing, and purchasing	155
services to hospitals or charitable institutions; the operation of	156
a home for the aged, as defined in section 5701.13 of the Revised	157
Code; the operation of a radio or television broadcasting station	158
that is licensed by the federal communications commission as a	159
noncommercial educational radio or television station; the	160
operation of a nonprofit animal adoption service or a county	161
humane society; the promotion of education by an institution of	162
learning that maintains a faculty of qualified instructors,	163
teaches regular continuous courses of study, and confers a	164
recognized diploma upon completion of a specific curriculum; the	165
operation of a parent-teacher association, booster group, or	166
similar organization primarily engaged in the promotion and	167
support of the curricular or extracurricular activities of a	168
primary or secondary school; the operation of a community or area	169
center in which presentations in music, dramatics, the arts, and	170
related fields are made in order to foster public interest and	171
education therein; the production of performances in music,	172
dramatics, and the arts; or the promotion of education by an	173
organization engaged in carrying on research in, or the	174
dissemination of, scientific and technological knowledge and	175
information primarily for the public.	176

Nothing in this division shall be deemed to exempt sales to	177
any organization for use in the operation or carrying on of a	178
trade or business, or sales to a home for the aged for use in the	179
operation of independent living facilities as defined in division	180
(A) of section 5709.12 of the Revised Code.	181

(13) Building and construction materials and services sold to	182
construction contractors for incorporation into a structure or	183
improvement to real property under a construction contract with	184
this state or a political subdivision of this state, or with the	185
United States government or any of its agencies; building and	186
construction materials and services sold to construction	187
contractors for incorporation into a structure or improvement to	188
real property that are accepted for ownership by this state or any	189
of its political subdivisions, or by the United States government	190
or any of its agencies at the time of completion of the structures	191
or improvements; building and construction materials sold to	192
construction contractors for incorporation into a horticulture	193
structure or livestock structure for a person engaged in the	194
business of horticulture or producing livestock; building	195
materials and services sold to a construction contractor for	196
incorporation into a house of public worship or religious	197
education, or a building used exclusively for charitable purposes	198
under a construction contract with an organization whose purpose	199
is as described in division (B)(12) of this section; building	200
materials and services sold to a construction contractor for	201
incorporation into a building under a construction contract with	202
an organization exempt from taxation under section 501(c)(3) of	203
the Internal Revenue Code of 1986 when the building is to be used	204
exclusively for the organization's exempt purposes; building and	205
construction materials sold for incorporation into the original	206
construction of a sports facility under section 307.696 of the	207
Revised Code; building and construction materials and services	208
sold to a construction contractor for incorporation into real	209
property outside this state if such materials and services, when	210
sold to a construction contractor in the state in which the real	211
property is located for incorporation into real property in that	212
state, would be exempt from a tax on sales levied by that state;	213
building and construction materials for incorporation into a	214
transportation facility pursuant to a public-private agreement	215
entered into under sections 5501.70 to 5501.83 of the Revised	216
Code; and, until one calendar year after the construction of a	217
convention center that qualifies for property tax exemption under	218
section 5709.084 of the Revised Code is completed, building and	219
construction materials and services sold to a construction	220
contractor for incorporation into the real property comprising	221
that convention center;	222

(14) Sales of ships or vessels or rail rolling stock used or	223
to be used principally in interstate or foreign commerce, and	224
repairs, alterations, fuel, and lubricants for such ships or	225
vessels or rail rolling stock;	226

(15) Sales to persons primarily engaged in any of the	227
activities mentioned in division (B)(42)(a), (g), or (h) of this	228
section, to persons engaged in making retail sales, or to persons	229
who purchase for sale from a manufacturer tangible personal	230
property that was produced by the manufacturer in accordance with	231
specific designs provided by the purchaser, of packages, including	232
material, labels, and parts for packages, and of machinery,	233
equipment, and material for use primarily in packaging tangible	234
personal property produced for sale, including any machinery,	235
equipment, and supplies used to make labels or packages, to	236
prepare packages or products for labeling, or to label packages or	237
products, by or on the order of the person doing the packaging, or	238
sold at retail. "Packages" includes bags, baskets, cartons,	239
crates, boxes, cans, bottles, bindings, wrappings, and other	240
similar devices and containers, but does not include motor	241
vehicles or bulk tanks, trailers, or similar devices attached to	242
motor vehicles. "Packaging" means placing in a package. Division	243
(B)(15) of this section does not apply to persons engaged in	244
highway transportation for hire.	245

(16) Sales of food to persons using supplemental nutrition	246
assistance program benefits to purchase the food. As used in this	247
division, "food" has the same meaning as in 7 U.S.C. 2012 and	248
federal regulations adopted pursuant to the Food and Nutrition Act	249
of 2008.	250

(17) Sales to persons engaged in farming, agriculture,	251
horticulture, or floriculture, of tangible personal property for	252
use or consumption primarily in the production by farming,	253
agriculture, horticulture, or floriculture of other tangible	254
personal property for use or consumption primarily in the	255
production of tangible personal property for sale by farming,	256
agriculture, horticulture, or floriculture; or material and parts	257
for incorporation into any such tangible personal property for use	258
or consumption in production; and of tangible personal property	259
for such use or consumption in the conditioning or holding of	260
products produced by and for such use, consumption, or sale by	261
persons engaged in farming, agriculture, horticulture, or	262
floriculture, except where such property is incorporated into real	263
property;	264

(18) Sales of drugs for a human being that may be dispensed	265
only pursuant to a prescription; insulin as recognized in the	266
official United States pharmacopoeia; urine and blood testing	267
materials when used by diabetics or persons with hypoglycemia to	268
test for glucose or acetone; hypodermic syringes and needles when	269
used by diabetics for insulin injections; epoetin alfa when	270
purchased for use in the treatment of persons with medical	271
disease; hospital beds when purchased by hospitals, nursing homes,	272
or other medical facilities; and medical oxygen and medical	273
oxygen-dispensing equipment when purchased by hospitals, nursing	274
homes, or other medical facilities;	275

(19) Sales of prosthetic devices, durable medical equipment	276
for home use, or mobility enhancing equipment, when made pursuant	277
to a prescription and when such devices or equipment are for use	278
by a human being.	279

(20) Sales of emergency and fire protection vehicles and	280
equipment to nonprofit organizations for use solely in providing	281
fire protection and emergency services, including trauma care and	282
emergency medical services, for political subdivisions of the	283
state;	284

(21) Sales of tangible personal property manufactured in this	285
state, if sold by the manufacturer in this state to a retailer for	286
use in the retail business of the retailer outside of this state	287
and if possession is taken from the manufacturer by the purchaser	288
within this state for the sole purpose of immediately removing the	289
same from this state in a vehicle owned by the purchaser;	290

(22) Sales of services provided by the state or any of its	291
political subdivisions, agencies, instrumentalities, institutions,	292
or authorities, or by governmental entities of the state or any of	293
its political subdivisions, agencies, instrumentalities,	294
institutions, or authorities;	295

(23) Sales of motor vehicles to nonresidents of this state	296
under the circumstances described in division (B) of section	297
5739.029 of the Revised Code;	298

(24) Sales to persons engaged in the preparation of eggs for	299
sale of tangible personal property used or consumed directly in	300
such preparation, including such tangible personal property used	301
for cleaning, sanitizing, preserving, grading, sorting, and	302
classifying by size; packages, including material and parts for	303
packages, and machinery, equipment, and material for use in	304
packaging eggs for sale; and handling and transportation equipment	305
and parts therefor, except motor vehicles licensed to operate on	306
public highways, used in intraplant or interplant transfers or	307
shipment of eggs in the process of preparation for sale, when the	308
plant or plants within or between which such transfers or	309
shipments occur are operated by the same person. "Packages"	310
includes containers, cases, baskets, flats, fillers, filler flats,	311
cartons, closure materials, labels, and labeling materials, and	312
"packaging" means placing therein.	313

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

314

(b) Sales of water by a nonprofit corporation engaged	315
exclusively in the treatment, distribution, and sale of water to	316
consumers, if such water is delivered to consumers through pipes	317
or tubing.	318

(26) Fees charged for inspection or reinspection of motor	319
vehicles under section 3704.14 of the Revised Code;	320

(27) Sales to persons licensed to conduct a food service	321
operation pursuant to section 3717.43 of the Revised Code, of	322
tangible personal property primarily used directly for the	323
following:	324

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

325

(b) To preserve food that has been or will be prepared for	326
human consumption for sale by the food service operator, not	327
including tangible personal property used to display food for	328
selection by the consumer;	329

(c) To clean tangible personal property used to prepare or	330
serve food for human consumption for sale.	331

(28) Sales of animals by nonprofit animal adoption services	332
or county humane societies;	333

(29) Sales of services to a corporation described in division	334
(A) of section 5709.72 of the Revised Code, and sales of tangible	335
personal property that qualifies for exemption from taxation under	336
section 5709.72 of the Revised Code;	337

(30) Sales and installation of agricultural land tile, as	338
defined in division (B)(5)(a) of section 5739.01 of the Revised	339
Code;	340

(31) Sales and erection or installation of portable grain	341
bins, as defined in division (B)(5)(b) of section 5739.01 of the	342
Revised Code;	343

(32) The sale, lease, repair, and maintenance of, parts for,	344
or items attached to or incorporated in, motor vehicles that are	345
primarily used for transporting tangible personal property	346
belonging to others by a person engaged in highway transportation	347
for hire, except for packages and packaging used for the	348
transportation of tangible personal property;	349

(33) Sales to the state headquarters of any veterans'	350
organization in this state that is either incorporated and issued	351
a charter by the congress of the United States or is recognized by	352
the United States veterans administration, for use by the	353
headquarters;	354

(34) Sales to a telecommunications service vendor, mobile	355
telecommunications service vendor, or satellite broadcasting	356
service vendor of tangible personal property and services used	357
directly and primarily in transmitting, receiving, switching, or	358
recording any interactive, one- or two-way electromagnetic	359
communications, including voice, image, data, and information,	360
through the use of any medium, including, but not limited to,	361
poles, wires, cables, switching equipment, computers, and record	362
storage devices and media, and component parts for the tangible	363
personal property. The exemption provided in this division shall	364
be in lieu of all other exemptions under division (B)(42)(a) or	365
(n) of this section to which the vendor may otherwise be entitled,	366
based upon the use of the thing purchased in providing the	367
telecommunications, mobile telecommunications, or satellite	368
broadcasting service.	369

(35)(a) Sales where the purpose of the consumer is to use or	370
consume the things transferred in making retail sales and	371
consisting of newspaper inserts, catalogues, coupons, flyers, gift	372
certificates, or other advertising material that prices and	373
describes tangible personal property offered for retail sale.	374

(b) Sales to direct marketing vendors of preliminary	375
materials such as photographs, artwork, and typesetting that will	376
be used in printing advertising material; and of printed matter	377
that offers free merchandise or chances to win sweepstake prizes	378
and that is mailed to potential customers with advertising	379
material described in division (B)(35)(a) of this section;	380

(c) Sales of equipment such as telephones, computers,	381
facsimile machines, and similar tangible personal property	382
primarily used to accept orders for direct marketing retail sales.	383

(d) Sales of automatic food vending machines that preserve	384
food with a shelf life of forty-five days or less by refrigeration	385
and dispense it to the consumer.	386

For purposes of division (B)(35) of this section, "direct	387
marketing" means the method of selling where consumers order	388
tangible personal property by United States mail, delivery	389
service, or telecommunication and the vendor delivers or ships the	390
tangible personal property sold to the consumer from a warehouse,	391
catalogue distribution center, or similar fulfillment facility by	392
means of the United States mail, delivery service, or common	393
carrier.	394

(36) Sales to a person engaged in the business of	395
horticulture or producing livestock of materials to be	396
incorporated into a horticulture structure or livestock structure;	397

(37) Sales of personal computers, computer monitors, computer	398
keyboards, modems, and other peripheral computer equipment to an	399
individual who is licensed or certified to teach in an elementary	400
or a secondary school in this state for use by that individual in	401
preparation for teaching elementary or secondary school students;	402

(38) Sales to a professional racing team of any of the	403
following:	404

(a) Motor racing vehicles;

405

(b) Repair services for motor racing vehicles;

406

(c) Items of property that are attached to or incorporated in	407
motor racing vehicles, including engines, chassis, and all other	408
components of the vehicles, and all spare, replacement, and	409
rebuilt parts or components of the vehicles; except not including	410
tires, consumable fluids, paint, and accessories consisting of	411
instrumentation sensors and related items added to the vehicle to	412
collect and transmit data by means of telemetry and other forms of	413
communication.	414

(39) Sales of used manufactured homes and used mobile homes,	415
as defined in section 5739.0210 of the Revised Code, made on or	416
after January 1, 2000;	417

(40) Sales of tangible personal property and services to a	418
provider of electricity used or consumed directly and primarily in	419
generating, transmitting, or distributing electricity for use by	420
others, including property that is or is to be incorporated into	421
and will become a part of the consumer's production, transmission,	422
or distribution system and that retains its classification as	423
tangible personal property after incorporation; fuel or power used	424
in the production, transmission, or distribution of electricity;	425
energy conversion equipment as defined in section 5727.01 of the	426
Revised Code; and tangible personal property and services used in	427
the repair and maintenance of the production, transmission, or	428
distribution system, including only those motor vehicles as are	429
specially designed and equipped for such use. The exemption	430
provided in this division shall be in lieu of all other exemptions	431
in division (B)(42)(a) or (n) of this section to which a provider	432
of electricity may otherwise be entitled based on the use of the	433
tangible personal property or service purchased in generating,	434
transmitting, or distributing electricity.	435

(41) Sales to a person providing services under division	436
(B)(3)(r) of section 5739.01 of the Revised Code of tangible	437
personal property and services used directly and primarily in	438
providing taxable services under that section.	439

(42) Sales where the purpose of the purchaser is to do any of	440
the following:	441

(a) To incorporate the thing transferred as a material or a	442
part into tangible personal property to be produced for sale by	443
manufacturing, assembling, processing, or refining; or to use or	444
consume the thing transferred directly in producing tangible	445
personal property for sale by mining, including, without	446
limitation, the extraction from the earth of all substances that	447
are classed geologically as minerals, production of crude oil and	448
natural gas, or directly in the rendition of a public utility	449
service, except that the sales tax levied by this section shall be	450
collected upon all meals, drinks, and food for human consumption	451
sold when transporting persons. Persons engaged in rendering	452
services in the exploration for, and production of, crude oil and	453
natural gas for others are deemed engaged directly in the	454
exploration for, and production of, crude oil and natural gas.	455
This paragraph does not exempt from "retail sale" or "sales at	456
retail" the sale of tangible personal property that is to be	457
incorporated into a structure or improvement to real property.	458

(b) To hold the thing transferred as security for the	459
performance of an obligation of the vendor;	460

(c) To resell, hold, use, or consume the thing transferred as	461
evidence of a contract of insurance;	462

(d) To use or consume the thing directly in commercial	463
fishing;	464

(e) To incorporate the thing transferred as a material or a	465
part into, or to use or consume the thing transferred directly in	466
the production of, magazines distributed as controlled circulation	467
publications;	468

(f) To use or consume the thing transferred in the production	469
and preparation in suitable condition for market and sale of	470
printed, imprinted, overprinted, lithographic, multilithic,	471
blueprinted, photostatic, or other productions or reproductions of	472
written or graphic matter;	473

(g) To use the thing transferred, as described in section	474
5739.011 of the Revised Code, primarily in a manufacturing	475
operation to produce tangible personal property for sale;	476

(h) To use the benefit of a warranty, maintenance or service	477
contract, or similar agreement, as described in division (B)(7) of	478
section 5739.01 of the Revised Code, to repair or maintain	479
tangible personal property, if all of the property that is the	480
subject of the warranty, contract, or agreement would not be	481
subject to the tax imposed by this section;	482

(i) To use the thing transferred as qualified research and	483
development equipment;	484

(j) To use or consume the thing transferred primarily in	485
storing, transporting, mailing, or otherwise handling purchased	486
sales inventory in a warehouse, distribution center, or similar	487
facility when the inventory is primarily distributed outside this	488
state to retail stores of the person who owns or controls the	489
warehouse, distribution center, or similar facility, to retail	490
stores of an affiliated group of which that person is a member, or	491
by means of direct marketing. This division does not apply to	492
motor vehicles registered for operation on the public highways. As	493
used in this division, "affiliated group" has the same meaning as	494
in division (B)(3)(e) of section 5739.01 of the Revised Code and	495
"direct marketing" has the same meaning as in division (B)(35) of	496
this section.	497

(k) To use or consume the thing transferred to fulfill a	498
contractual obligation incurred by a warrantor pursuant to a	499
warranty provided as a part of the price of the tangible personal	500
property sold or by a vendor of a warranty, maintenance or service	501
contract, or similar agreement the provision of which is defined	502
as a sale under division (B)(7) of section 5739.01 of the Revised	503
Code;	504

(l) To use or consume the thing transferred in the production	505
of a newspaper for distribution to the public;	506

(m) To use tangible personal property to perform a service	507
listed in division (B)(3) of section 5739.01 of the Revised Code,	508
if the property is or is to be permanently transferred to the	509
consumer of the service as an integral part of the performance of	510
the service;	511

(n) To use or consume the thing transferred primarily in	512
producing tangible personal property for sale by farming,	513
agriculture, horticulture, or floriculture. Persons engaged in	514
rendering farming, agriculture, horticulture, or floriculture	515
services for others are deemed engaged primarily in farming,	516
agriculture, horticulture, or floriculture. This paragraph does	517
not exempt from "retail sale" or "sales at retail" the sale of	518
tangible personal property that is to be incorporated into a	519
structure or improvement to real property.	520

(o) To use or consume the thing transferred in acquiring,	521
formatting, editing, storing, and disseminating data or	522
information by electronic publishing.	523

As used in division (B)(42) of this section, "thing" includes	524
all transactions included in divisions (B)(3)(a), (b), and (e) of	525
section 5739.01 of the Revised Code.	526

(43) Sales conducted through a coin operated device that	527
activates vacuum equipment or equipment that dispenses water,	528
whether or not in combination with soap or other cleaning agents	529
or wax, to the consumer for the consumer's use on the premises in	530
washing, cleaning, or waxing a motor vehicle, provided no other	531
personal property or personal service is provided as part of the	532
transaction.	533

(44) Sales of replacement and modification parts for engines,	534
airframes, instruments, and interiors in, and paint for, aircraft	535
used primarily in a fractional aircraft ownership program, and	536
sales of services for the repair, modification, and maintenance of	537
such aircraft, and machinery, equipment, and supplies primarily	538
used to provide those services.	539

(45) Sales of telecommunications service that is used	540
directly and primarily to perform the functions of a call center.	541
As used in this division, "call center" means any physical	542
location where telephone calls are placed or received in high	543
volume for the purpose of making sales, marketing, customer	544
service, technical support, or other specialized business	545
activity, and that employs at least fifty individuals that engage	546
in call center activities on a full-time basis, or sufficient	547
individuals to fill fifty full-time equivalent positions.	548

(46) Sales by a telecommunications service vendor of 900	549
service to a subscriber. This division does not apply to	550
information services, as defined in division (FF) of section	551
5739.01 of the Revised Code.	552

(47) Sales of value-added non-voice data service. This	553
division does not apply to any similar service that is not	554
otherwise a telecommunications service.	555

(48)(a) Sales of machinery, equipment, and software to a	556
qualified direct selling entity for use in a warehouse or	557
distribution center primarily for storing, transporting, or	558
otherwise handling inventory that is held for sale to independent	559
salespersons who operate as direct sellers and that is held	560
primarily for distribution outside this state;	561

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

562

(i) "Direct seller" means a person selling consumer products	563
to individuals for personal or household use and not from a fixed	564
retail location, including selling such product at in-home product	565
demonstrations, parties, and other one-on-one selling.	566

(ii) "Qualified direct selling entity" means an entity	567
selling to direct sellers at the time the entity enters into a tax	568
credit agreement with the tax credit authority pursuant to section	569
122.17 of the Revised Code, provided that the agreement was	570
entered into on or after January 1, 2007. Neither contingencies	571
relevant to the granting of, nor later developments with respect	572
to, the tax credit shall impair the status of the qualified direct	573
selling entity under division (B)(48) of this section after	574
execution of the tax credit agreement by the tax credit authority.	575

(c) Division (B)(48) of this section is limited to machinery,	576
equipment, and software first stored, used, or consumed in this	577
state within the period commencing June 24, 2008, and ending on	578
the date that is five years after that date.	579

(49) Sales of materials, parts, equipment, or engines used in	580
the repair or maintenance of aircraft or avionics systems of such	581
aircraft, and sales of repair, remodeling, replacement, or	582
maintenance services in this state performed on aircraft or on an	583
aircraft's avionics, engine, or component materials or parts. As	584
used in division (B)(49) of this section, "aircraft" means	585
aircraft of more than six thousand pounds maximum certified	586
takeoff weight or used exclusively in general aviation.	587

(50) Sales of full flight simulators that are used for pilot	588
or flight-crew training, sales of repair or replacement parts or	589
components, and sales of repair or maintenance services for such	590
full flight simulators. "Full flight simulator" means a replica of	591
a specific type, or make, model, and series of aircraft cockpit.	592
It includes the assemblage of equipment and computer programs	593
necessary to represent aircraft operations in ground and flight	594
conditions, a visual system providing an out-of-the-cockpit view,	595
and a system that provides cues at least equivalent to those of a	596
three-degree-of-freedom motion system, and has the full range of	597
capabilities of the systems installed in the device as described	598
in appendices A and B of part 60 of chapter 1 of title 14 of the	599
Code of Federal Regulations.	600

(51) Any transfer or lease of tangible personal property	601
between the state and JobsOhio in accordance with section 4313.02	602
of the Revised Code.	603

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

604

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

605

(i) "Qualifying corporation" means a nonprofit corporation	606
organized in this state that leases from an eligible county land,	607
buildings, structures, fixtures, and improvements to the land that	608
are part of or used in a public recreational facility used by a	609
major league professional athletic team or a class A to class AAA	610
minor league affiliate of a major league professional athletic	611
team for a significant portion of the team's home schedule,	612
provided the following apply:	613

(I) The facility is leased from the eligible county pursuant	614
to a lease that requires substantially all of the revenue from the	615
operation of the business or activity conducted by the nonprofit	616
corporation at the facility in excess of operating costs, capital	617
expenditures, and reserves to be paid to the eligible county at	618
least once per calendar year.	619

(II) Upon dissolution and liquidation of the nonprofit	620
corporation, all of its net assets are distributable to the board	621
of commissioners of the eligible county from which the corporation	622
leases the facility.	623

(ii) "Eligible county" has the same meaning as in section	624
307.695 of the Revised Code.	625

(53) Sales to or by a cable service provider, video service	626
provider, or radio or television broadcast station regulated by	627
the federal government of cable service or programming, video	628
service or programming, audio service or programming, or	629
electronically transferred digital audiovisual or audio work. As	630
used in division (B)(53) of this section, "cable service" and	631
"cable service provider" have the same meanings as in section	632
1332.01 of the Revised Code, and "video service," "video service	633
provider," and "video programming" have the same meanings as in	634
section 1332.21 of the Revised Code.	635

(C) For the purpose of the proper administration of this	636
chapter, and to prevent the evasion of the tax, it is presumed	637
that all sales made in this state are subject to the tax until the	638
contrary is established.	639

(D) The levy of this tax on retail sales of recreation and	640
sports club service shall not prevent a municipal corporation from	641
levying any tax on recreation and sports club dues or on any	642
income generated by recreation and sports club dues.	643

(E) The tax collected by the vendor from the consumer under	644
this chapter is not part of the price, but is a tax collection for	645
the benefit of the state, and of counties levying an additional	646
sales tax pursuant to section 5739.021 or 5739.026 of the Revised	647
Code and of transit authorities levying an additional sales tax	648
pursuant to section 5739.023 of the Revised Code. Except for the	649
discount authorized under section 5739.12 of the Revised Code and	650
the effects of any rounding pursuant to section 5703.055 of the	651
Revised Code, no person other than the state or such a county or	652
transit authority shall derive any benefit from the collection or	653
payment of the tax levied by this section or section 5739.021,	654
5739.023, or 5739.026 of the Revised Code.	655

Sec. 5739.20.  (A) There is hereby created in the state	656
treasury the sales and use tax relief fund, which shall consist of	657
remote seller use tax collections credited by the director of	658
budget and management pursuant to division (C)(2)(b) of section	659
5741.03 of the Revised Code.	660

(B) Not later than the thirty-first day of July of each year	661
beginning in 2015, the director shall calculate the following	662
based on the director's best estimates:	663

(1) The revenue that will be received from the taxes levied	664
under sections 5739.02 and 5741.02 of the Revised Code in the	665
twelve-month period beginning on the succeeding first day of	666
November and ending on the last day of the following October with	667
no reductions to the rates specified in division (A)(1) of section	668
5739.02 and division (A)(1) of section 5741.02 of the Revised	669
Code;	670

(2) The revenue that would be received from such taxes during	671
that period if the director subtracted one-half of one percentage	672
point from each of the rates specified in division (A)(1) of	673
section 5739.02 and division (A)(1) of section 5741.02 of the	674
Revised Code;	675

(3) The percentage obtained by multiplying the balance of the	676
sales and use tax relief fund, after all credits for the current	677
year have been made pursuant to divisions (C)(2)(a) and (b) of	678
section 5741.03 of the Revised Code, by the tax rate specified in	679
division (A)(1) of section 5739.02 of the Revised Code, then	680
dividing the product by the revenue estimate determined in	681
division (B)(1) of this section.	682

(C) Not later than the thirty-first day of July of each year	683
beginning in 2015, the director shall certify the percentage	684
calculated in division (B)(3) of this section to the tax	685
commissioner. If the percentage is not less than one-half of one	686
per cent, the commissioner shall reduce the rates of the taxes	687
levied under sections 5739.02 and 5741.02 of the Revised Code by	688
one-half of one percentage point. If the percentage is less than	689
one-half of one per cent but not less than one-quarter of one per	690
cent, the commissioner shall reduce the rates of such taxes by	691
one-quarter of one percentage point. If the percentage is less	692
than one-quarter of one per cent, the commissioner shall not	693
reduce the rate of such taxes.	694

Rate reductions under this division apply during the	695
twelve-month period beginning on the succeeding first day of	696
October and ending on the thirtieth day of the following	697
September. If the rate of tax levied under section 5739.02 of the	698
Revised Code is reduced under this division, the rate and amount	699
of tax levied under section 5739.10 of the Revised Code shall be	700
reduced to the same extent for the same period.	701

(D) The director shall transfer money in the sales and use	702
tax relief fund to the general revenue fund, the local government	703
fund, and the public library fund as necessary to offset revenue	704
reductions resulting from the reductions in taxes required under	705
division (C) of this section in the respective amounts and	706
percentages prescribed by sections 131.51, 5739.21, and 5741.03 of	707
the Revised Code. If no reductions in taxes are made under that	708
division, the director shall not transfer money from the sales and	709
use tax relief fund to the general revenue fund, the local	710
government fund, and the public library fund. Interest earned on	711
money in the sales and use tax relief fund shall be credited to	712
the sales and use tax relief fund.	713

Sec. 5741.02.  (A)(1) For the use of the general revenue fund	714
of the state, an excise tax is hereby levied on the storage, use,	715
or other consumption in this state of tangible personal property	716
or the benefit realized in this state of any service provided. The	717
tax shall be collected as provided in section 5739.025 of the	718
Revised Code. TheExcept as provided in section 5739.20 of the	719
Revised Code, the rate of the tax shall be five and three-fourths	720
per cent.	721

(2) In the case of the lease or rental, with a fixed term of	722
more than thirty days or an indefinite term with a minimum period	723
of more than thirty days, of any motor vehicles designed by the	724
manufacturer to carry a load of not more than one ton, watercraft,	725
outboard motor, or aircraft, or of any tangible personal property,	726
other than motor vehicles designed by the manufacturer to carry a	727
load of more than one ton, to be used by the lessee or renter	728
primarily for business purposes, the tax shall be collected by the	729
seller at the time the lease or rental is consummated and shall be	730
calculated by the seller on the basis of the total amount to be	731
paid by the lessee or renter under the lease or rental agreement.	732
If the total amount of the consideration for the lease or rental	733
includes amounts that are not calculated at the time the lease or	734
rental is executed, the tax shall be calculated and collected by	735
the seller at the time such amounts are billed to the lessee or	736
renter. In the case of an open-end lease or rental, the tax shall	737
be calculated by the seller on the basis of the total amount to be	738
paid during the initial fixed term of the lease or rental, and for	739
each subsequent renewal period as it comes due. As used in this	740
division, "motor vehicle" has the same meaning as in section	741
4501.01 of the Revised Code, and "watercraft" includes an outdrive	742
unit attached to the watercraft.	743

(3) Except as provided in division (A)(2) of this section, in	744
the case of a transaction, the price of which consists in whole or	745
part of the lease or rental of tangible personal property, the tax	746
shall be measured by the installments of those leases or rentals.	747

(B) Each consumer, storing, using, or otherwise consuming in	748
this state tangible personal property or realizing in this state	749
the benefit of any service provided, shall be liable for the tax,	750
and such liability shall not be extinguished until the tax has	751
been paid to this state; provided, that the consumer shall be	752
relieved from further liability for the tax if the tax has been	753
paid to a seller in accordance with section 5741.04 of the Revised	754
Code or prepaid by the seller in accordance with section 5741.06	755
of the Revised Code.	756

(C) The tax does not apply to the storage, use, or	757
consumption in this state of the following described tangible	758
personal property or services, nor to the storage, use, or	759
consumption or benefit in this state of tangible personal property	760
or services purchased under the following described circumstances:	761

(1) When the sale of property or service in this state is	762
subject to the excise tax imposed by sections 5739.01 to 5739.31	763
of the Revised Code, provided said tax has been paid;	764

(2) Except as provided in division (D) of this section,	765
tangible personal property or services, the acquisition of which,	766
if made in Ohio, would be a sale not subject to the tax imposed by	767
sections 5739.01 to 5739.31 of the Revised Code;	768

(3) Property or services, the storage, use, or other	769
consumption of or benefit from which this state is prohibited from	770
taxing by the Constitution of the United States, laws of the	771
United States, or the Constitution of this state. This exemption	772
shall not exempt from the application of the tax imposed by this	773
section the storage, use, or consumption of tangible personal	774
property that was purchased in interstate commerce, but that has	775
come to rest in this state, provided that fuel to be used or	776
transported in carrying on interstate commerce that is stopped	777
within this state pending transfer from one conveyance to another	778
is exempt from the excise tax imposed by this section and section	779
5739.02 of the Revised Code;	780

(4) Transient use of tangible personal property in this state	781
by a nonresident tourist or vacationer, or a nonbusiness use	782
within this state by a nonresident of this state, if the property	783
so used was purchased outside this state for use outside this	784
state and is not required to be registered or licensed under the	785
laws of this state;	786

(5) Tangible personal property or services rendered, upon	787
which taxes have been paid to another jurisdiction to the extent	788
of the amount of the tax paid to such other jurisdiction. Where	789
the amount of the tax imposed by this section and imposed pursuant	790
to section 5741.021, 5741.022, or 5741.023 of the Revised Code	791
exceeds the amount paid to another jurisdiction, the difference	792
shall be allocated between the tax imposed by this section and any	793
tax imposed by a county or a transit authority pursuant to section	794
5741.021, 5741.022, or 5741.023 of the Revised Code, in proportion	795
to the respective rates of such taxes.	796

As used in this subdivision, "taxes paid to another	797
jurisdiction" means the total amount of retail sales or use tax or	798
similar tax based upon the sale, purchase, or use of tangible	799
personal property or services rendered legally, levied by and paid	800
to another state or political subdivision thereof, or to the	801
District of Columbia, where the payment of such tax does not	802
entitle the taxpayer to any refund or credit for such payment.	803

(6) The transfer of a used manufactured home or used mobile	804
home, as defined by section 5739.0210 of the Revised Code, made on	805
or after January 1, 2000;	806

(7) Drugs that are or are intended to be distributed free of	807
charge to a practitioner licensed to prescribe, dispense, and	808
administer drugs to a human being in the course of a professional	809
practice and that by law may be dispensed only by or upon the	810
order of such a practitioner.;	811

(8) Computer equipment and related software leased from a	812
lessor located outside this state and initially received in this	813
state on behalf of the consumer by a third party that will retain	814
possession of such property for not more than ninety days and that	815
will, within that ninety-day period, deliver such property to the	816
consumer at a location outside this state. Division (C)(8) of this	817
section does not provide exemption from taxation for any otherwise	818
taxable charges associated with such property while it is in this	819
state or for any subsequent storage, use, or consumption of such	820
property in this state by or on behalf of the consumer.	821

(9) Tangible personal property held for sale by a person but	822
not for that person's own use and donated by that person, without	823
charge or other compensation, to either of the following:	824

(a) A nonprofit organization operated exclusively for	825
charitable purposes in this state, no part of the net income of	826
which inures to the benefit of any private shareholder or	827
individual and no substantial part of the activities of which	828
consists of carrying on propaganda or otherwise attempting to	829
influence legislation; or	830

(b) This state or any political subdivision of this state,	831
but only if donated for exclusively public purposes.	832

For the purposes of division (C)(10)(9) of this section,	833
"charitable purposes" has the same meaning as in division (B)(12)	834
of section 5739.02 of the Revised Code.	835

(D) The tax applies to the storage, use, or other consumption	836
in this state of tangible personal property or services, the	837
acquisition of which at the time of sale was excepted under	838
division (E) of section 5739.01 of the Revised Code from the tax	839
imposed by section 5739.02 of the Revised Code, but which has	840
subsequently been temporarily or permanently stored, used, or	841
otherwise consumed in a taxable manner.	842

(E)(1)(a) If any transaction is claimed to be exempt under	843
division (E) of section 5739.01 of the Revised Code or under	844
section 5739.02 of the Revised Code, with the exception of	845
divisions (B)(1) to (11) or (28) of section 5739.02 of the Revised	846
Code, the consumer shall provide to the seller, and the seller	847
shall obtain from the consumer, a certificate specifying the	848
reason that the transaction is not subject to the tax. The	849
certificate shall be in such form, and shall be provided either in	850
a hard copy form or electronic form, as the tax commissioner	851
prescribes.	852

(b) A seller that obtains a fully completed exemption	853
certificate from a consumer is relieved of liability for	854
collecting and remitting tax on any sale covered by that	855
certificate. If it is determined the exemption was improperly	856
claimed, the consumer shall be liable for any tax due on that sale	857
under this chapter. Relief under this division from liability does	858
not apply to any of the following:	859

(i) A seller that fraudulently fails to collect tax;

860

(ii) A seller that solicits consumers to participate in the	861
unlawful claim of an exemption;	862

(iii) A seller that accepts an exemption certificate from a	863
consumer that claims an exemption based on who purchases or who	864
sells property or a service, when the subject of the transaction	865
sought to be covered by the exemption certificate is actually	866
received by the consumer at a location operated by the seller in	867
this state, and this state has posted to its web site an exemption	868
certificate form that clearly and affirmatively indicates that the	869
claimed exemption is not available in this state;	870

(iv) A seller that accepts an exemption certificate from a	871
consumer who claims a multiple points of use exemption under	872
division (D) of section 5739.033 of the Revised Code, if the item	873
purchased is tangible personal property, other than prewritten	874
computer software.	875

(2) The seller shall maintain records, including exemption	876
certificates, of all sales on which a consumer has claimed an	877
exemption, and provide them to the tax commissioner on request.	878

(3) If no certificate is provided or obtained within ninety	879
days after the date on which the transaction is consummated, it	880
shall be presumed that the tax applies. Failure to have so	881
provided or obtained a certificate shall not preclude a seller,	882
within one hundred twenty days after the tax commissioner gives	883
written notice of intent to levy an assessment, from either	884
establishing that the transaction is not subject to the tax, or	885
obtaining, in good faith, a fully completed exemption certificate.	886

(4) If a transaction is claimed to be exempt under division	887
(B)(13) of section 5739.02 of the Revised Code, the contractor	888
shall obtain certification of the claimed exemption from the	889
contractee. This certification shall be in addition to an	890
exemption certificate provided by the contractor to the seller. A	891
contractee that provides a certification under this division shall	892
be deemed to be the consumer of all items purchased by the	893
contractor under the claim of exemption, if it is subsequently	894
determined that the exemption is not properly claimed. The	895
certification shall be in such form as the tax commissioner	896
prescribes.	897

(F) A seller who files a petition for reassessment contesting	898
the assessment of tax on transactions for which the seller	899
obtained no valid exemption certificates, and for which the seller	900
failed to establish that the transactions were not subject to the	901
tax during the one-hundred-twenty-day period allowed under	902
division (E) of this section, may present to the tax commissioner	903
additional evidence to prove that the transactions were exempt.	904
The seller shall file such evidence within ninety days of the	905
receipt by the seller of the notice of assessment, except that,	906
upon application and for reasonable cause, the tax commissioner	907
may extend the period for submitting such evidence thirty days.	908

(G) For the purpose of the proper administration of sections	909
5741.01 to 5741.22 of the Revised Code, and to prevent the evasion	910
of the tax hereby levied, it shall be presumed that any use,	911
storage, or other consumption of tangible personal property in	912
this state is subject to the tax until the contrary is	913
established.	914

(H) The tax collected by the seller from the consumer under	915
this chapter is not part of the price, but is a tax collection for	916
the benefit of the state, and of counties levying an additional	917
use tax pursuant to section 5741.021 or 5741.023 of the Revised	918
Code and of transit authorities levying an additional use tax	919
pursuant to section 5741.022 of the Revised Code. Except for the	920
discount authorized under section 5741.12 of the Revised Code and	921
the effects of any rounding pursuant to section 5703.055 of the	922
Revised Code, no person other than the state or such a county or	923
transit authority shall derive any benefit from the collection of	924
such tax.	925

Sec. 5741.03.  (A) One hundred per cent of all money	926
deposited into the state treasury under sections 5741.01 to	927
5741.22 of the Revised Code that is not required to be distributed	928
as provided in division (B) of this section shall be credited to	929
the general revenue fund.	930

(B) In any case where any county or transit authority has	931
levied a tax or taxes pursuant to section 5741.021, 5741.022, or	932
5741.023 of the Revised Code, the tax commissioner shall, within	933
forty-five days after the end of each month, determine and certify	934
to the director of budget and management the amount of the	935
proceeds of such tax or taxes from billings and assessments	936
received during that month, or shown on tax returns or reports	937
filed during that month, to be returned to the county or transit	938
authority levying the tax or taxes, which amounts shall be	939
determined in the manner provided in section 5739.21 of the	940
Revised Code. The director of budget and management shall	941
transfer, from the general revenue fund, to the permissive tax	942
distribution fund created by division (B)(1) of section 4301.423	943
of the Revised Code and to the local sales tax administrative fund	944
created by division (C) of section 5739.21 of the Revised Code,	945
the amounts certified by the tax commissioner. The tax	946
commissioner shall then, on or before the twentieth day of the	947
month in which such certification is made, provide for payment of	948
such respective amounts to the county treasurer or to the fiscal	949
officer of the transit authority levying the tax or taxes. The	950
amount transferred to the local sales tax administrative fund is	951
for use by the tax commissioner in defraying costs the	952
commissioner incurs in administering such taxes levied by a county	953
or transit authority.	954

(C)(1) Not later than the firstthirty-first day of January	955
and of July each calendar year beginning July 131, 2015, the tax	956
commissioner and the director of budget and management shall	957
jointly determine the remote seller use tax collections for the	958
preceding fiscal year. The amount of remote seller use tax	959
collections equals the amount of tax imposed by section 5741.02 of	960
the Revised Code and remitted under this chapter by remote sellers	961
during the six-month period ending on the preceding last day of	962
November and of May, respectively,that fiscal year reduced by any	963
the following:	964

(a) Any such tax remitted by sellers pursuant to an agreement	965
entered into under section 5740.03 of the Revised Code during the	966
six-month period and by anythat fiscal year;	967

(b) Any refunds issued during the six-month periodthat	968
fiscal year to remote sellers from the tax refund fund on account	969
of that tax;	970

(c) The amount of that tax remitted during fiscal year 2013	971
by remote sellers that voluntarily registered under section	972
5741.17 of the Revised Code.	973

(2) Not later than that firstthirty-first day of January and	974
of July of theeach calendar year beginning July 131, 2015, the	975
director of budget and management shall transfer from the general	976
revenue fund to the income tax reduction fundcredit the remote	977
seller use tax collections amount determined under division (C)(1)	978
of this section, less one-half of the amount of that tax remitted	979
during fiscal year 2013 by remote sellers that voluntarily	980
registered under section 5741.17 of the Revised Code. Amounts	981
transferred to the income tax reduction fund under this section	982
shall be included in the determination of the percentage under	983
division (B)(2) of section 131.44 of the Revised Code required to	984
be made by the thirty-first day of July of the calendar year in	985
which the commissioner makes the certifications under this	986
division.as follows:	987

(a) To the extent that the remote seller use tax collections	988
do not exceed the debt the state owes to the federal government	989
for amounts borrowed to issue unemployment benefits from the	990
state's unemployment compensation trust fund, credit the amount to	991
the federal unemployment insurance debt retirement fund, which is	992
hereby created in the state treasury. The director shall use money	993
in the fund to make payments to the United States secretary of the	994
treasury on the balance of amounts borrowed by the state from the	995
federal government to issue unemployment benefits from the state's	996
unemployment compensation trust fund. Interest earned on money in	997
the debt retirement fund shall be credited to that fund. If the	998
debt is paid in full or is no longer owed, the director shall use	999
the remainder of the remote seller use tax collections and any	1000
money remaining in the debt retirement fund as provided in	1001
divisions (C)(2)(b) and (c) of this section.	1002

(b) To the extent that the remaining remote seller use tax	1003
collections do not exceed the difference between the sales and use	1004
tax revenue estimates calculated by the director under divisions	1005
(B)(1) and (2) of section 5739.20 of the Revised Code, credit the	1006
amount to the sales and use tax relief fund created under that	1007
section. Any remaining remote seller use tax collections shall be	1008
used as provided in division (C)(2)(c) of this section.	1009

(c) To the extent that the remote seller use tax collections	1010
remaining after crediting under division (C)(2)(b) of this section	1011
do not exceed the difference between the commercial activity tax	1012
revenue estimates calculated by the director under divisions	1013
(B)(1) and (2) of section 5751.031 of the Revised Code, credit the	1014
amount to the commercial activity tax relief fund created under	1015
that section. Remaining remote seller use tax collections shall be	1016
retained in the general revenue fund.	1017

Sec. 5751.03.  (A) Except as provided in division (B) of this	1018
section and section 5751.031 of the Revised Code, the tax levied	1019
under this section for each tax period shall be the product of two	1020
and six-tenths mills per dollar times the remainder of the	1021
taxpayer's taxable gross receipts for the tax period after	1022
subtracting the exclusion amount provided for in division (C) of	1023
this section.	1024

(B) Notwithstanding division (C) of this section, the tax on	1025
the first one million dollars in taxable gross receipts each	1026
calendar year shall be calculated as follows:	1027

(1) For taxpayers with annual taxable gross receipts of one	1028
million dollars or less for the calendar year, one hundred fifty	1029
dollars;	1030

(2) For taxpayers with annual taxable gross receipts greater	1031
than one million dollars, but less than or equal to two million	1032
dollars for the calendar year, eight hundred dollars;	1033

(3) For taxpayers with annual taxable gross receipts greater	1034
than two million dollars, but less than or equal to four million	1035
dollars for the calendar year, two thousand one hundred dollars;	1036

(4) For taxpayers with annual taxable gross receipts greater	1037
than four million dollars for the calendar year, two thousand six	1038
hundred dollars.	1039

The tax imposed under division (B)(1) of this section shall	1040
be paid not later than the tenth day of May of each year along	1041
with the annual tax return. The tax imposed under divisions	1042
(B)(2), (3), and (4) of this section shall be paid not later than	1043
the tenth day of May of each year along with the first quarter tax	1044
return.	1045

(C)(1) Each taxpayer may exclude the first one million	1046
dollars of taxable gross receipts for a calendar year. Calendar	1047
quarter taxpayers shall apply the full exclusion amount to the	1048
first calendar quarter return the taxpayer files that calendar	1049
year and may carry forward and apply any unused exclusion amount	1050
to subsequent calendar quarters within that same calendar year.	1051

(2) A taxpayer switching from a calendar year tax period to a	1052
calendar quarter tax period may, for the first quarter of the	1053
change, apply the full one-million-dollar exclusion amount to the	1054
first calendar quarter return the taxpayer files that calendar	1055
year. Such taxpayers may carry forward and apply any unused	1056
exclusion amount to subsequent calendar quarters within that same	1057
calendar year. The tax rate shall be based on the rate imposed	1058
that calendar quarter when the taxpayer switches from a calendar	1059
year to a calendar quarter tax period.	1060

(3) A taxpayer shall not exclude more than one million	1061
dollars pursuant to division (C) of this section in a calendar	1062
year.	1063

Sec. 5751.031.  (A) There is hereby created in the state	1064
treasury the commercial activity tax relief fund, which shall	1065
consist of remote seller use tax collections credited by the	1066
director of budget and management pursuant to division (C)(2)(c)	1067
of section 5741.03 of the Revised Code.	1068

(B) Not later than the thirty-first day of July of each year	1069
beginning in 2015, the director shall calculate the following	1070
based on the director's best estimates:	1071

(1) The revenue that will be received from the tax levied	1072
under Chapter 5751. of the Revised Code in the twelve-month period	1073
beginning on the succeeding first day of December and ending on	1074
the last day of the following November with no reduction to the	1075
rate specified in division (A) of section 5751.03 of the Revised	1076
Code;	1077

(2) The revenue that would be received from that tax during	1078
that period if the rate of the tax were to be two mills per dollar	1079
instead of the rate specified in division (A) of section 5751.03	1080
of the Revised Code;	1081

(3) The percentage obtained by multiplying the balance of the	1082
commercial activity tax relief fund, after all credits for the	1083
current year have been made pursuant to divisions (C)(2)(a), (b),	1084
and (c) of section 5741.03 of the Revised Code, by twenty-six	1085
hundredths of one per cent, then dividing the product by the	1086
revenue estimate determined in division (B)(1) of this section.	1087

(C) Not later than the thirty-first day of July of each year	1088
beginning in 2015, the director shall certify the percentage	1089
calculated in division (B)(3) of this section to the tax	1090
commissioner. If the percentage is not less than six thousandths	1091
of one per cent, the commissioner shall reduce the rate specified	1092
in division (A) of section 5751.03 of the Revised Code by	1093
six-tenths of one mill per dollar. If the percentage is less than	1094
six thousandths of one per cent but not less than three	1095
thousandths of one per cent, the commissioner shall reduce the tax	1096
rate by three-tenths of one mill per dollar. If the percentage is	1097
less than one-one thousandth of one per cent, the commissioner	1098
shall not reduce the tax rate.	1099

Rate reductions under this division apply to tax periods	1100
beginning on the succeeding first day of October and ending on the	1101
thirtieth day of the following September.	1102

(D) The director shall transfer money in the commercial	1103
activity tax relief fund to the general revenue fund, the local	1104
government fund, the public library fund, the revenue enhancement	1105
fund, the commercial activity tax motor fuel receipts fund, the	1106
school district tangible property tax replacement fund, and the	1107
local government property tax replacement fund as necessary to	1108
offset revenue reductions resulting from the reductions in taxes	1109
required under division (C) of this section in the respective	1110
amounts and percentages prescribed by sections 131.51 and 5751.20	1111
of the Revised Code. If no reductions in taxes are made under that	1112
division, the director shall not transfer money from the	1113
commercial activity relief fund. Interest earned on money in the	1114
commercial activity tax relief fund shall be credited to the	1115
commercial activity tax relief fund.	1116

Section 2. That existing sections 5739.02, 5741.02, 5741.03,	1117
and 5751.03 of the Revised Code are hereby repealed.	1118