SB 59

As Introduced
136th General Assembly
   Regular Session  S. B. No. 59
       2025-2026
  Senators Cutrona, Schaffer
  Cosponsors: Senators Koehler, Johnson, Wilkin
  A BILL
  To amend sections 107.036, 5739.02, 5747.98, and  1
  5751.98 and to enact sections 122.1712,  2
  5747.053, and 5751.56 of the Revised Code to  3
  exempt from the sales and use tax the sale of  4
  certain firearms and ammunition and to authorize  5
  refundable tax credits for small arms and  6
  ammunition manufacturing projects.  7
 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
     Section 1. That sections 107.036, 5739.02, 5747.98, and  8
5751.98 be amended and sections 122.1712, 5747.053, and 5751.56  9
of the Revised Code be enacted to read as follows:  10
     Sec. 107.036. (A) For each business incentive tax credit,  11
the main operating appropriations act shall contain a detailed  12
estimate of the total amount of credits that may be authorized  13
in each year, an estimate of the amount of credits expected to  14
be claimed in each year, and an estimate of the amount of  15
credits expected to remain outstanding at the end of the  16
biennium. The governor shall include such estimates in the state  17
budget submitted to the general assembly pursuant to section  18
S. B. No. 59  Page 2
As Introduced
107.03 of the Revised Code.  19
       (B) As used in this section, "business incentive tax  20
credit" means all of the following:  21
       (1) The job creation tax credit under section 122.17 of  22
the Revised Code;  23
       (2) The job retention tax credit under section 122.171 of  24
the Revised Code;  25
       (3) The historic preservation tax credit under section  26
149.311 of the Revised Code;  27
       (4) The motion picture and broadway theatrical production  28
tax credit under section 122.85 of the Revised Code;  29
       (5) The new markets tax credit under section 5725.33 of  30
the Revised Code;  31
       (6) The research and development credit under section  32
166.21 of the Revised Code;  33
       (7) The small business investment credit under section  34
122.86 of the Revised Code;  35
       (8) The rural growth investment credit under section  36
122.152 of the Revised Code;  37
       (9) The opportunity zone investment credit under section  38
122.84 of the Revised Code;  39
       (10) The transformational mixed use development credit  40
under section 122.09 of the Revised Code;  41
       (11) The constitutional commerce credit under section  42
122.1712 of the Revised Code.  43
       Sec. 122.1712. (A) As used in this section:  44
S. B. No. 59  Page 3
As Introduced
       (1) "Payroll" means the total taxable income paid by the  45
employer during the employer's taxable year, or during the  46
calendar year that includes the employer's tax period, to each  47
employee employed in the project. "Payroll" excludes amounts  48
paid before the day the taxpayer becomes eligible for the credit  49
and retirement or other benefits paid or contributed by the  50
employer to or on behalf of employees.  51
       (2) "Baseline payroll" means Ohio employee payroll, except  52
that the applicable measurement period is the twelve months  53
immediately preceding the date the tax credit authority approves  54
the taxpayer's application multiplied by the sum of one plus an  55
annual pay increase factor to be determined by the tax credit  56
authority.  57
       (3) "Ohio employee payroll" means the amount of  58
compensation used to determine the withholding obligations in  59
division (A) of section 5747.06 of the Revised Code and paid by  60
the employer during the employer's taxable year, or during the  61
calendar year that includes the employer's tax period, to the  62
following:  63
       (a) An employee employed in the project who is a resident  64
of this state;  65
       (b) An employee employed at the project location who is  66
not a resident and whose compensation is not exempt from the tax  67
imposed under section 5747.02 of the Revised Code pursuant to a  68
reciprocity agreement with another state under division (A)(2)  69
of section 5747.05 of the Revised Code.  70
       "Ohio employee payroll" excludes any such compensation to  71
the extent it is used to determine the credit under section  72
122.17 or 122.171 of the Revised Code, and excludes amounts paid  73
S. B. No. 59  Page 4
As Introduced
before the day the taxpayer becomes eligible for the credit  74
under this section.  75
       (4) "Excess payroll" means Ohio employee payroll minus  76
baseline payroll.  77
       (5) "Full-time equivalent employees" means the quotient  78
obtained by dividing the total number of hours for which  79
employees were compensated for employment in the project by two  80
thousand eighty. "Full-time equivalent employees" excludes hours  81
that are counted for a credit under section 122.17 or 122.171 of  82
the Revised Code.  83
       (6) "Metric evaluation date" means the date by which the  84
taxpayer must meet all of the commitments included in the  85
agreement with the tax credit authority under division (D) of  86
this section.  87
       (7) "Resident" or "resident of this state" means an  88
individual who is a resident as defined in section 5747.01 of  89
the Revised Code.  90
       (8) "Reporting period" means a period corresponding to the  91
annual report required under division (D)(6) of this section.  92
       (9) "Small arms and ammunition manufacturing" means a  93
business activity which is or may be classified under the north  94
American industry classification system with code number 332992  95
or 332994.  96
       (10) "Small arms and ammunition manufacturing facility"  97
and "facility" mean a factory, mill, plant, warehouse, building,  98
or complex of buildings located in this state and used primarily  99
for small arms and ammunition manufacturing, including both of  100
the following:  101
S. B. No. 59  Page 5
As Introduced
        (a) The land on which the facility is located;  102
        (b) All machinery, equipment, and other tangible personal  103
property located at or within the facility and used in  104
connection with the operation of the facility.  105
        (11) "Tax credit authority" means the tax credit authority  106
created under section 122.17 of the Revised Code.  107
        (B)(1) The tax credit authority may make grants under this  108
section in the form of a refundable credit allowed against the  109
tax imposed by section 5747.02 or 5751.02 of the Revised Code.  110
The credit shall be claimed for the taxable years or tax periods  111
specified in the taxpayer's agreement with the tax credit  112
authority under division (D) of this section. The credit shall  113
be claimed in the order required under section 5747.98 or  114
5751.98 of the Revised Code, as applicable. Except as provided  115
in division (B)(2) of this section, the amount of the credit  116
available for a taxable year or for a calendar year that  117
includes a tax period equals the excess payroll for that year  118
multiplied by the percentage specified in the agreement with the  119
tax credit authority.  120
        (2) The tax credit authority shall not issue credits under  121
this section totaling more than ten million dollars in a fiscal  122
year.  123
        (3) This credit shall be known as the constitutional  124
commerce credit.  125
        (C) A taxpayer or potential taxpayer who proposes a small  126
arms and ammunition manufacturing facility project to create new  127
jobs in this state may apply to the tax credit authority to  128
enter into an agreement for a tax credit under this section.  129
        The director of development shall prescribe the form of  130
S. B. No. 59  Page 6
As Introduced
the application. After receipt of an application, the authority  131
may enter into an agreement with the taxpayer for a credit under  132
this section if it determines all of the following:  133
       (1) The taxpayer's project will increase payroll;  134
       (2) The taxpayer's project is economically sound and will  135
benefit the people of this state by increasing opportunities for  136
employment and strengthening the economy of this state;  137
       (3) Receiving the tax credit is a major factor in the  138
taxpayer's decision to go forward with the project.  139
       (D) An agreement under this section shall include all of  140
the following:  141
       (1) A detailed description of the small arms and  142
ammunition manufacturing facility project that is the subject of  143
the agreement, including the taxpayer's capital investment in  144
the project which shall not be less than two million dollars;  145
       (2) The term of the tax credit, which shall not exceed  146
fifteen years, and the first taxable year, or first tax period,  147
for which the credit may be claimed;  148
       (3) A requirement that the taxpayer shall maintain  149
operations at the project location for at least the greater of  150
seven years or the term of the credit plus three years;  151
       (4) The percentage, as determined by the tax credit  152
authority, of excess payroll that will be allowed as the amount  153
of the credit for each taxable year or tax period;  154
       (5) The pay increase factor to be applied to the  155
taxpayer's baseline payroll;  156
       (6) A requirement that the taxpayer annually shall report  157
S. B. No. 59  Page 7
As Introduced
to the director of development full-time equivalent employees,  158
payroll, Ohio employee payroll, investment, and other  159
information the director needs to perform the director's duties  160
under this section;  161
       (7) A requirement that the director of development  162
annually review the information reported under division (D)(6)  163
of this section and verify compliance with the agreement; if the  164
taxpayer is in compliance, a requirement that the director issue  165
a certificate to the taxpayer stating that the information has  166
been verified and identifying the amount of the credit that may  167
be claimed for the taxable year or tax period stated in the  168
certificate;  169
       (8) A provision providing that the taxpayer may not  170
relocate a substantial number of employment positions from  171
elsewhere in this state to the project location unless the  172
director of development determines that the legislative  173
authority of the county, township, or municipal corporation from  174
which the employment positions would be relocated has been  175
notified by the taxpayer of the relocation.  176
       For purposes of this section, the movement of an  177
employment position from one political subdivision to another  178
political subdivision shall be considered a relocation of an  179
employment position unless the employment position in the first  180
political subdivision is replaced.  181
       (E) If a taxpayer fails to meet or comply with any  182
condition or requirement set forth in a tax credit agreement,  183
the tax credit authority may amend the agreement to reduce the  184
percentage or term of the tax credit. The reduction of the  185
percentage or term may take effect in the current taxable or  186
calendar year.  187
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As Introduced
       (F) Financial statements and other information submitted  188
to the department of development or the tax credit authority by  189
an applicant or recipient of a tax credit under this section,  190
and any information taken for any purpose from such statements  191
or information, are not public records subject to section 149.43  192
of the Revised Code. However, the chairperson of the authority  193
may make use of the statements and other information for  194
purposes of issuing public reports or in connection with court  195
proceedings concerning tax credit agreements under this section.  196
Upon the request of the tax commissioner, the chairperson of the  197
authority shall provide to the commissioner any statement or  198
information submitted by an applicant or recipient of a tax  199
credit in connection with the credit. The commissioner shall  200
preserve the confidentiality of the statement or information.  201
       (G) A taxpayer claiming a credit under this section shall  202
submit to the tax commissioner a copy of the director of  203
development's certificate of verification issued under division  204
(D)(7) of this section with the taxpayer's tax report or return  205
for the taxable year or tax period. Failure to submit a copy of  206
the certificate with the report or return does not invalidate a  207
claim for a credit if the taxpayer submits a copy of the  208
certificate to the commissioner within the time prescribed by  209
section 5703.0510 of the Revised Code or within thirty days  210
after the commissioner requests it.  211
       (H) The director of development, after consultation with  212
the tax commissioner and in accordance with Chapter 119. of the  213
Revised Code, shall adopt rules necessary to implement this  214
section. The rules may provide for recipients of tax credits  215
under this section to be charged fees to cover administrative  216
costs of the tax credit program. The fees collected shall be  217
credited to the tax incentives operating fund created in section  218
S. B. No. 59  Page 9
As Introduced
122.174 of the Revised Code.  219
       (I) For purposes of this section, a taxpayer may include a  220
pass-through entity. A pass-through entity may elect to pass the  221
credit received under this section against the tax imposed under  222
section 5747.02 of the Revised Code through to the persons to  223
whom the income or profit of the entity is distributed. The  224
election shall be made on the annual report required under  225
division (D)(6) of this section. The election applies to and is  226
irrevocable for the credit for which the report is submitted. If  227
the election is made, the credit shall be apportioned among  228
those persons in the same proportions as those in which the  229
income or profit is distributed.  230
       (J)(1) If the director of development determines that a  231
taxpayer who has received a credit under this section is not  232
complying with the requirements of the agreement, the director  233
shall notify the tax credit authority of the noncompliance.  234
After receiving such a notice, and after giving the taxpayer an  235
opportunity to explain the noncompliance, the tax credit  236
authority may require the taxpayer to refund to this state a  237
portion of the credit in accordance with the following:  238
       (a) If the taxpayer fails to comply with the requirement  239
under division (D)(3) of this section, an amount determined in  240
accordance with the following:  241
       (i) If the taxpayer maintained operations at the project  242
location for a period less than or equal to the term of the  243
credit, an amount not exceeding one hundred per cent of the sum  244
of any credits allowed and received under this section;  245
       (ii) If the taxpayer maintained operations at the project  246
location for a period longer than the term of the credit, but  247
S. B. No. 59  Page 10
As Introduced
less than the greater of seven years or the term of the credit  248
plus three years, an amount not exceeding seventy-five per cent  249
of the sum of any credits allowed and received under this  250
section.  251
       (b) If, on the metric evaluation date, the taxpayer fails  252
to substantially meet the job creation, payroll, or investment  253
requirements included in the agreement, an amount determined at  254
the discretion of the authority;  255
       (c) If the taxpayer fails to substantially maintain the  256
number of new full-time equivalent employees or amount of  257
payroll required under the agreement at any time during the term  258
of the agreement after the metric evaluation date, an amount  259
determined at the discretion of the authority.  260
       (2) If a taxpayer files for bankruptcy and fails as  261
described in division (J)(1)(a), (b), or (c) of this section,  262
the director may immediately commence an action to recoup an  263
amount not exceeding one hundred per cent of the sum of any  264
credits received by the taxpayer under this section.  265
       (3) In determining the portion of the tax credit to be  266
refunded to this state, the tax credit authority shall consider  267
the effect of market conditions on the taxpayer's project and  268
whether the taxpayer continues to maintain other operations in  269
this state. After making the determination, the authority shall  270
certify the amount to be refunded to the tax commissioner. The  271
commissioner shall make an assessment for that amount against  272
the taxpayer under Chapter 5747. or 5751. of the Revised Code.  273
The time limitations on assessments under those chapters do not  274
apply to an assessment under this division, but the commissioner  275
shall make the assessment within one year after the date the  276
authority certifies to the commissioner the amount to be  277
S. B. No. 59  Page 11
As Introduced
refunded.  278
       Sec. 5739.02. For the purpose of providing revenue with  279
which to meet the needs of the state, for the use of the general  280
revenue fund of the state, for the purpose of securing a  281
thorough and efficient system of common schools throughout the  282
state, for the purpose of affording revenues, in addition to  283
those from general property taxes, permitted under  284
constitutional limitations, and from other sources, for the  285
support of local governmental functions, and for the purpose of  286
reimbursing the state for the expense of administering this  287
chapter, an excise tax is hereby levied on each retail sale made  288
in this state.  289
       (A)(1) The tax shall be collected as provided in section  290
5739.025 of the Revised Code. The rate of the tax shall be five  291
and three-fourths per cent. The tax applies and is collectible  292
when the sale is made, regardless of the time when the price is  293
paid or delivered.  294
       (2) In the case of the lease or rental, with a fixed term  295
of more than thirty days or an indefinite term with a minimum  296
period of more than thirty days, of any motor vehicles designed  297
by the manufacturer to carry a load of not more than one ton,  298
watercraft, outboard motor, or aircraft, or of any tangible  299
personal property, other than motor vehicles designed by the  300
manufacturer to carry a load of more than one ton, to be used by  301
the lessee or renter primarily for business purposes, the tax  302
shall be collected by the vendor at the time the lease or rental  303
is consummated and shall be calculated by the vendor on the  304
basis of the total amount to be paid by the lessee or renter  305
under the lease agreement. If the total amount of the  306
consideration for the lease or rental includes amounts that are  307
S. B. No. 59  Page 12
As Introduced
not calculated at the time the lease or rental is executed, the  308
tax shall be calculated and collected by the vendor at the time  309
such amounts are billed to the lessee or renter. In the case of  310
an open-end lease or rental, the tax shall be calculated by the  311
vendor on the basis of the total amount to be paid during the  312
initial fixed term of the lease or rental, and for each  313
subsequent renewal period as it comes due. As used in this  314
division, "motor vehicle" has the same meaning as in section  315
4501.01 of the Revised Code, and "watercraft" includes an  316
outdrive unit attached to the watercraft.  317
       A lease with a renewal clause and a termination penalty or  318
similar provision that applies if the renewal clause is not  319
exercised is presumed to be a sham transaction. In such a case,  320
the tax shall be calculated and paid on the basis of the entire  321
length of the lease period, including any renewal periods, until  322
the termination penalty or similar provision no longer applies.  323
The taxpayer shall bear the burden, by a preponderance of the  324
evidence, that the transaction or series of transactions is not  325
a sham transaction.  326
       (3) Except as provided in division (A)(2) of this section,  327
in the case of a sale, the price of which consists in whole or  328
in part of the lease or rental of tangible personal property,  329
the tax shall be measured by the installments of that lease or  330
rental.  331
       (4) In the case of a sale of a physical fitness facility  332
service or recreation and sports club service, the price of  333
which consists in whole or in part of a membership for the  334
receipt of the benefit of the service, the tax applicable to the  335
sale shall be measured by the installments thereof.  336
       (B) The tax does not apply to the following:  337
S. B. No. 59  Page 13
As Introduced
       (1) Sales to the state or any of its political  338
subdivisions, or to any other state or its political  339
subdivisions if the laws of that state exempt from taxation  340
sales made to this state and its political subdivisions  341
including either of the following:  342
       (a) Sales or rentals of tangible personal property by  343
construction contractors or subcontractors to provide temporary  344
traffic control or temporary structures, including material and  345
equipment used to comply with the Ohio manual of uniform traffic  346
control devices adopted pursuant to section 4511.09 of the  347
Revised Code, whereby the state or any of its political  348
subdivisions take title to, or permanent or temporary possession  349
of, such tangible personal property for use by the state or any  350
of its political subdivisions, including for use by the general  351
public thereof;  352
       (b) Sales of services by construction contractors or  353
subcontractors to provide temporary traffic control or  354
structures, including labor used to comply with the Ohio manual  355
of uniform traffic control devices adopted pursuant to section  356
4511.09 of the Revised Code, whereby the state or any of its  357
political subdivisions, including the general public thereof,  358
receive the benefit of such services.  359
       As used in divisions (B)(1)(a) and (b) of this section,  360
"temporary structures" include temporary roads, bridges, drains,  361
and pavement.  362
       (2) Sales of food for human consumption off the premises  363
where sold;  364
       (3) Sales of food sold to students only in a cafeteria,  365
dormitory, fraternity, or sorority maintained in a private,  366
S. B. No. 59  Page 14
As Introduced
public, or parochial school, college, or university;  367
       (4) Sales of newspapers and sales or transfers of  368
magazines distributed as controlled circulation publications;  369
       (5) The furnishing, preparing, or serving of meals without  370
charge by an employer to an employee provided the employer  371
records the meals as part compensation for services performed or  372
work done;  373
       (6)(a) Sales of motor fuel upon receipt, use,  374
distribution, or sale of which in this state a tax is imposed by  375
the law of this state, but this exemption shall not apply to the  376
sale of motor fuel on which a refund of the tax is allowable  377
under division (A) of section 5735.14 of the Revised Code; and  378
the tax commissioner may deduct the amount of tax levied by this  379
section applicable to the price of motor fuel when granting a  380
refund of motor fuel tax pursuant to division (A) of section  381
5735.14 of the Revised Code and shall cause the amount deducted  382
to be paid into the general revenue fund of this state;  383
       (b) Sales of motor fuel other than that described in  384
division (B)(6)(a) of this section and used for powering a  385
refrigeration unit on a vehicle other than one used primarily to  386
provide comfort to the operator or occupants of the vehicle.  387
       (7) Sales of natural gas by a natural gas company or  388
municipal gas utility, of water by a water-works company, or of  389
steam by a heating company, if in each case the thing sold is  390
delivered to consumers through pipes or conduits, and all sales  391
of communications services by a telegraph company, all terms as  392
defined in section 5727.01 of the Revised Code, and sales of  393
electricity delivered through wires;  394
       (8) Casual sales by a person, or auctioneer employed  395
S. B. No. 59  Page 15
As Introduced
directly by the person to conduct such sales, except as to such  396
sales of motor vehicles, watercraft or outboard motors required  397
to be titled under section 1548.06 of the Revised Code,  398
watercraft documented with the United States coast guard,  399
snowmobiles, and all-purpose vehicles as defined in section  400
4519.01 of the Revised Code;  401
       (9)(a) Sales of services or tangible personal property,  402
other than motor vehicles, mobile homes, and manufactured homes,  403
by churches, organizations exempt from taxation under section  404
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit  405
organizations operated exclusively for charitable purposes as  406
defined in division (B)(12) of this section, provided that the  407
number of days on which such tangible personal property or  408
services, other than items never subject to the tax, are sold  409
does not exceed six in any calendar year, except as otherwise  410
provided in division (B)(9)(b) of this section. If the number of  411
days on which such sales are made exceeds six in any calendar  412
year, the church or organization shall be considered to be  413
engaged in business and all subsequent sales by it shall be  414
subject to the tax. In counting the number of days, all sales by  415
groups within a church or within an organization shall be  416
considered to be sales of that church or organization.  417
       (b) The limitation on the number of days on which tax-  418
exempt sales may be made by a church or organization under  419
division (B)(9)(a) of this section does not apply to sales made  420
by student clubs and other groups of students of a primary or  421
secondary school, or a parent-teacher association, booster  422
group, or similar organization that raises money to support or  423
fund curricular or extracurricular activities of a primary or  424
secondary school.  425
S. B. No. 59  Page 16
As Introduced
       (c) Divisions (B)(9)(a) and (b) of this section do not  426
apply to sales by a noncommercial educational radio or  427
television broadcasting station.  428
       (10) Sales not within the taxing power of this state under  429
the Constitution or laws of the United States or the  430
Constitution of this state including either of the following:  431
       (a) Sales or rentals of tangible personal property by  432
construction contractors or subcontractors to provide temporary  433
traffic control or temporary structures, including material and  434
equipment used to comply with the Ohio manual of uniform traffic  435
control devices adopted pursuant to section 4511.09 of the  436
Revised Code, whereby the United States takes title to, or  437
permanent or temporary possession of, such tangible personal  438
property for use by the United States including for use by the  439
general public thereof;  440
       (b) Sales of services by construction contractors or  441
subcontractors to provide temporary traffic control or  442
structures, including labor used to comply with the Ohio manual  443
of uniform traffic control devices adopted pursuant to section  444
4511.09 of the Revised Code, whereby the United States,  445
including the general public thereof, receives the benefit of  446
such services.  447
       As used in divisions (B)(10)(a) and (b) of this section,  448
"temporary structures" include temporary roads, bridges, drains,  449
and pavement.  450
       (11) Except for transactions that are sales under division  451
(B)(3)(p) of section 5739.01 of the Revised Code, the  452
transportation of persons or property, unless the transportation  453
is by a private investigation and security service;  454
S. B. No. 59  Page 17
As Introduced
        (12) Sales of tangible personal property or services to  455
churches, to organizations exempt from taxation under section  456
501(c)(3) of the Internal Revenue Code of 1986, and to any other  457
nonprofit organizations operated exclusively for charitable  458
purposes in this state, no part of the net income of which  459
inures to the benefit of any private shareholder or individual,  460
and no substantial part of the activities of which consists of  461
carrying on propaganda or otherwise attempting to influence  462
legislation; sales to offices administering one or more homes  463
for the aged or one or more hospital facilities exempt under  464
section 140.08 of the Revised Code; and sales to organizations  465
described in division (D) of section 5709.12 of the Revised  466
Code.  467
        "Charitable purposes" means the relief of poverty; the  468
improvement of health through the alleviation of illness,  469
disease, or injury; the operation of an organization exclusively  470
for the provision of professional, laundry, printing, and  471
purchasing services to hospitals or charitable institutions; the  472
operation of a home for the aged, as defined in section 5701.13  473
of the Revised Code; the operation of a radio or television  474
broadcasting station that is licensed by the federal  475
communications commission as a noncommercial educational radio  476
or television station; the operation of a nonprofit animal  477
adoption service or a county humane society; the promotion of  478
education by an institution of learning that maintains a faculty  479
of qualified instructors, teaches regular continuous courses of  480
study, and confers a recognized diploma upon completion of a  481
specific curriculum; the operation of a parent-teacher  482
association, booster group, or similar organization primarily  483
engaged in the promotion and support of the curricular or  484
extracurricular activities of a primary or secondary school; the  485
S. B. No. 59  Page 18
As Introduced
operation of a community or area center in which presentations  486
in music, dramatics, the arts, and related fields are made in  487
order to foster public interest and education therein; the  488
production of performances in music, dramatics, and the arts; or  489
the promotion of education by an organization engaged in  490
carrying on research in, or the dissemination of, scientific and  491
technological knowledge and information primarily for the  492
public.  493
       Nothing in this division shall be deemed to exempt sales  494
to any organization for use in the operation or carrying on of a  495
trade or business, or sales to a home for the aged for use in  496
the operation of independent living facilities as defined in  497
division (A) of section 5709.12 of the Revised Code.  498
       (13) Building and construction materials and services sold  499
to construction contractors for incorporation into a structure  500
or improvement to real property under a construction contract  501
with this state or a political subdivision of this state, or  502
with the United States government or any of its agencies;  503
building and construction materials and services sold to  504
construction contractors for incorporation into a structure or  505
improvement to real property that are accepted for ownership by  506
this state or any of its political subdivisions, or by the  507
United States government or any of its agencies at the time of  508
completion of the structures or improvements; building and  509
construction materials sold to construction contractors for  510
incorporation into a horticulture structure or livestock  511
structure for a person engaged in the business of horticulture  512
or producing livestock; building materials and services sold to  513
a construction contractor for incorporation into a house of  514
public worship or religious education, or a building used  515
exclusively for charitable purposes under a construction  516
S. B. No. 59  Page 19
As Introduced
contract with an organization whose purpose is as described in  517
division (B)(12) of this section; building materials and  518
services sold to a construction contractor for incorporation  519
into a building under a construction contract with an  520
organization exempt from taxation under section 501(c)(3) of the  521
Internal Revenue Code of 1986 when the building is to be used  522
exclusively for the organization's exempt purposes; tangible  523
personal property sold for incorporation into the construction  524
of a sports facility under section 307.696 of the Revised Code;  525
building and construction materials and services sold to a  526
construction contractor for incorporation into real property  527
outside this state if such materials and services, when sold to  528
a construction contractor in the state in which the real  529
property is located for incorporation into real property in that  530
state, would be exempt from a tax on sales levied by that state;  531
building and construction materials for incorporation into a  532
transportation facility pursuant to a public-private agreement  533
entered into under sections 5501.70 to 5501.83 of the Revised  534
Code; until one calendar year after the construction of a  535
convention center that qualifies for property tax exemption  536
under section 5709.084 of the Revised Code is completed,  537
building and construction materials and services sold to a  538
construction contractor for incorporation into the real property  539
comprising that convention center; and building and construction  540
materials sold for incorporation into a structure or improvement  541
to real property that is used primarily as, or primarily in  542
support of, a manufacturing facility or research and development  543
facility and that is to be owned by a megaproject operator upon  544
completion and located at the site of a megaproject that  545
satisfies the criteria described in division (A)(11)(a)(ii) of  546
section 122.17 of the Revised Code, provided that the sale  547
occurs during the period that the megaproject operator has an  548
S. B. No. 59  Page 20
As Introduced
agreement for such megaproject with the tax credit authority  549
under division (D) of section 122.17 of the Revised Code that  550
remains in effect and has not expired or been terminated.  551
       (14) Sales of ships or vessels or rail rolling stock used  552
or to be used principally in interstate or foreign commerce, and  553
repairs, alterations, fuel, and lubricants for such ships or  554
vessels or rail rolling stock;  555
       (15) Sales to persons primarily engaged in any of the  556
activities mentioned in division (B)(42)(a), (g), or (h) of this  557
section, to persons engaged in making retail sales, or to  558
persons who purchase for sale from a manufacturer tangible  559
personal property that was produced by the manufacturer in  560
accordance with specific designs provided by the purchaser, of  561
packages, including material, labels, and parts for packages,  562
and of machinery, equipment, and material for use primarily in  563
packaging tangible personal property produced for sale,  564
including any machinery, equipment, and supplies used to make  565
labels or packages, to prepare packages or products for  566
labeling, or to label packages or products, by or on the order  567
of the person doing the packaging, or sold at retail. "Packages"  568
includes bags, baskets, cartons, crates, boxes, cans, bottles,  569
bindings, wrappings, and other similar devices and containers,  570
but does not include motor vehicles or bulk tanks, trailers, or  571
similar devices attached to motor vehicles. "Packaging" means  572
placing in a package. Division (B)(15) of this section does not  573
apply to persons engaged in highway transportation for hire.  574
       (16) Sales of food to persons using supplemental nutrition  575
assistance program benefits to purchase the food. As used in  576
this division, "food" has the same meaning as in 7 U.S.C. 2012  577
and federal regulations adopted pursuant to the Food and  578
S. B. No. 59  Page 21
As Introduced
Nutrition Act of 2008.  579
       (17) Sales to persons engaged in farming, agriculture,  580
horticulture, or floriculture, of tangible personal property for  581
use or consumption primarily in the production by farming,  582
agriculture, horticulture, or floriculture of other tangible  583
personal property for use or consumption primarily in the  584
production of tangible personal property for sale by farming,  585
agriculture, horticulture, or floriculture; or material and  586
parts for incorporation into any such tangible personal property  587
for use or consumption in production; and of tangible personal  588
property for such use or consumption in the conditioning or  589
holding of products produced by and for such use, consumption,  590
or sale by persons engaged in farming, agriculture,  591
horticulture, or floriculture, except where such property is  592
incorporated into real property;  593
       (18) Sales of drugs for a human being that may be  594
dispensed only pursuant to a prescription; insulin as recognized  595
in the official United States pharmacopoeia; urine and blood  596
testing materials when used by diabetics or persons with  597
hypoglycemia to test for glucose or acetone; hypodermic syringes  598
and needles when used by diabetics for insulin injections;  599
epoetin alfa when purchased for use in the treatment of persons  600
with medical disease; hospital beds when purchased by hospitals,  601
nursing homes, or other medical facilities; and medical oxygen  602
and medical oxygen-dispensing equipment when purchased by  603
hospitals, nursing homes, or other medical facilities;  604
       (19) Sales of prosthetic devices, durable medical  605
equipment for home use, or mobility enhancing equipment, when  606
made pursuant to a prescription and when such devices or  607
equipment are for use by a human being.  608
S. B. No. 59  Page 22
As Introduced
       (20) Sales of emergency and fire protection vehicles and  609
equipment to nonprofit organizations for use solely in providing  610
fire protection and emergency services, including trauma care  611
and emergency medical services, for political subdivisions of  612
the state;  613
       (21) Sales of tangible personal property manufactured in  614
this state, if sold by the manufacturer in this state to a  615
retailer for use in the retail business of the retailer outside  616
of this state and if possession is taken from the manufacturer  617
by the purchaser within this state for the sole purpose of  618
immediately removing the same from this state in a vehicle owned  619
by the purchaser;  620
       (22) Sales of services provided by the state or any of its  621
political subdivisions, agencies, instrumentalities,  622
institutions, or authorities, or by governmental entities of the  623
state or any of its political subdivisions, agencies,  624
instrumentalities, institutions, or authorities;  625
       (23) Sales of motor vehicles to nonresidents of this state  626
under the circumstances described in division (B) of section  627
5739.029 of the Revised Code;  628
       (24) Sales to persons engaged in the preparation of eggs  629
for sale of tangible personal property used or consumed directly  630
in such preparation, including such tangible personal property  631
used for cleaning, sanitizing, preserving, grading, sorting, and  632
classifying by size; packages, including material and parts for  633
packages, and machinery, equipment, and material for use in  634
packaging eggs for sale; and handling and transportation  635
equipment and parts therefor, except motor vehicles licensed to  636
operate on public highways, used in intraplant or interplant  637
transfers or shipment of eggs in the process of preparation for  638
S. B. No. 59  Page 23
As Introduced
sale, when the plant or plants within or between which such  639
transfers or shipments occur are operated by the same person.  640
"Packages" includes containers, cases, baskets, flats, fillers,  641
filler flats, cartons, closure materials, labels, and labeling  642
materials, and "packaging" means placing therein.  643
       (25)(a) Sales of water to a consumer for residential use;  644
       (b) Sales of water by a nonprofit corporation engaged  645
exclusively in the treatment, distribution, and sale of water to  646
consumers, if such water is delivered to consumers through pipes  647
or tubing.  648
       (26) Fees charged for inspection or reinspection of motor  649
vehicles under section 3704.14 of the Revised Code;  650
       (27) Sales to persons licensed to conduct a food service  651
operation pursuant to section 3717.43 of the Revised Code, of  652
tangible personal property primarily used directly for the  653
following:  654
       (a) To prepare food for human consumption for sale;  655
       (b) To preserve food that has been or will be prepared for  656
human consumption for sale by the food service operator, not  657
including tangible personal property used to display food for  658
selection by the consumer;  659
       (c) To clean tangible personal property used to prepare or  660
serve food for human consumption for sale.  661
       (28) Sales of animals by nonprofit animal adoption  662
services or county humane societies;  663
       (29) Sales of services to a corporation described in  664
division (A) of section 5709.72 of the Revised Code, and sales  665
of tangible personal property that qualifies for exemption from  666
S. B. No. 59  Page 24
As Introduced
taxation under section 5709.72 of the Revised Code;  667
        (30) Sales and installation of agricultural land tile, as  668
defined in division (B)(5)(a) of section 5739.01 of the Revised  669
Code;  670
        (31) Sales and erection or installation of portable grain  671
bins, as defined in division (B)(5)(b) of section 5739.01 of the  672
Revised Code;  673
        (32) The sale, lease, repair, and maintenance of, parts  674
for, or items attached to or incorporated in, motor vehicles  675
that are primarily used for transporting tangible personal  676
property belonging to others by a person engaged in highway  677
transportation for hire, except for packages and packaging used  678
for the transportation of tangible personal property;  679
        (33) Sales to the state headquarters of any veterans'  680
organization in this state that is either incorporated and  681
issued a charter by the congress of the United States or is  682
recognized by the United States veterans administration, for use  683
by the headquarters;  684
        (34) Sales to a telecommunications service vendor, mobile  685
telecommunications service vendor, or satellite broadcasting  686
service vendor of tangible personal property and services used  687
directly and primarily in transmitting, receiving, switching, or  688
recording any interactive, one- or two-way electromagnetic  689
communications, including voice, image, data, and information,  690
through the use of any medium, including, but not limited to,  691
poles, wires, cables, switching equipment, computers, and record  692
storage devices and media, and component parts for the tangible  693
personal property. The exemption provided in this division shall  694
be in lieu of all other exemptions under division (B)(42)(a) or  695
S. B. No. 59  Page 25
As Introduced
(n) of this section to which the vendor may otherwise be  696
entitled, based upon the use of the thing purchased in providing  697
the telecommunications, mobile telecommunications, or satellite  698
broadcasting service.  699
       (35)(a) Sales where the purpose of the consumer is to use  700
or consume the things transferred in making retail sales and  701
consisting of newspaper inserts, catalogues, coupons, flyers,  702
gift certificates, or other advertising material that prices and  703
describes tangible personal property offered for retail sale.  704
       (b) Sales to direct marketing vendors of preliminary  705
materials such as photographs, artwork, and typesetting that  706
will be used in printing advertising material; and of printed  707
matter that offers free merchandise or chances to win sweepstake  708
prizes and that is mailed to potential customers with  709
advertising material described in division (B)(35)(a) of this  710
section;  711
       (c) Sales of equipment such as telephones, computers,  712
facsimile machines, and similar tangible personal property  713
primarily used to accept orders for direct marketing retail  714
sales.  715
       (d) Sales of automatic food vending machines that preserve  716
food with a shelf life of forty-five days or less by  717
refrigeration and dispense it to the consumer.  718
       For purposes of division (B)(35) of this section, "direct  719
marketing" means the method of selling where consumers order  720
tangible personal property by United States mail, delivery  721
service, or telecommunication and the vendor delivers or ships  722
the tangible personal property sold to the consumer from a  723
warehouse, catalogue distribution center, or similar fulfillment  724
S. B. No. 59  Page 26
As Introduced
facility by means of the United States mail, delivery service,  725
or common carrier.  726
        (36) Sales to a person engaged in the business of  727
horticulture or producing livestock of materials to be  728
incorporated into a horticulture structure or livestock  729
structure;  730
        (37) Sales of personal computers, computer monitors,  731
computer keyboards, modems, and other peripheral computer  732
equipment to an individual who is licensed or certified to teach  733
in an elementary or a secondary school in this state for use by  734
that individual in preparation for teaching elementary or  735
secondary school students;  736
        (38) Sales of tangible personal property that is not  737
required to be registered or licensed under the laws of this  738
state to a citizen of a foreign nation that is not a citizen of  739
the United States, provided the property is delivered to a  740
person in this state that is not a related member of the  741
purchaser, is physically present in this state for the sole  742
purpose of temporary storage and package consolidation, and is  743
subsequently delivered to the purchaser at a delivery address in  744
a foreign nation. As used in division (B)(38) of this section,  745
"related member" has the same meaning as in section 5733.042 of  746
the Revised Code, and "temporary storage" means the storage of  747
tangible personal property for a period of not more than sixty  748
days.  749
        (39) Sales of used manufactured homes and used mobile  750
homes, as defined in section 5739.0210 of the Revised Code, made  751
on or after January 1, 2000;  752
        (40) Sales of tangible personal property and services to a  753
S. B. No. 59  Page 27
As Introduced
provider of electricity used or consumed directly and primarily  754
in generating, transmitting, or distributing electricity for use  755
by others, including property that is or is to be incorporated  756
into and will become a part of the consumer's production,  757
transmission, or distribution system and that retains its  758
classification as tangible personal property after  759
incorporation; fuel or power used in the production,  760
transmission, or distribution of electricity; energy conversion  761
equipment as defined in section 5727.01 of the Revised Code; and  762
tangible personal property and services used in the repair and  763
maintenance of the production, transmission, or distribution  764
system, including only those motor vehicles as are specially  765
designed and equipped for such use. The exemption provided in  766
this division shall be in lieu of all other exemptions in  767
division (B)(42)(a) or (n) of this section to which a provider  768
of electricity may otherwise be entitled based on the use of the  769
tangible personal property or service purchased in generating,  770
transmitting, or distributing electricity.  771
       (41) Sales to a person providing services under division  772
(B)(3)(p) of section 5739.01 of the Revised Code of tangible  773
personal property and services used directly and primarily in  774
providing taxable services under that section.  775
       (42) Sales where the purpose of the purchaser is to do any  776
of the following:  777
       (a) To incorporate the thing transferred as a material or  778
a part into tangible personal property to be produced for sale  779
by manufacturing, assembling, processing, or refining; or to use  780
or consume the thing transferred directly in producing tangible  781
personal property for sale by mining, including, without  782
limitation, the extraction from the earth of all substances that  783
S. B. No. 59  Page 28
As Introduced
are classed geologically as minerals, or directly in the  784
rendition of a public utility service, except that the sales tax  785
levied by this section shall be collected upon all meals,  786
drinks, and food for human consumption sold when transporting  787
persons. This paragraph does not exempt from "retail sale" or  788
"sales at retail" the sale of tangible personal property that is  789
to be incorporated into a structure or improvement to real  790
property.  791
       (b) To hold the thing transferred as security for the  792
performance of an obligation of the vendor;  793
       (c) To resell, hold, use, or consume the thing transferred  794
as evidence of a contract of insurance;  795
       (d) To use or consume the thing directly in commercial  796
fishing;  797
       (e) To incorporate the thing transferred as a material or  798
a part into, or to use or consume the thing transferred directly  799
in the production of, magazines distributed as controlled  800
circulation publications;  801
       (f) To use or consume the thing transferred in the  802
production and preparation in suitable condition for market and  803
sale of printed, imprinted, overprinted, lithographic,  804
multilithic, blueprinted, photostatic, or other productions or  805
reproductions of written or graphic matter;  806
       (g) To use the thing transferred, as described in section  807
5739.011 of the Revised Code, primarily in a manufacturing  808
operation to produce tangible personal property for sale;  809
       (h) To use the benefit of a warranty, maintenance or  810
service contract, or similar agreement, as described in division  811
(B)(7) of section 5739.01 of the Revised Code, to repair or  812
S. B. No. 59  Page 29
As Introduced
maintain tangible personal property, if all of the property that  813
is the subject of the warranty, contract, or agreement would not  814
be subject to the tax imposed by this section;  815
       (i) To use the thing transferred as qualified research and  816
development equipment;  817
       (j) To use or consume the thing transferred primarily in  818
storing, transporting, mailing, or otherwise handling purchased  819
sales inventory in a warehouse, distribution center, or similar  820
facility when the inventory is primarily distributed outside  821
this state to retail stores of the person who owns or controls  822
the warehouse, distribution center, or similar facility, to  823
retail stores of an affiliated group of which that person is a  824
member, or by means of direct marketing. This division does not  825
apply to motor vehicles registered for operation on the public  826
highways. As used in this division, "affiliated group" has the  827
same meaning as in division (B)(3)(e) of section 5739.01 of the  828
Revised Code and "direct marketing" has the same meaning as in  829
division (B)(35) of this section.  830
       (k) To use or consume the thing transferred to fulfill a  831
contractual obligation incurred by a warrantor pursuant to a  832
warranty provided as a part of the price of the tangible  833
personal property sold or by a vendor of a warranty, maintenance  834
or service contract, or similar agreement the provision of which  835
is defined as a sale under division (B)(7) of section 5739.01 of  836
the Revised Code;  837
       (l) To use or consume the thing transferred in the  838
production of a newspaper for distribution to the public;  839
       (m) To use tangible personal property to perform a service  840
listed in division (B)(3) of section 5739.01 of the Revised  841
S. B. No. 59  Page 30
As Introduced
Code, if the property is or is to be permanently transferred to  842
the consumer of the service as an integral part of the  843
performance of the service;  844
       (n) To use or consume the thing transferred primarily in  845
producing tangible personal property for sale by farming,  846
agriculture, horticulture, or floriculture. Persons engaged in  847
rendering farming, agriculture, horticulture, or floriculture  848
services for others are deemed engaged primarily in farming,  849
agriculture, horticulture, or floriculture. This paragraph does  850
not exempt from "retail sale" or "sales at retail" the sale of  851
tangible personal property that is to be incorporated into a  852
structure or improvement to real property.  853
       (o) To use or consume the thing transferred in acquiring,  854
formatting, editing, storing, and disseminating data or  855
information by electronic publishing;  856
       (p) To provide the thing transferred to the owner or  857
lessee of a motor vehicle that is being repaired or serviced, if  858
the thing transferred is a rented motor vehicle and the  859
purchaser is reimbursed for the cost of the rented motor vehicle  860
by a manufacturer, warrantor, or provider of a maintenance,  861
service, or other similar contract or agreement, with respect to  862
the motor vehicle that is being repaired or serviced;  863
       (q) To use or consume the thing transferred directly in  864
production of crude oil and natural gas for sale. Persons  865
engaged in rendering production services for others are deemed  866
engaged in production.  867
       As used in division (B)(42)(q) of this section,  868
"production" means operations and tangible personal property  869
directly used to expose and evaluate an underground reservoir  870
S. B. No. 59  Page 31
As Introduced
that may contain hydrocarbon resources, prepare the wellbore for  871
production, and lift and control all substances yielded by the  872
reservoir to the surface of the earth.  873
       (i) For the purposes of division (B)(42)(q) of this  874
section, the "thing transferred" includes, but is not limited  875
to, any of the following:  876
       (I) Services provided in the construction of permanent  877
access roads, services provided in the construction of the well  878
site, and services provided in the construction of temporary  879
impoundments;  880
       (II) Equipment and rigging used for the specific purpose  881
of creating with integrity a wellbore pathway to underground  882
reservoirs;  883
       (III) Drilling and workover services used to work within a  884
subsurface wellbore, and tangible personal property directly  885
used in providing such services;  886
       (IV) Casing, tubulars, and float and centralizing  887
equipment;  888
       (V) Trailers to which production equipment is attached;  889
       (VI) Well completion services, including cementing of  890
casing, and tangible personal property directly used in  891
providing such services;  892
       (VII) Wireline evaluation, mud logging, and perforation  893
services, and tangible personal property directly used in  894
providing such services;  895
       (VIII) Reservoir stimulation, hydraulic fracturing, and  896
acidizing services, and tangible personal property directly used  897
in providing such services, including all material pumped  898
S. B. No. 59  Page 32
As Introduced
downhole;  899
        (IX) Pressure pumping equipment;  900
        (X) Artificial lift systems equipment;  901
        (XI) Wellhead equipment and well site equipment used to  902
separate, stabilize, and control hydrocarbon phases and produced  903
water;  904
        (XII) Tangible personal property directly used to control  905
production equipment.  906
        (ii) For the purposes of division (B)(42)(q) of this  907
section, the "thing transferred" does not include any of the  908
following:  909
        (I) Tangible personal property used primarily in the  910
exploration and production of any mineral resource regulated  911
under Chapter 1509. of the Revised Code other than oil or gas;  912
        (II) Tangible personal property used primarily in storing,  913
holding, or delivering solutions or chemicals used in well  914
stimulation as defined in section 1509.01 of the Revised Code;  915
        (III) Tangible personal property used primarily in  916
preparing, installing, or reclaiming foundations for drilling or  917
pumping equipment or well stimulation material tanks;  918
        (IV) Tangible personal property used primarily in  919
transporting, delivering, or removing equipment to or from the  920
well site or storing such equipment before its use at the well  921
site;  922
        (V) Tangible personal property used primarily in gathering  923
operations occurring off the well site, including gathering  924
pipelines transporting hydrocarbon gas or liquids away from a  925
S. B. No. 59  Page 33
As Introduced
crude oil or natural gas production facility;  926
       (VI) Tangible personal property that is to be incorporated  927
into a structure or improvement to real property;  928
       (VII) Well site fencing, lighting, or security systems;  929
       (VIII) Communication devices or services;  930
       (IX) Office supplies;  931
       (X) Trailers used as offices or lodging;  932
       (XI) Motor vehicles of any kind;  933
       (XII) Tangible personal property used primarily for the  934
storage of drilling byproducts and fuel not used for production;  935
       (XIII) Tangible personal property used primarily as a  936
safety device;  937
       (XIV) Data collection or monitoring devices;  938
       (XV) Access ladders, stairs, or platforms attached to  939
storage tanks.  940
       The enumeration of tangible personal property in division  941
(B)(42)(q)(ii) of this section is not intended to be exhaustive,  942
and any tangible personal property not so enumerated shall not  943
necessarily be construed to be a "thing transferred" for the  944
purposes of division (B)(42)(q) of this section.  945
       The commissioner shall adopt and promulgate rules under  946
sections 119.01 to 119.13 of the Revised Code that the  947
commissioner deems necessary to administer division (B)(42)(q)  948
of this section.  949
       As used in division (B)(42) of this section, "thing"  950
includes all transactions included in divisions (B)(3)(a), (b),  951
S. B. No. 59  Page 34
As Introduced
and (e) of section 5739.01 of the Revised Code.  952
       (43) Sales conducted through a coin operated device that  953
activates vacuum equipment or equipment that dispenses water,  954
whether or not in combination with soap or other cleaning agents  955
or wax, to the consumer for the consumer's use on the premises  956
in washing, cleaning, or waxing a motor vehicle, provided no  957
other personal property or personal service is provided as part  958
of the transaction.  959
       (44) Sales of replacement and modification parts for  960
engines, airframes, instruments, and interiors in, and paint  961
for, aircraft used primarily in a fractional aircraft ownership  962
program, and sales of services for the repair, modification, and  963
maintenance of such aircraft, and machinery, equipment, and  964
supplies primarily used to provide those services.  965
       (45) Sales of telecommunications service that is used  966
directly and primarily to perform the functions of a call  967
center. As used in this division, "call center" means any  968
physical location where telephone calls are placed or received  969
in high volume for the purpose of making sales, marketing,  970
customer service, technical support, or other specialized  971
business activity, and that employs at least fifty individuals  972
that engage in call center activities on a full-time basis, or  973
sufficient individuals to fill fifty full-time equivalent  974
positions.  975
       (46) Sales by a telecommunications service vendor of 900  976
service to a subscriber. This division does not apply to  977
information services.  978
       (47) Sales of value-added non-voice data service. This  979
division does not apply to any similar service that is not  980
S. B. No. 59  Page 35
As Introduced
otherwise a telecommunications service.  981
       (48) Sales of feminine hygiene products.  982
       (49) Sales of materials, parts, equipment, or engines used  983
in the repair or maintenance of aircraft or avionics systems of  984
such aircraft, and sales of repair, remodeling, replacement, or  985
maintenance services in this state performed on aircraft or on  986
an aircraft's avionics, engine, or component materials or parts.  987
As used in division (B)(49) of this section, "aircraft" means  988
aircraft of more than six thousand pounds maximum certified  989
takeoff weight or used exclusively in general aviation.  990
       (50) Sales of full flight simulators that are used for  991
pilot or flight-crew training, sales of repair or replacement  992
parts or components, and sales of repair or maintenance services  993
for such full flight simulators. "Full flight simulator" means a  994
replica of a specific type, or make, model, and series of  995
aircraft cockpit. It includes the assemblage of equipment and  996
computer programs necessary to represent aircraft operations in  997
ground and flight conditions, a visual system providing an out-  998
of-the-cockpit view, and a system that provides cues at least  999
equivalent to those of a three-degree-of-freedom motion system,  1000
and has the full range of capabilities of the systems installed  1001
in the device as described in appendices A and B of part 60 of  1002
chapter 1 of title 14 of the Code of Federal Regulations.  1003
       (51) Any transfer or lease of tangible personal property  1004
between the state and JobsOhio in accordance with section  1005
4313.02 of the Revised Code.  1006
       (52)(a) Sales to a qualifying corporation.  1007
       (b) As used in division (B)(52) of this section:  1008
       (i) "Qualifying corporation" means a nonprofit corporation  1009
S. B. No. 59  Page 36
As Introduced
organized in this state that leases from an eligible county  1010
land, buildings, structures, fixtures, and improvements to the  1011
land that are part of or used in a public recreational facility  1012
used by a major league professional athletic team or a class A  1013
to class AAA minor league affiliate of a major league  1014
professional athletic team for a significant portion of the  1015
team's home schedule, provided the following apply:  1016
       (I) The facility is leased from the eligible county  1017
pursuant to a lease that requires substantially all of the  1018
revenue from the operation of the business or activity conducted  1019
by the nonprofit corporation at the facility in excess of  1020
operating costs, capital expenditures, and reserves to be paid  1021
to the eligible county at least once per calendar year.  1022
       (II) Upon dissolution and liquidation of the nonprofit  1023
corporation, all of its net assets are distributable to the  1024
board of commissioners of the eligible county from which the  1025
corporation leases the facility.  1026
       (ii) "Eligible county" has the same meaning as in section  1027
307.695 of the Revised Code.  1028
       (53) Sales to or by a cable service provider, video  1029
service provider, or radio or television broadcast station  1030
regulated by the federal government of cable service or  1031
programming, video service or programming, audio service or  1032
programming, or electronically transferred digital audiovisual  1033
or audio work. As used in division (B)(53) of this section,  1034
"cable service" and "cable service provider" have the same  1035
meanings as in section 1332.01 of the Revised Code, and "video  1036
service," "video service provider," and "video programming" have  1037
the same meanings as in section 1332.21 of the Revised Code.  1038
S. B. No. 59  Page 37
As Introduced
       (54) Sales of a digital audio work electronically  1039
transferred for delivery through use of a machine, such as a  1040
juke box, that does all of the following:  1041
       (a) Accepts direct payments to operate;  1042
       (b) Automatically plays a selected digital audio work for  1043
a single play upon receipt of a payment described in division  1044
(B)(54)(a) of this section;  1045
       (c) Operates exclusively for the purpose of playing  1046
digital audio works in a commercial establishment.  1047
       (55)(a) Sales of the following occurring on the first  1048
Friday of August and the following Saturday and Sunday of any  1049
year, except in 2024 or any subsequent year in which a sales tax  1050
holiday is held pursuant to section 5739.41 of the Revised Code:  1051
       (i) An item of clothing, the price of which is seventy-  1052
five dollars or less;  1053
       (ii) An item of school supplies, the price of which is  1054
twenty dollars or less;  1055
       (iii) An item of school instructional material, the price  1056
of which is twenty dollars or less.  1057
       (b) As used in division (B)(55) of this section:  1058
       (i) "Clothing" means all human wearing apparel suitable  1059
for general use. "Clothing" includes, but is not limited to,  1060
aprons, household and shop; athletic supporters; baby receiving  1061
blankets; bathing suits and caps; beach capes and coats; belts  1062
and suspenders; boots; coats and jackets; costumes; diapers,  1063
children and adult, including disposable diapers; earmuffs;  1064
footlets; formal wear; garters and garter belts; girdles; gloves  1065
and mittens for general use; hats and caps; hosiery; insoles for  1066
S. B. No. 59  Page 38
As Introduced
shoes; lab coats; neckties; overshoes; pantyhose; rainwear;  1067
rubber pants; sandals; scarves; shoes and shoe laces; slippers;  1068
sneakers; socks and stockings; steel-toed shoes; underwear;  1069
uniforms, athletic and nonathletic; and wedding apparel.  1070
"Clothing" does not include items purchased for use in a trade  1071
or business; clothing accessories or equipment; protective  1072
equipment; sports or recreational equipment; belt buckles sold  1073
separately; costume masks sold separately; patches and emblems  1074
sold separately; sewing equipment and supplies including, but  1075
not limited to, knitting needles, patterns, pins, scissors,  1076
sewing machines, sewing needles, tape measures, and thimbles;  1077
and sewing materials that become part of "clothing" including,  1078
but not limited to, buttons, fabric, lace, thread, yarn, and  1079
zippers.  1080
       (ii) "School supplies" means items commonly used by a  1081
student in a course of study. "School supplies" includes only  1082
the following items: binders; book bags; calculators; cellophane  1083
tape; blackboard chalk; compasses; composition books; crayons;  1084
erasers; folders, expandable, pocket, plastic, and manila; glue,  1085
paste, and paste sticks; highlighters; index cards; index card  1086
boxes; legal pads; lunch boxes; markers; notebooks; paper,  1087
loose-leaf ruled notebook paper, copy paper, graph paper,  1088
tracing paper, manila paper, colored paper, poster board, and  1089
construction paper; pencil boxes and other school supply boxes;  1090
pencil sharpeners; pencils; pens; protractors; rulers; scissors;  1091
and writing tablets. "School supplies" does not include any item  1092
purchased for use in a trade or business.  1093
       (iii) "School instructional material" means written  1094
material commonly used by a student in a course of study as a  1095
reference and to learn the subject being taught. "School  1096
instructional material" includes only the following items:  1097
S. B. No. 59  Page 39
As Introduced
reference books, reference maps and globes, textbooks, and  1098
workbooks. "School instructional material" does not include any  1099
material purchased for use in a trade or business.  1100
       (56)(a) Sales of adult diapers or incontinence underpads  1101
sold pursuant to a prescription, for the benefit of a medicaid  1102
recipient with a diagnosis of incontinence, and by a medicaid  1103
provider that maintains a valid provider agreement under section  1104
5164.30 of the Revised Code with the department of medicaid,  1105
provided that the medicaid program covers diapers or  1106
incontinence underpads as an incontinence garment.  1107
       (b) As used in division (B)(56)(a) of this section,  1108
"incontinence underpad" means an absorbent product, not worn on  1109
the body, designed to protect furniture or other tangible  1110
personal property from soiling or damage due to human  1111
incontinence.  1112
       (57) Sales of investment metal bullion and investment  1113
coins. "Investment metal bullion" means any bullion described in  1114
section 408(m)(3)(B) of the Internal Revenue Code, regardless of  1115
whether that bullion is in the physical possession of a trustee.  1116
"Investment coin" means any coin composed primarily of gold,  1117
silver, platinum, or palladium.  1118
       (58) Sales of tangible personal property used primarily  1119
for any of the following purposes by a megaproject operator at  1120
the site of a megaproject that satisfies the criteria described  1121
in division (A)(11)(a)(ii) of section 122.17 of the Revised  1122
Code, provided that the sale occurs during the period that the  1123
megaproject operator has an agreement for such megaproject with  1124
the tax credit authority under division (D) of section 122.17 of  1125
the Revised Code that remains in effect and has not expired or  1126
been terminated:  1127
S. B. No. 59  Page 40
As Introduced
       (a) To store, transmit, convey, distribute, recycle,  1128
circulate, or clean water, steam, or other gases used in or  1129
produced as a result of manufacturing activity, including items  1130
that support or aid in the operation of such property;  1131
       (b) To clean or prepare inventory, at any stage of storage  1132
or production, or equipment used in a manufacturing activity,  1133
including chemicals, solvents, catalysts, soaps, and other items  1134
that support or aid in the operation of property;  1135
       (c) To regulate, treat, filter, condition, improve, clean,  1136
maintain, or monitor environmental conditions within areas where  1137
manufacturing activities take place;  1138
       (d) To handle, transport, or convey inventory during  1139
production or manufacturing.  1140
       (59) Documentary services charges imposed pursuant to  1141
section 4517.261 or 4781.24 of the Revised Code.  1142
       (60) Sales of children's diapers.  1143
       (61) Sales of therapeutic or preventative creams and wipes  1144
marketed primarily for use on the skin of children.  1145
       (62) Sales of a child restraint device or booster seat  1146
that meets the national highway traffic safety administration  1147
standard for child restraint systems under 49 C.F.R. 571.213.  1148
       (63) Sales of cribs intended to provide sleeping  1149
accommodations for children that comply with the United States  1150
consumer product safety commission's safety standard for full-  1151
size baby cribs under 16 C.F.R. 1219 or the commission's safety  1152
standard for non-full-size baby cribs under 16 C.F.R. 1220.  1153
       (64) Sales of strollers meant for transporting children  1154
from infancy to about thirty-six months of age that meet the  1155
S. B. No. 59  Page 41
As Introduced
United States consumer product safety commission safety standard  1156
for carriages and strollers under 16 C.F.R. 1227.2.  1157
       (65) The fee imposed by section 3743.22 of the Revised  1158
Code, if it is separately stated on the invoice, bill of sale,  1159
or similar document given by the vendor to the consumer for a  1160
retail sale made in this state.  1161
       (66) Sales of eligible tangible personal property  1162
occurring during the period of a sales tax holiday held pursuant  1163
to section 5739.41 of the Revised Code.  1164
       (67) Sales of qualifying firearms and ammunition.  1165
       As used in division (B)(67) of this section:  1166
       (a) "Qualifying firearm" means a portable firearm,  1167
including a rifle, shotgun, pistol, or revolver, that is  1168
designed to be carried and operated by a single person, and  1169
excludes both of the following:  1170
       (i) Any such firearm, except in the case of a shotgun, the  1171
barrel of which has an internal diameter larger than fifty  1172
caliber;  1173
       (ii) A shotgun, the barrel of which has an internal  1174
diameter larger than ten gauge.  1175
       (b) "Ammunition" means ammunition designed for use in a  1176
qualifying firearm.  1177
       (C) For the purpose of the proper administration of this  1178
chapter, and to prevent the evasion of the tax, it is presumed  1179
that all sales made in this state are subject to the tax until  1180
the contrary is established.  1181
       (D) The tax collected by the vendor from the consumer  1182
S. B. No. 59  Page 42
As Introduced
under this chapter is not part of the price, but is a tax  1183
collection for the benefit of the state, and of counties levying  1184
an additional sales tax pursuant to section 5739.021 or 5739.026  1185
of the Revised Code and of transit authorities levying an  1186
additional sales tax pursuant to section 5739.023 of the Revised  1187
Code. Except for the discount authorized under section 5739.12  1188
of the Revised Code and the effects of any rounding pursuant to  1189
section 5703.055 of the Revised Code, no person other than the  1190
state or such a county or transit authority shall derive any  1191
benefit from the collection or payment of the tax levied by this  1192
section or section 5739.021, 5739.023, or 5739.026 of the  1193
Revised Code.  1194
       Sec. 5747.053. A refundable credit is allowed against a  1195
taxpayer's aggregate tax liability under section 5747.02 of the  1196
Revised Code for a taxpayer or the taxpayer owners of a pass-  1197
through entity that has been issued a tax credit certificate  1198
under division (D)(7) of section 122.1712 of the Revised Code.  1199
The credit shall be claimed for the taxable year stated in the  1200
certificate and equals the amount stated in the certificate. The  1201
credit shall be claimed in the order required under section  1202
5747.98 of the Revised Code. If the credit amount exceeds the  1203
tax otherwise due under section 5747.02 of the Revised Code  1204
after deducting all other credits in that order, the excess  1205
shall be refunded.  1206
       Sec. 5747.98. (A) To provide a uniform procedure for  1207
calculating a taxpayer's aggregate tax liability under section  1208
5747.02 of the Revised Code, a taxpayer shall claim any credits  1209
to which the taxpayer is entitled in the following order:  1210
       Either the retirement income credit under division (B) of  1211
section 5747.055 of the Revised Code or the lump sum retirement  1212
S. B. No. 59  Page 43
As Introduced
income credits under divisions (C), (D), and (E) of that  1213
section;  1214
        Either the senior citizen credit under division (F) of  1215
section 5747.055 of the Revised Code or the lump sum  1216
distribution credit under division (G) of that section;  1217
        The dependent care credit under section 5747.054 of the  1218
Revised Code;  1219
        The credit for displaced workers who pay for job training  1220
under section 5747.27 of the Revised Code;  1221
        The campaign contribution credit under section 5747.29 of  1222
the Revised Code;  1223
        The twenty-dollar personal exemption credit under section  1224
5747.022 of the Revised Code;  1225
        The joint filing credit under division (G)(E) of section  1226
5747.05 of the Revised Code;  1227
        The earned income credit under section 5747.71 of the  1228
Revised Code;  1229
        The nonrefundable credit for education expenses under  1230
section 5747.72 of the Revised Code;  1231
        The nonrefundable credit for donations to scholarship  1232
granting organizations under section 5747.73 of the Revised  1233
Code;  1234
        The nonrefundable credit for tuition paid to a  1235
nonchartered nonpublic school under section 5747.75 of the  1236
Revised Code;  1237
        The nonrefundable vocational job credit under section  1238
5747.057 of the Revised Code;  1239
S. B. No. 59  Page 44
As Introduced
       The nonrefundable job retention credit under division (B)  1240
of section 5747.058 of the Revised Code;  1241
       The enterprise zone credit under section 5709.66 of the  1242
Revised Code;  1243
       The credit for beginning farmers who participate in a  1244
financial management program under division (B) of section  1245
5747.77 of the Revised Code;  1246
       The credit for commercial vehicle operator training  1247
expenses under section 5747.82 of the Revised Code;  1248
       The nonrefundable welcome home Ohio (WHO) program credit  1249
under section 122.633 of the Revised Code;  1250
       The credit for selling or renting agricultural assets to  1251
beginning farmers under division (A) of section 5747.77 of the  1252
Revised Code;  1253
       The credit for purchases of qualifying grape production  1254
property under section 5747.28 of the Revised Code;  1255
       The small business investment credit under section 5747.81  1256
of the Revised Code;  1257
       The nonrefundable lead abatement credit under section  1258
5747.26 of the Revised Code;  1259
       The opportunity zone investment credit under section  1260
5747.86 of the Revised Code;  1261
       The enterprise zone credits under section 5709.65 of the  1262
Revised Code;  1263
       The research and development credit under section 5747.331  1264
of the Revised Code;  1265
       The credit for rehabilitating a historic building under  1266
S. B. No. 59  Page 45
As Introduced
section 5747.76 of the Revised Code;  1267
        The nonrefundable Ohio low-income housing tax credit under  1268
section 5747.83 of the Revised Code;  1269
        The nonrefundable affordable single-family home credit  1270
under section 5747.84 of the Revised Code;  1271
        The nonresident credit under division (A) of section  1272
5747.05 of the Revised Code;  1273
        The credit for a resident's out-of-state income under  1274
division (B) of section 5747.05 of the Revised Code;  1275
        The refundable motion picture and broadway theatrical  1276
production credit under section 5747.66 of the Revised Code;  1277
        The refundable credit for film and theater capital  1278
improvement projects under section 5747.67 of the Revised Code;  1279
        The refundable jobs creation credit or job retention  1280
credit under division (A) of section 5747.058 of the Revised  1281
Code;  1282
        The refundable credit for taxes paid by a qualifying  1283
entity granted under section 5747.059 of the Revised Code;  1284
        The refundable credits for taxes paid by a qualifying  1285
pass-through entity granted under division (I) of section  1286
5747.08 of the Revised Code;  1287
        The refundable credit under section 5747.80 of the Revised  1288
Code for losses on loans made to the Ohio venture capital  1289
program under sections 150.01 to 150.10 of the Revised Code;  1290
        The refundable credit for rehabilitating a historic  1291
building under section 5747.76 of the Revised Code;  1292
        The refundable credit under section 5747.39 of the Revised  1293
S. B. No. 59  Page 46
As Introduced
Code for taxes levied under section 5747.38 of the Revised Code  1294
paid by an electing pass-through entity;  1295
       The refundable constitutional commerce credit under  1296
section 5747.053 of the Revised Code.  1297
       (B) For any credit, except the refundable credits  1298
enumerated in this section and the credit granted under division  1299
(H) of section 5747.08 of the Revised Code, the amount of the  1300
credit for a taxable year shall not exceed the taxpayer's  1301
aggregate amount of tax due under section 5747.02 of the Revised  1302
Code, after allowing for any other credit that precedes it in  1303
the order required under this section. Any excess amount of a  1304
particular credit may be carried forward if authorized under the  1305
section creating that credit. Nothing in this chapter shall be  1306
construed to allow a taxpayer to claim, directly or indirectly,  1307
a credit more than once for a taxable year.  1308
       Sec. 5751.56. A refundable credit is allowed against the  1309
tax imposed by section 5751.02 of the Revised Code for any  1310
taxpayer that has been issued a tax credit certificate under  1311
division (D)(7) of section 122.1712 of the Revised Code. The  1312
credit shall be claimed for the tax period stated in the  1313
certificate and equals the amount stated in the certificate. The  1314
credit shall be claimed in the order required under section  1315
5751.98 of the Revised Code. If the credit amount exceeds the  1316
tax otherwise due under section 5751.02 of the Revised Code  1317
after deducting all other credits in that order, the excess  1318
shall be refunded.  1319
       Sec. 5751.98. (A) To provide a uniform procedure for  1320
calculating the amount of tax due under this chapter, a taxpayer  1321
shall claim any credits to which it is entitled in the following  1322
order:  1323
S. B. No. 59  Page 47
As Introduced
        The nonrefundable jobs retention credit under division (B)  1324
of section 5751.50 of the Revised Code;  1325
        The nonrefundable credit for qualified research expenses  1326
under division (B) of section 5751.51 of the Revised Code;  1327
        The nonrefundable credit for a borrower's qualified  1328
research and development loan payments under division (B) of  1329
section 5751.52 of the Revised Code;  1330
        The nonrefundable credit for calendar years 2010 to 2029  1331
for unused net operating losses under division (B) of section  1332
5751.53 of the Revised Code;  1333
        The refundable motion picture and broadway theatrical  1334
production credit under section 5751.54 of the Revised Code;  1335
        The refundable credit for film and theater capital  1336
improvement projects under section 5751.55 of the Revised Code;  1337
        The refundable jobs creation credit or job retention  1338
credit under division (A) of section 5751.50 of the Revised  1339
Code;  1340
        The refundable credit for calendar year 2030 for unused  1341
net operating losses under division (C) of section 5751.53 of  1342
the Revised Code;  1343
        The refundable constitutional commerce credit under  1344
section 5751.56 of the Revised Code.  1345
        (B) For any credit except the refundable credits  1346
enumerated in this section, the amount of the credit for a tax  1347
period shall not exceed the tax due after allowing for any other  1348
credit that precedes it in the order required under this  1349
section. Any excess amount of a particular credit may be carried  1350
forward if authorized under the section creating the credit.  1351
S. B. No. 59  Page 48
As Introduced
       Section 2. That existing sections 107.036, 5739.02,  1352
5747.98, and 5751.98 of the Revised Code are hereby repealed.  1353
       Section 3. The amendment by this act of section 5739.02 of  1354
the Revised Code applies beginning on the first day of the first  1355
month beginning on or after the effective date of this section.  1356