Bill Text: OH SB263 | 2011-2012 | 129th General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: To remove the requirement that certain telecommunications equipment used in direct marketing must be purchased by a direct marketing vendor in order for the equipment to be exempt from the sales tax.

Spectrum: Partisan Bill (Republican 16-0)

Status: (Engrossed - Dead) 2012-02-15 - Passed 3rd Consideration House [SB263 Detail]

Download: Ohio-2011-SB263-Introduced.html

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As Introduced

129th General Assembly Regular Session 2011-2012

S. B. No. 263

Senator Coley 

Cosponsor: Senator Bacon 

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A BILL

To amend section 5739.02 of the Revised Code to

1

remove the requirement that certain

2

telecommunications equipment used in direct

3

marketing must be purchased by a direct marketing

4

vendor in order for the equipment to be exempt

5

from the sales tax.

6

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

Section 1. That section 5739.02 of the Revised Code be	7
amended to read as follows:	8

Sec. 5739.02.  For the purpose of providing revenue with	9
which to meet the needs of the state, for the use of the general	10
revenue fund of the state, for the purpose of securing a thorough	11
and efficient system of common schools throughout the state, for	12
the purpose of affording revenues, in addition to those from	13
general property taxes, permitted under constitutional	14
limitations, and from other sources, for the support of local	15
governmental functions, and for the purpose of reimbursing the	16
state for the expense of administering this chapter, an excise tax	17
is hereby levied on each retail sale made in this state.	18

(A)(1) The tax shall be collected as provided in section	19
5739.025 of the Revised Code. The rate of the tax shall be five	20
and one-half per cent. The tax applies and is collectible when the	21
sale is made, regardless of the time when the price is paid or	22
delivered.	23

(2) In the case of the lease or rental, with a fixed term of	24
more than thirty days or an indefinite term with a minimum period	25
of more than thirty days, of any motor vehicles designed by the	26
manufacturer to carry a load of not more than one ton, watercraft,	27
outboard motor, or aircraft, or of any tangible personal property,	28
other than motor vehicles designed by the manufacturer to carry a	29
load of more than one ton, to be used by the lessee or renter	30
primarily for business purposes, the tax shall be collected by the	31
vendor at the time the lease or rental is consummated and shall be	32
calculated by the vendor on the basis of the total amount to be	33
paid by the lessee or renter under the lease agreement. If the	34
total amount of the consideration for the lease or rental includes	35
amounts that are not calculated at the time the lease or rental is	36
executed, the tax shall be calculated and collected by the vendor	37
at the time such amounts are billed to the lessee or renter. In	38
the case of an open-end lease or rental, the tax shall be	39
calculated by the vendor on the basis of the total amount to be	40
paid during the initial fixed term of the lease or rental, and for	41
each subsequent renewal period as it comes due. As used in this	42
division, "motor vehicle" has the same meaning as in section	43
4501.01 of the Revised Code, and "watercraft" includes an outdrive	44
unit attached to the watercraft.	45

A lease with a renewal clause and a termination penalty or	46
similar provision that applies if the renewal clause is not	47
exercised is presumed to be a sham transaction. In such a case,	48
the tax shall be calculated and paid on the basis of the entire	49
length of the lease period, including any renewal periods, until	50
the termination penalty or similar provision no longer applies.	51
The taxpayer shall bear the burden, by a preponderance of the	52
evidence, that the transaction or series of transactions is not a	53
sham transaction.	54

(3) Except as provided in division (A)(2) of this section, in	55
the case of a sale, the price of which consists in whole or in	56
part of the lease or rental of tangible personal property, the tax	57
shall be measured by the installments of that lease or rental.	58

(4) In the case of a sale of a physical fitness facility	59
service or recreation and sports club service, the price of which	60
consists in whole or in part of a membership for the receipt of	61
the benefit of the service, the tax applicable to the sale shall	62
be measured by the installments thereof.	63

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

64

(1) Sales to the state or any of its political subdivisions,	65
or to any other state or its political subdivisions if the laws of	66
that state exempt from taxation sales made to this state and its	67
political subdivisions;	68

(2) Sales of food for human consumption off the premises	69
where sold;	70

(3) Sales of food sold to students only in a cafeteria,	71
dormitory, fraternity, or sorority maintained in a private,	72
public, or parochial school, college, or university;	73

(4) Sales of newspapers and of magazine subscriptions and	74
sales or transfers of magazines distributed as controlled	75
circulation publications;	76

(5) The furnishing, preparing, or serving of meals without	77
charge by an employer to an employee provided the employer records	78
the meals as part compensation for services performed or work	79
done;	80

(6) Sales of motor fuel upon receipt, use, distribution, or	81
sale of which in this state a tax is imposed by the law of this	82
state, but this exemption shall not apply to the sale of motor	83
fuel on which a refund of the tax is allowable under division (A)	84
of section 5735.14 of the Revised Code; and the tax commissioner	85
may deduct the amount of tax levied by this section applicable to	86
the price of motor fuel when granting a refund of motor fuel tax	87
pursuant to division (A) of section 5735.14 of the Revised Code	88
and shall cause the amount deducted to be paid into the general	89
revenue fund of this state;	90

(7) Sales of natural gas by a natural gas company, of water	91
by a water-works company, or of steam by a heating company, if in	92
each case the thing sold is delivered to consumers through pipes	93
or conduits, and all sales of communications services by a	94
telegraph company, all terms as defined in section 5727.01 of the	95
Revised Code, and sales of electricity delivered through wires;	96

(8) Casual sales by a person, or auctioneer employed directly	97
by the person to conduct such sales, except as to such sales of	98
motor vehicles, watercraft or outboard motors required to be	99
titled under section 1548.06 of the Revised Code, watercraft	100
documented with the United States coast guard, snowmobiles, and	101
all-purpose vehicles as defined in section 4519.01 of the Revised	102
Code;	103

(9)(a) Sales of services or tangible personal property, other	104
than motor vehicles, mobile homes, and manufactured homes, by	105
churches, organizations exempt from taxation under section	106
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit	107
organizations operated exclusively for charitable purposes as	108
defined in division (B)(12) of this section, provided that the	109
number of days on which such tangible personal property or	110
services, other than items never subject to the tax, are sold does	111
not exceed six in any calendar year, except as otherwise provided	112
in division (B)(9)(b) of this section. If the number of days on	113
which such sales are made exceeds six in any calendar year, the	114
church or organization shall be considered to be engaged in	115
business and all subsequent sales by it shall be subject to the	116
tax. In counting the number of days, all sales by groups within a	117
church or within an organization shall be considered to be sales	118
of that church or organization.	119

(b) The limitation on the number of days on which tax-exempt	120
sales may be made by a church or organization under division	121
(B)(9)(a) of this section does not apply to sales made by student	122
clubs and other groups of students of a primary or secondary	123
school, or a parent-teacher association, booster group, or similar	124
organization that raises money to support or fund curricular or	125
extracurricular activities of a primary or secondary school.	126

(c) Divisions (B)(9)(a) and (b) of this section do not apply	127
to sales by a noncommercial educational radio or television	128
broadcasting station.	129

(10) Sales not within the taxing power of this state under	130
the Constitution of the United States;	131

(11) Except for transactions that are sales under division	132
(B)(3)(r) of section 5739.01 of the Revised Code, the	133
transportation of persons or property, unless the transportation	134
is by a private investigation and security service;	135

(12) Sales of tangible personal property or services to	136
churches, to organizations exempt from taxation under section	137
501(c)(3) of the Internal Revenue Code of 1986, and to any other	138
nonprofit organizations operated exclusively for charitable	139
purposes in this state, no part of the net income of which inures	140
to the benefit of any private shareholder or individual, and no	141
substantial part of the activities of which consists of carrying	142
on propaganda or otherwise attempting to influence legislation;	143
sales to offices administering one or more homes for the aged or	144
one or more hospital facilities exempt under section 140.08 of the	145
Revised Code; and sales to organizations described in division (D)	146
of section 5709.12 of the Revised Code.	147

"Charitable purposes" means the relief of poverty; the	148
improvement of health through the alleviation of illness, disease,	149
or injury; the operation of an organization exclusively for the	150
provision of professional, laundry, printing, and purchasing	151
services to hospitals or charitable institutions; the operation of	152
a home for the aged, as defined in section 5701.13 of the Revised	153
Code; the operation of a radio or television broadcasting station	154
that is licensed by the federal communications commission as a	155
noncommercial educational radio or television station; the	156
operation of a nonprofit animal adoption service or a county	157
humane society; the promotion of education by an institution of	158
learning that maintains a faculty of qualified instructors,	159
teaches regular continuous courses of study, and confers a	160
recognized diploma upon completion of a specific curriculum; the	161
operation of a parent-teacher association, booster group, or	162
similar organization primarily engaged in the promotion and	163
support of the curricular or extracurricular activities of a	164
primary or secondary school; the operation of a community or area	165
center in which presentations in music, dramatics, the arts, and	166
related fields are made in order to foster public interest and	167
education therein; the production of performances in music,	168
dramatics, and the arts; or the promotion of education by an	169
organization engaged in carrying on research in, or the	170
dissemination of, scientific and technological knowledge and	171
information primarily for the public.	172

Nothing in this division shall be deemed to exempt sales to	173
any organization for use in the operation or carrying on of a	174
trade or business, or sales to a home for the aged for use in the	175
operation of independent living facilities as defined in division	176
(A) of section 5709.12 of the Revised Code.	177

(13) Building and construction materials and services sold to	178
construction contractors for incorporation into a structure or	179
improvement to real property under a construction contract with	180
this state or a political subdivision of this state, or with the	181
United States government or any of its agencies; building and	182
construction materials and services sold to construction	183
contractors for incorporation into a structure or improvement to	184
real property that are accepted for ownership by this state or any	185
of its political subdivisions, or by the United States government	186
or any of its agencies at the time of completion of the structures	187
or improvements; building and construction materials sold to	188
construction contractors for incorporation into a horticulture	189
structure or livestock structure for a person engaged in the	190
business of horticulture or producing livestock; building	191
materials and services sold to a construction contractor for	192
incorporation into a house of public worship or religious	193
education, or a building used exclusively for charitable purposes	194
under a construction contract with an organization whose purpose	195
is as described in division (B)(12) of this section; building	196
materials and services sold to a construction contractor for	197
incorporation into a building under a construction contract with	198
an organization exempt from taxation under section 501(c)(3) of	199
the Internal Revenue Code of 1986 when the building is to be used	200
exclusively for the organization's exempt purposes; building and	201
construction materials sold for incorporation into the original	202
construction of a sports facility under section 307.696 of the	203
Revised Code; building and construction materials and services	204
sold to a construction contractor for incorporation into real	205
property outside this state if such materials and services, when	206
sold to a construction contractor in the state in which the real	207
property is located for incorporation into real property in that	208
state, would be exempt from a tax on sales levied by that state;	209
and, until one calendar year after the construction of a	210
convention center that qualifies for property tax exemption under	211
section 5709.084 of the Revised Code is completed, building and	212
construction materials and services sold to a construction	213
contractor for incorporation into the real property comprising	214
that convention center;	215

(14) Sales of ships or vessels or rail rolling stock used or	216
to be used principally in interstate or foreign commerce, and	217
repairs, alterations, fuel, and lubricants for such ships or	218
vessels or rail rolling stock;	219

(15) Sales to persons primarily engaged in any of the	220
activities mentioned in division (B)(42)(a), (g), or (h) of this	221
section, to persons engaged in making retail sales, or to persons	222
who purchase for sale from a manufacturer tangible personal	223
property that was produced by the manufacturer in accordance with	224
specific designs provided by the purchaser, of packages, including	225
material, labels, and parts for packages, and of machinery,	226
equipment, and material for use primarily in packaging tangible	227
personal property produced for sale, including any machinery,	228
equipment, and supplies used to make labels or packages, to	229
prepare packages or products for labeling, or to label packages or	230
products, by or on the order of the person doing the packaging, or	231
sold at retail. "Packages" includes bags, baskets, cartons,	232
crates, boxes, cans, bottles, bindings, wrappings, and other	233
similar devices and containers, but does not include motor	234
vehicles or bulk tanks, trailers, or similar devices attached to	235
motor vehicles. "Packaging" means placing in a package. Division	236
(B)(15) of this section does not apply to persons engaged in	237
highway transportation for hire.	238

(16) Sales of food to persons using supplemental nutrition	239
assistance program benefits to purchase the food. As used in this	240
division, "food" has the same meaning as in 7 U.S.C. 2012 and	241
federal regulations adopted pursuant to the Food and Nutrition Act	242
of 2008.	243

(17) Sales to persons engaged in farming, agriculture,	244
horticulture, or floriculture, of tangible personal property for	245
use or consumption primarily in the production by farming,	246
agriculture, horticulture, or floriculture of other tangible	247
personal property for use or consumption primarily in the	248
production of tangible personal property for sale by farming,	249
agriculture, horticulture, or floriculture; or material and parts	250
for incorporation into any such tangible personal property for use	251
or consumption in production; and of tangible personal property	252
for such use or consumption in the conditioning or holding of	253
products produced by and for such use, consumption, or sale by	254
persons engaged in farming, agriculture, horticulture, or	255
floriculture, except where such property is incorporated into real	256
property;	257

(18) Sales of drugs for a human being that may be dispensed	258
only pursuant to a prescription; insulin as recognized in the	259
official United States pharmacopoeia; urine and blood testing	260
materials when used by diabetics or persons with hypoglycemia to	261
test for glucose or acetone; hypodermic syringes and needles when	262
used by diabetics for insulin injections; epoetin alfa when	263
purchased for use in the treatment of persons with medical	264
disease; hospital beds when purchased by hospitals, nursing homes,	265
or other medical facilities; and medical oxygen and medical	266
oxygen-dispensing equipment when purchased by hospitals, nursing	267
homes, or other medical facilities;	268

(19) Sales of prosthetic devices, durable medical equipment	269
for home use, or mobility enhancing equipment, when made pursuant	270
to a prescription and when such devices or equipment are for use	271
by a human being.	272

(20) Sales of emergency and fire protection vehicles and	273
equipment to nonprofit organizations for use solely in providing	274
fire protection and emergency services, including trauma care and	275
emergency medical services, for political subdivisions of the	276
state;	277

(21) Sales of tangible personal property manufactured in this	278
state, if sold by the manufacturer in this state to a retailer for	279
use in the retail business of the retailer outside of this state	280
and if possession is taken from the manufacturer by the purchaser	281
within this state for the sole purpose of immediately removing the	282
same from this state in a vehicle owned by the purchaser;	283

(22) Sales of services provided by the state or any of its	284
political subdivisions, agencies, instrumentalities, institutions,	285
or authorities, or by governmental entities of the state or any of	286
its political subdivisions, agencies, instrumentalities,	287
institutions, or authorities;	288

(23) Sales of motor vehicles to nonresidents of this state	289
under the circumstances described in division (B) of section	290
5739.029 of the Revised Code;	291

(24) Sales to persons engaged in the preparation of eggs for	292
sale of tangible personal property used or consumed directly in	293
such preparation, including such tangible personal property used	294
for cleaning, sanitizing, preserving, grading, sorting, and	295
classifying by size; packages, including material and parts for	296
packages, and machinery, equipment, and material for use in	297
packaging eggs for sale; and handling and transportation equipment	298
and parts therefor, except motor vehicles licensed to operate on	299
public highways, used in intraplant or interplant transfers or	300
shipment of eggs in the process of preparation for sale, when the	301
plant or plants within or between which such transfers or	302
shipments occur are operated by the same person. "Packages"	303
includes containers, cases, baskets, flats, fillers, filler flats,	304
cartons, closure materials, labels, and labeling materials, and	305
"packaging" means placing therein.	306

(25)(a) Sales of water to a consumer for residential use,	307
except the sale of bottled water, distilled water, mineral water,	308
carbonated water, or ice;	309

(b) Sales of water by a nonprofit corporation engaged	310
exclusively in the treatment, distribution, and sale of water to	311
consumers, if such water is delivered to consumers through pipes	312
or tubing.	313

(26) Fees charged for inspection or reinspection of motor	314
vehicles under section 3704.14 of the Revised Code;	315

(27) Sales to persons licensed to conduct a food service	316
operation pursuant to section 3717.43 of the Revised Code, of	317
tangible personal property primarily used directly for the	318
following:	319

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

320

(b) To preserve food that has been or will be prepared for	321
human consumption for sale by the food service operator, not	322
including tangible personal property used to display food for	323
selection by the consumer;	324

(c) To clean tangible personal property used to prepare or	325
serve food for human consumption for sale.	326

(28) Sales of animals by nonprofit animal adoption services	327
or county humane societies;	328

(29) Sales of services to a corporation described in division	329
(A) of section 5709.72 of the Revised Code, and sales of tangible	330
personal property that qualifies for exemption from taxation under	331
section 5709.72 of the Revised Code;	332

(30) Sales and installation of agricultural land tile, as	333
defined in division (B)(5)(a) of section 5739.01 of the Revised	334
Code;	335

(31) Sales and erection or installation of portable grain	336
bins, as defined in division (B)(5)(b) of section 5739.01 of the	337
Revised Code;	338

(32) The sale, lease, repair, and maintenance of, parts for,	339
or items attached to or incorporated in, motor vehicles that are	340
primarily used for transporting tangible personal property	341
belonging to others by a person engaged in highway transportation	342
for hire, except for packages and packaging used for the	343
transportation of tangible personal property;	344

(33) Sales to the state headquarters of any veterans'	345
organization in this state that is either incorporated and issued	346
a charter by the congress of the United States or is recognized by	347
the United States veterans administration, for use by the	348
headquarters;	349

(34) Sales to a telecommunications service vendor, mobile	350
telecommunications service vendor, or satellite broadcasting	351
service vendor of tangible personal property and services used	352
directly and primarily in transmitting, receiving, switching, or	353
recording any interactive, one- or two-way electromagnetic	354
communications, including voice, image, data, and information,	355
through the use of any medium, including, but not limited to,	356
poles, wires, cables, switching equipment, computers, and record	357
storage devices and media, and component parts for the tangible	358
personal property. The exemption provided in this division shall	359
be in lieu of all other exemptions under division (B)(42)(a) or	360
(n) of this section to which the vendor may otherwise be entitled,	361
based upon the use of the thing purchased in providing the	362
telecommunications, mobile telecommunications, or satellite	363
broadcasting service.	364

(35)(a) Sales where the purpose of the consumer is to use or	365
consume the things transferred in making retail sales and	366
consisting of newspaper inserts, catalogues, coupons, flyers, gift	367
certificates, or other advertising material that prices and	368
describes tangible personal property offered for retail sale.;	369

(b) Sales to direct marketing vendors of preliminary	370
materials such as photographs, artwork, and typesetting that will	371
be used in printing advertising material; and of printed matter	372
that offers free merchandise or chances to win sweepstake prizes	373
and that is mailed to potential customers with advertising	374
material described in division (B)(35)(a) of this section; and	375

(c) Sales of equipment such as telephones, computers,	376
facsimile machines, and similar tangible personal property	377
primarily used to accept orders for direct marketing retail	378
sales.;	379

(c)(d) Sales of automatic food vending machines that preserve	380
food with a shelf life of forty-five days or less by refrigeration	381
and dispense it to the consumer.	382

For purposes of division (B)(35) of this section, "direct	383
marketing" means the method of selling where consumers order	384
tangible personal property by United States mail, delivery	385
service, or telecommunication and the vendor delivers or ships the	386
tangible personal property sold to the consumer from a warehouse,	387
catalogue distribution center, or similar fulfillment facility by	388
means of the United States mail, delivery service, or common	389
carrier.	390

(36) Sales to a person engaged in the business of	391
horticulture or producing livestock of materials to be	392
incorporated into a horticulture structure or livestock structure;	393

(37) Sales of personal computers, computer monitors, computer	394
keyboards, modems, and other peripheral computer equipment to an	395
individual who is licensed or certified to teach in an elementary	396
or a secondary school in this state for use by that individual in	397
preparation for teaching elementary or secondary school students;	398

(38) Sales to a professional racing team of any of the	399
following:	400

(a) Motor racing vehicles;

401

(b) Repair services for motor racing vehicles;

402

(c) Items of property that are attached to or incorporated in	403
motor racing vehicles, including engines, chassis, and all other	404
components of the vehicles, and all spare, replacement, and	405
rebuilt parts or components of the vehicles; except not including	406
tires, consumable fluids, paint, and accessories consisting of	407
instrumentation sensors and related items added to the vehicle to	408
collect and transmit data by means of telemetry and other forms of	409
communication.	410

(39) Sales of used manufactured homes and used mobile homes,	411
as defined in section 5739.0210 of the Revised Code, made on or	412
after January 1, 2000;	413

(40) Sales of tangible personal property and services to a	414
provider of electricity used or consumed directly and primarily in	415
generating, transmitting, or distributing electricity for use by	416
others, including property that is or is to be incorporated into	417
and will become a part of the consumer's production, transmission,	418
or distribution system and that retains its classification as	419
tangible personal property after incorporation; fuel or power used	420
in the production, transmission, or distribution of electricity;	421
energy conversion equipment as defined in section 5727.01 of the	422
Revised Code; and tangible personal property and services used in	423
the repair and maintenance of the production, transmission, or	424
distribution system, including only those motor vehicles as are	425
specially designed and equipped for such use. The exemption	426
provided in this division shall be in lieu of all other exemptions	427
in division (B)(42)(a) or (n) of this section to which a provider	428
of electricity may otherwise be entitled based on the use of the	429
tangible personal property or service purchased in generating,	430
transmitting, or distributing electricity.	431

(41) Sales to a person providing services under division	432
(B)(3)(r) of section 5739.01 of the Revised Code of tangible	433
personal property and services used directly and primarily in	434
providing taxable services under that section.	435

(42) Sales where the purpose of the purchaser is to do any of	436
the following:	437

(a) To incorporate the thing transferred as a material or a	438
part into tangible personal property to be produced for sale by	439
manufacturing, assembling, processing, or refining; or to use or	440
consume the thing transferred directly in producing tangible	441
personal property for sale by mining, including, without	442
limitation, the extraction from the earth of all substances that	443
are classed geologically as minerals, production of crude oil and	444
natural gas, or directly in the rendition of a public utility	445
service, except that the sales tax levied by this section shall be	446
collected upon all meals, drinks, and food for human consumption	447
sold when transporting persons. Persons engaged in rendering	448
services in the exploration for, and production of, crude oil and	449
natural gas for others are deemed engaged directly in the	450
exploration for, and production of, crude oil and natural gas.	451
This paragraph does not exempt from "retail sale" or "sales at	452
retail" the sale of tangible personal property that is to be	453
incorporated into a structure or improvement to real property.	454

(b) To hold the thing transferred as security for the	455
performance of an obligation of the vendor;	456

(c) To resell, hold, use, or consume the thing transferred as	457
evidence of a contract of insurance;	458

(d) To use or consume the thing directly in commercial	459
fishing;	460

(e) To incorporate the thing transferred as a material or a	461
part into, or to use or consume the thing transferred directly in	462
the production of, magazines distributed as controlled circulation	463
publications;	464

(f) To use or consume the thing transferred in the production	465
and preparation in suitable condition for market and sale of	466
printed, imprinted, overprinted, lithographic, multilithic,	467
blueprinted, photostatic, or other productions or reproductions of	468
written or graphic matter;	469

(g) To use the thing transferred, as described in section	470
5739.011 of the Revised Code, primarily in a manufacturing	471
operation to produce tangible personal property for sale;	472

(h) To use the benefit of a warranty, maintenance or service	473
contract, or similar agreement, as described in division (B)(7) of	474
section 5739.01 of the Revised Code, to repair or maintain	475
tangible personal property, if all of the property that is the	476
subject of the warranty, contract, or agreement would not be	477
subject to the tax imposed by this section;	478

(i) To use the thing transferred as qualified research and	479
development equipment;	480

(j) To use or consume the thing transferred primarily in	481
storing, transporting, mailing, or otherwise handling purchased	482
sales inventory in a warehouse, distribution center, or similar	483
facility when the inventory is primarily distributed outside this	484
state to retail stores of the person who owns or controls the	485
warehouse, distribution center, or similar facility, to retail	486
stores of an affiliated group of which that person is a member, or	487
by means of direct marketing. This division does not apply to	488
motor vehicles registered for operation on the public highways. As	489
used in this division, "affiliated group" has the same meaning as	490
in division (B)(3)(e) of section 5739.01 of the Revised Code and	491
"direct marketing" has the same meaning as in division (B)(35) of	492
this section.	493

(k) To use or consume the thing transferred to fulfill a	494
contractual obligation incurred by a warrantor pursuant to a	495
warranty provided as a part of the price of the tangible personal	496
property sold or by a vendor of a warranty, maintenance or service	497
contract, or similar agreement the provision of which is defined	498
as a sale under division (B)(7) of section 5739.01 of the Revised	499
Code;	500

(l) To use or consume the thing transferred in the production	501
of a newspaper for distribution to the public;	502

(m) To use tangible personal property to perform a service	503
listed in division (B)(3) of section 5739.01 of the Revised Code,	504
if the property is or is to be permanently transferred to the	505
consumer of the service as an integral part of the performance of	506
the service;	507

(n) To use or consume the thing transferred primarily in	508
producing tangible personal property for sale by farming,	509
agriculture, horticulture, or floriculture. Persons engaged in	510
rendering farming, agriculture, horticulture, or floriculture	511
services for others are deemed engaged primarily in farming,	512
agriculture, horticulture, or floriculture. This paragraph does	513
not exempt from "retail sale" or "sales at retail" the sale of	514
tangible personal property that is to be incorporated into a	515
structure or improvement to real property.	516

(o) To use or consume the thing transferred in acquiring,	517
formatting, editing, storing, and disseminating data or	518
information by electronic publishing.	519

As used in division (B)(42) of this section, "thing" includes	520
all transactions included in divisions (B)(3)(a), (b), and (e) of	521
section 5739.01 of the Revised Code.	522

(43) Sales conducted through a coin operated device that	523
activates vacuum equipment or equipment that dispenses water,	524
whether or not in combination with soap or other cleaning agents	525
or wax, to the consumer for the consumer's use on the premises in	526
washing, cleaning, or waxing a motor vehicle, provided no other	527
personal property or personal service is provided as part of the	528
transaction.	529

(44) Sales of replacement and modification parts for engines,	530
airframes, instruments, and interiors in, and paint for, aircraft	531
used primarily in a fractional aircraft ownership program, and	532
sales of services for the repair, modification, and maintenance of	533
such aircraft, and machinery, equipment, and supplies primarily	534
used to provide those services.	535

(45) Sales of telecommunications service that is used	536
directly and primarily to perform the functions of a call center.	537
As used in this division, "call center" means any physical	538
location where telephone calls are placed or received in high	539
volume for the purpose of making sales, marketing, customer	540
service, technical support, or other specialized business	541
activity, and that employs at least fifty individuals that engage	542
in call center activities on a full-time basis, or sufficient	543
individuals to fill fifty full-time equivalent positions.	544

(46) Sales by a telecommunications service vendor of 900	545
service to a subscriber. This division does not apply to	546
information services, as defined in division (FF) of section	547
5739.01 of the Revised Code.	548

(47) Sales of value-added non-voice data service. This	549
division does not apply to any similar service that is not	550
otherwise a telecommunications service.	551

(48)(a) Sales of machinery, equipment, and software to a	552
qualified direct selling entity for use in a warehouse or	553
distribution center primarily for storing, transporting, or	554
otherwise handling inventory that is held for sale to independent	555
salespersons who operate as direct sellers and that is held	556
primarily for distribution outside this state;	557

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

558

(i) "Direct seller" means a person selling consumer products	559
to individuals for personal or household use and not from a fixed	560
retail location, including selling such product at in-home product	561
demonstrations, parties, and other one-on-one selling.	562

(ii) "Qualified direct selling entity" means an entity	563
selling to direct sellers at the time the entity enters into a tax	564
credit agreement with the tax credit authority pursuant to section	565
122.17 of the Revised Code, provided that the agreement was	566
entered into on or after January 1, 2007. Neither contingencies	567
relevant to the granting of, nor later developments with respect	568
to, the tax credit shall impair the status of the qualified direct	569
selling entity under division (B)(48) of this section after	570
execution of the tax credit agreement by the tax credit authority.	571

(c) Division (B)(48) of this section is limited to machinery,	572
equipment, and software first stored, used, or consumed in this	573
state within the period commencing June 24, 2008, and ending on	574
the date that is five years after that date.	575

(49) Sales of materials, parts, equipment, or engines used in	576
the repair or maintenance of aircraft or avionics systems of such	577
aircraft, and sales of repair, remodeling, replacement, or	578
maintenance services in this state performed on aircraft or on an	579
aircraft's avionics, engine, or component materials or parts. As	580
used in division (B)(49) of this section, "aircraft" means	581
aircraft of more than six thousand pounds maximum certified	582
takeoff weight or used exclusively in general aviation.	583

(50) Sales of full flight simulators that are used for pilot	584
or flight-crew training, sales of repair or replacement parts or	585
components, and sales of repair or maintenance services for such	586
full flight simulators. "Full flight simulator" means a replica of	587
a specific type, or make, model, and series of aircraft cockpit.	588
It includes the assemblage of equipment and computer programs	589
necessary to represent aircraft operations in ground and flight	590
conditions, a visual system providing an out-of-the-cockpit view,	591
and a system that provides cues at least equivalent to those of a	592
three-degree-of-freedom motion system, and has the full range of	593
capabilities of the systems installed in the device as described	594
in appendices A and B of part 60 of chapter 1 of title 14 of the	595
Code of Federal Regulations.	596

(51) Any transfer or lease of tangible personal property	597
between the state and a successful proposer in accordance with	598
sections 126.60 to 126.605 of the Revised Code, provided the	599
property is part of a project as defined in section 126.60 of the	600
Revised Code and the state retains ownership of the project or	601
part thereof that is being transferred or leased, between the	602
state and JobsOhio in accordance with section 4313.02 of the	603
Revised Code.	604

(C) For the purpose of the proper administration of this	605
chapter, and to prevent the evasion of the tax, it is presumed	606
that all sales made in this state are subject to the tax until the	607
contrary is established.	608

(D) The levy of this tax on retail sales of recreation and	609
sports club service shall not prevent a municipal corporation from	610
levying any tax on recreation and sports club dues or on any	611
income generated by recreation and sports club dues.	612

(E) The tax collected by the vendor from the consumer under	613
this chapter is not part of the price, but is a tax collection for	614
the benefit of the state, and of counties levying an additional	615
sales tax pursuant to section 5739.021 or 5739.026 of the Revised	616
Code and of transit authorities levying an additional sales tax	617
pursuant to section 5739.023 of the Revised Code. Except for the	618
discount authorized under section 5739.12 of the Revised Code and	619
the effects of any rounding pursuant to section 5703.055 of the	620
Revised Code, no person other than the state or such a county or	621
transit authority shall derive any benefit from the collection or	622
payment of the tax levied by this section or section 5739.021,	623
5739.023, or 5739.026 of the Revised Code.	624

Section 2.  That existing section 5739.02 of the Revised Code	625
is hereby repealed.	626

Section 3.  The General Assembly hereby declares that the	627
intent of the amendment by this act of section 5739.02 of the	628
Revised Code is to clarify the law as it existed prior to the	629
amendment by this act of that section.	630