SB 367

As Introduced
136th General Assembly
   Regular Session  S. B. No. 367
       2025-2026
  Senator Brenner
  To amend sections 4582.72, 5739.02, and 5739.03 of  1
  the Revised Code to allow a sales and use tax  2
  exemption for materials and services purchased  3
  for certain projects when a port authority or  4
  county refuses to endorse an agreement  5
  concerning the project.  6
 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
     Section 1. That sections 4582.72, 5739.02, and 5739.03 of  7
the Revised Code be amended to read as follows:  8
     Sec. 4582.72. (A) As used in this section, "minimally  9
acceptable investments" means both of the following, together:  10
     (1) Expenditures of at least twenty-five million dollars  11
for the construction or renovation of improvements to real  12
property;  13
     (2) Obligations to fully or partially finance or otherwise  14
cause to be completed public infrastructure improvements in the  15
area surrounding that property.  16
     (B) Notwithstanding any other provision of this chapter,  17
no port authority created under section 4582.02 or 4582.22 of  18
the Revised Code shall enter an agreement providing for the  19
construction or renovation of improvements to real property  20
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As Introduced
located outside of the port authority's jurisdiction to which  21
all of the following applies without first obtaining approval  22
from the board of county commissioners in the county where the  23
property is located or, if the property is located in more than  24
one county, from the board of county commissioners of each  25
county in which the property is located:  26
       (A)(1) The agreement is with a non-public nonpublic  27
entity.  28
       (B)(2) The majority of the floor space of the improvements  29
that are the subject of the agreement will not be occupied by  30
the port authority upon completion of the construction or  31
renovation.  32
       (C)(3) Building materials purchased for the renovation or  33
construction will qualify for the exemption authorized by  34
division (B)(13) of section 5739.02 of the Revised Code.  35
       (C) No port authority shall unreasonably refuse to enter  36
into an agreement described in division (B) of this section. As  37
used in this division, "unreasonably refuse" means to fail to  38
enter into such an agreement proposed to the port authority  39
within thirty days of its proposal, provided the proposed  40
agreement requires minimally acceptable investments from the  41
person proposing it.  42
       (D) No board of county commissioners shall unreasonably  43
refuse to approve an agreement described in division (B) of this  44
section. As used in this division, "unreasonably refuse" means  45
to fail to approve the agreement within thirty days of the date  46
it is presented to the board of county commissioners, provided  47
the agreement requires minimally acceptable investments from the  48
person that entered into the agreement with the port authority.  49
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As Introduced
       (E) If a port authority unreasonably refuses to enter an  50
agreement, as described in division (C) of this section, or a  51
board of county commissioners unreasonably refuses to approve an  52
agreement, as described in division (D) of this section, the  53
person who proposed or entered the agreement may present it to  54
the tax credit authority created under section 122.17 of the  55
Revised Code.  56
       Upon receipt of a proposed or executed agreement, the tax  57
credit authority shall verify whether it provides for minimally  58
acceptable investments. If the authority determines that the  59
proposed or executed agreement does, the tax credit authority  60
shall provide the person that presented the agreement with a  61
certificate, in a form prescribed by the tax commissioner,  62
authorizing a sales tax exemption under division (B)(13)(k) of  63
section 5739.02 of the Revised Code for construction materials  64
and services to be used in the construction or renovation of  65
improvements to real property that are the primary subject of  66
the minimally acceptable investments.  67
       Sec. 5739.02. For the purpose of providing revenue with  68
which to meet the needs of the state, for the use of the general  69
revenue fund of the state, for the purpose of securing a  70
thorough and efficient system of common schools throughout the  71
state, for the purpose of affording revenues, in addition to  72
those from general property taxes, permitted under  73
constitutional limitations, and from other sources, for the  74
support of local governmental functions, and for the purpose of  75
reimbursing the state for the expense of administering this  76
chapter, an excise tax is hereby levied on each retail sale made  77
in this state.  78
       (A)(1) The tax shall be collected as provided in section  79
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As Introduced
5739.025 of the Revised Code. The rate of the tax shall be five  80
and three-fourths per cent. The tax applies and is collectible  81
when the sale is made, regardless of the time when the price is  82
paid or delivered.  83
       (2) In the case of the lease or rental, with a fixed term  84
of more than thirty days or an indefinite term with a minimum  85
period of more than thirty days, of any motor vehicles designed  86
by the manufacturer to carry a load of not more than one ton,  87
watercraft, outboard motor, or aircraft, or of any tangible  88
personal property, other than motor vehicles designed by the  89
manufacturer to carry a load of more than one ton, to be used by  90
the lessee or renter primarily for business purposes, the tax  91
shall be collected by the vendor at the time the lease or rental  92
is consummated and shall be calculated by the vendor on the  93
basis of the total amount to be paid by the lessee or renter  94
under the lease agreement. If the total amount of the  95
consideration for the lease or rental includes amounts that are  96
not calculated at the time the lease or rental is executed, the  97
tax shall be calculated and collected by the vendor at the time  98
such amounts are billed to the lessee or renter. In the case of  99
an open-end lease or rental, the tax shall be calculated by the  100
vendor on the basis of the total amount to be paid during the  101
initial fixed term of the lease or rental, and for each  102
subsequent renewal period as it comes due. As used in this  103
division, "motor vehicle" has the same meaning as in section  104
4501.01 of the Revised Code, and "watercraft" includes an  105
outdrive unit attached to the watercraft.  106
       A lease with a renewal clause and a termination penalty or  107
similar provision that applies if the renewal clause is not  108
exercised is presumed to be a sham transaction. In such a case,  109
the tax shall be calculated and paid on the basis of the entire  110
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As Introduced
length of the lease period, including any renewal periods, until  111
the termination penalty or similar provision no longer applies.  112
The taxpayer shall bear the burden, by a preponderance of the  113
evidence, that the transaction or series of transactions is not  114
a sham transaction.  115
       (3) Except as provided in division (A)(2) of this section,  116
in the case of a sale, the price of which consists in whole or  117
in part of the lease or rental of tangible personal property,  118
the tax shall be measured by the installments of that lease or  119
rental.  120
       (4) In the case of a sale of a physical fitness facility  121
service or recreation and sports club service, the price of  122
which consists in whole or in part of a membership for the  123
receipt of the benefit of the service, the tax applicable to the  124
sale shall be measured by the installments thereof.  125
       (B) The tax does not apply to the following:  126
       (1) Sales to the state or any of its political  127
subdivisions, or to any other state or its political  128
subdivisions if the laws of that state exempt from taxation  129
sales made to this state and its political subdivisions  130
including either of the following:  131
       (a) Sales or rentals of tangible personal property by  132
construction contractors or subcontractors to provide temporary  133
traffic control or temporary structures, including material and  134
equipment used to comply with the Ohio manual of uniform traffic  135
control devices adopted pursuant to section 4511.09 of the  136
Revised Code, whereby the state or any of its political  137
subdivisions take title to, or permanent or temporary possession  138
of, such tangible personal property for use by the state or any  139
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of its political subdivisions, including for use by the general  140
public thereof;  141
       (b) Sales of services by construction contractors or  142
subcontractors to provide temporary traffic control or  143
structures, including labor used to comply with the Ohio manual  144
of uniform traffic control devices adopted pursuant to section  145
4511.09 of the Revised Code, whereby the state or any of its  146
political subdivisions, including the general public thereof,  147
receive the benefit of such services.  148
       As used in divisions (B)(1)(a) and (b) of this section,  149
"temporary structures" include temporary roads, bridges, drains,  150
and pavement.  151
       (2) Sales of food for human consumption off the premises  152
where sold;  153
       (3) Sales of food sold to students only in a cafeteria,  154
dormitory, fraternity, or sorority maintained in a private,  155
public, or parochial school, college, or university;  156
       (4) Sales of newspapers and sales or transfers of  157
magazines distributed as controlled circulation publications;  158
       (5) The furnishing, preparing, or serving of meals without  159
charge by an employer to an employee provided the employer  160
records the meals as part compensation for services performed or  161
work done;  162
       (6)(a) Sales of motor fuel upon receipt, use,  163
distribution, or sale of which in this state a tax is imposed by  164
the law of this state, but this exemption shall not apply to the  165
sale of motor fuel on which a refund of the tax is allowable  166
under division (A) of section 5735.14 of the Revised Code; and  167
the tax commissioner may deduct the amount of tax levied by this  168
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As Introduced
section applicable to the price of motor fuel when granting a  169
refund of motor fuel tax pursuant to division (A) of section  170
5735.14 of the Revised Code and shall cause the amount deducted  171
to be paid into the general revenue fund of this state;  172
       (b) Sales of motor fuel other than that described in  173
division (B)(6)(a) of this section and used for powering a  174
refrigeration unit on a vehicle other than one used primarily to  175
provide comfort to the operator or occupants of the vehicle.  176
       (7) Sales of natural gas by a natural gas company or  177
municipal gas utility, of water by a water-works company, or of  178
steam by a heating company, if in each case the thing sold is  179
delivered to consumers through pipes or conduits, and all sales  180
of communications services by a telegraph company, all terms as  181
defined in section 5727.01 of the Revised Code, and sales of  182
electricity delivered through wires;  183
       (8) Casual sales by a person, or auctioneer employed  184
directly by the person to conduct such sales, except as to such  185
sales of motor vehicles, watercraft or outboard motors required  186
to be titled under section 1548.06 of the Revised Code,  187
watercraft documented with the United States coast guard,  188
snowmobiles, and all-purpose vehicles as defined in section  189
4519.01 of the Revised Code;  190
       (9)(a) Sales of services or tangible personal property,  191
other than motor vehicles, mobile homes, and manufactured homes,  192
by churches, organizations exempt from taxation under section  193
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit  194
organizations operated exclusively for charitable purposes as  195
defined in division (B)(12) of this section, provided that the  196
number of days on which such tangible personal property or  197
services, other than items never subject to the tax, are sold  198
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As Introduced
does not exceed six in any calendar year, except as otherwise  199
provided in division (B)(9)(b) of this section. If the number of  200
days on which such sales are made exceeds six in any calendar  201
year, the church or organization shall be considered to be  202
engaged in business and all subsequent sales by it shall be  203
subject to the tax. In counting the number of days, all sales by  204
groups within a church or within an organization shall be  205
considered to be sales of that church or organization.  206
       (b) The limitation on the number of days on which tax-  207
exempt sales may be made by a church or organization under  208
division (B)(9)(a) of this section does not apply to sales made  209
by student clubs and other groups of students of a primary or  210
secondary school, or a parent-teacher association, booster  211
group, or similar organization that raises money to support or  212
fund curricular or extracurricular activities of a primary or  213
secondary school.  214
       (c) Divisions (B)(9)(a) and (b) of this section do not  215
apply to sales by a noncommercial educational radio or  216
television broadcasting station.  217
       (10) Sales not within the taxing power of this state under  218
the Constitution or laws of the United States or the  219
Constitution of this state including either of the following:  220
       (a) Sales or rentals of tangible personal property by  221
construction contractors or subcontractors to provide temporary  222
traffic control or temporary structures, including material and  223
equipment used to comply with the Ohio manual of uniform traffic  224
control devices adopted pursuant to section 4511.09 of the  225
Revised Code, whereby the United States takes title to, or  226
permanent or temporary possession of, such tangible personal  227
property for use by the United States including for use by the  228
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As Introduced
general public thereof;  229
        (b) Sales of services by construction contractors or  230
subcontractors to provide temporary traffic control or  231
structures, including labor used to comply with the Ohio manual  232
of uniform traffic control devices adopted pursuant to section  233
4511.09 of the Revised Code, whereby the United States,  234
including the general public thereof, receives the benefit of  235
such services.  236
        As used in divisions (B)(10)(a) and (b) of this section,  237
"temporary structures" include temporary roads, bridges, drains,  238
and pavement.  239
        (11) Except for transactions that are sales under division  240
(B)(3)(p) of section 5739.01 of the Revised Code, the  241
transportation of persons or property, unless the transportation  242
is by a private investigation and security service;  243
        (12) Sales of tangible personal property or services to  244
churches, to organizations exempt from taxation under section  245
501(c)(3) of the Internal Revenue Code of 1986, and to any other  246
nonprofit organizations operated exclusively for charitable  247
purposes in this state, no part of the net income of which  248
inures to the benefit of any private shareholder or individual,  249
and no substantial part of the activities of which consists of  250
carrying on propaganda or otherwise attempting to influence  251
legislation; sales to offices administering one or more homes  252
for the aged or one or more hospital facilities exempt under  253
section 140.08 of the Revised Code; and sales to organizations  254
described in division (D) of section 5709.12 of the Revised  255
Code.  256
        "Charitable purposes" means the relief of poverty; the  257
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improvement of health through the alleviation of illness,  258
disease, or injury; the operation of an organization exclusively  259
for the provision of professional, laundry, printing, and  260
purchasing services to hospitals or charitable institutions; the  261
operation of a home for the aged, as defined in section 5701.13  262
of the Revised Code; the operation of a radio or television  263
broadcasting station that is licensed by the federal  264
communications commission as a noncommercial educational radio  265
or television station; the operation of a nonprofit animal  266
adoption service or a county humane society; the promotion of  267
education by an institution of learning that maintains a faculty  268
of qualified instructors, teaches regular continuous courses of  269
study, and confers a recognized diploma upon completion of a  270
specific curriculum; the operation of a parent-teacher  271
association, booster group, or similar organization primarily  272
engaged in the promotion and support of the curricular or  273
extracurricular activities of a primary or secondary school; the  274
operation of a community or area center in which presentations  275
in music, dramatics, the arts, and related fields are made in  276
order to foster public interest and education therein; the  277
production of performances in music, dramatics, and the arts; or  278
the promotion of education by an organization engaged in  279
carrying on research in, or the dissemination of, scientific and  280
technological knowledge and information primarily for the  281
public.  282
       Nothing in this division shall be deemed to exempt sales  283
to any organization for use in the operation or carrying on of a  284
trade or business, or sales to a home for the aged for use in  285
the operation of independent living facilities as defined in  286
division (A) of section 5709.12 of the Revised Code.  287
       (13) All of the following:  288
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       (a) Building and construction materials and services sold  289
to construction contractors for incorporation into a structure  290
or improvement to real property under a construction contract  291
with this state or a political subdivision of this state, or  292
with the United States government or any of its agencies;  293
building  294
       (b) Building and construction materials and services sold  295
to construction contractors for incorporation into a structure  296
or improvement to real property that are accepted for ownership  297
by this state or any of its political subdivisions, or by the  298
United States government or any of its agencies at the time of  299
completion of the structures or improvements; building  300
       (c) Building and construction materials sold to  301
construction contractors for incorporation into a horticulture  302
structure or livestock structure for a person engaged in the  303
business of horticulture or producing livestock; building  304
       (d) Building materials and services sold to a construction  305
contractor for incorporation into a house of public worship or  306
religious education, or a building used exclusively for  307
charitable purposes under a construction contract with an  308
organization whose purpose is as described in division (B)(12)  309
of this section; building  310
       (e) Building materials and services sold to a construction  311
contractor for incorporation into a building under a  312
construction contract with an organization exempt from taxation  313
under section 501(c)(3) of the Internal Revenue Code of 1986  314
when the building is to be used exclusively for the  315
organization's exempt purposes; tangible  316
       (f) Tangible personal property sold for incorporation into  317
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As Introduced
the construction of a sports facility under section 307.696 of  318
the Revised Code; building  319
       (g) Building and construction materials and services sold  320
to a construction contractor for incorporation into real  321
property outside this state if such materials and services, when  322
sold to a construction contractor in the state in which the real  323
property is located for incorporation into real property in that  324
state, would be exempt from a tax on sales levied by that state;  325
building  326
       (h) Building and construction materials for incorporation  327
into a transportation facility pursuant to a public-private  328
agreement entered into under sections 5501.70 to 5501.83 of the  329
Revised Code; until  330
       (i) Until one calendar year after the construction of a  331
convention center that qualifies for property tax exemption  332
under section 5709.084 of the Revised Code is completed,  333
building and construction materials and services sold to a  334
construction contractor for incorporation into the real property  335
comprising that convention center; and building  336
       (j) Building and construction materials sold for  337
incorporation into a structure or improvement to real property  338
that is used primarily as, or primarily in support of, a  339
manufacturing facility or research and development facility and  340
that is to be owned by a megaproject operator upon completion  341
and located at the site of a megaproject that satisfies the  342
criteria described in division (A)(11)(a)(ii) of section 122.17  343
of the Revised Code, provided that the sale occurs during the  344
period that the megaproject operator has an agreement for such  345
megaproject with the tax credit authority under division (D) of  346
section 122.17 of the Revised Code that remains in effect and  347
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has not expired or been terminated;  348
        (k) Building and construction materials and services sold  349
to construction contractors for incorporation into a structure  350
or improvement to real property for which a certificate has been  351
issued under division (E) of section 4582.72 of the Revised  352
Code.  353
        This division does not apply to building and construction  354
materials and services sold to construction contractors for  355
incorporation into a structure or improvement to real property  356
under a construction contract with a port authority if the  357
contract is subject to section 4582.72 of the Revised Code but  358
approval from the appropriate board of county commissioners, as  359
required by that section, has not been obtained.  360
        (14) Sales of ships or vessels or rail rolling stock used  361
or to be used principally in interstate or foreign commerce, and  362
repairs, alterations, fuel, and lubricants for such ships or  363
vessels or rail rolling stock;  364
        (15) Sales to persons primarily engaged in any of the  365
activities mentioned in division (B)(42)(a), (g), or (h) of this  366
section, to persons engaged in making retail sales, or to  367
persons who purchase for sale from a manufacturer tangible  368
personal property that was produced by the manufacturer in  369
accordance with specific designs provided by the purchaser, of  370
packages, including material, labels, and parts for packages,  371
and of machinery, equipment, and material for use primarily in  372
packaging tangible personal property produced for sale,  373
including any machinery, equipment, and supplies used to make  374
labels or packages, to prepare packages or products for  375
labeling, or to label packages or products, by or on the order  376
of the person doing the packaging, or sold at retail. "Packages"  377
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includes bags, baskets, cartons, crates, boxes, cans, bottles,  378
bindings, wrappings, and other similar devices and containers,  379
but does not include motor vehicles or bulk tanks, trailers, or  380
similar devices attached to motor vehicles. "Packaging" means  381
placing in a package. Division (B)(15) of this section does not  382
apply to persons engaged in highway transportation for hire.  383
       (16) Sales of food to persons using supplemental nutrition  384
assistance program benefits to purchase the food. As used in  385
this division, "food" has the same meaning as in 7 U.S.C. 2012  386
and federal regulations adopted pursuant to the Food and  387
Nutrition Act of 2008.  388
       (17) Sales to persons engaged in farming, agriculture,  389
horticulture, or floriculture, of tangible personal property for  390
use or consumption primarily in the production by farming,  391
agriculture, horticulture, or floriculture of other tangible  392
personal property for use or consumption primarily in the  393
production of tangible personal property for sale by farming,  394
agriculture, horticulture, or floriculture; or material and  395
parts for incorporation into any such tangible personal property  396
for use or consumption in production; and of tangible personal  397
property for such use or consumption in the conditioning or  398
holding of products produced by and for such use, consumption,  399
or sale by persons engaged in farming, agriculture,  400
horticulture, or floriculture, except where such property is  401
incorporated into real property;  402
       (18) Sales of drugs for a human being that may be  403
dispensed only pursuant to a prescription; insulin as recognized  404
in the official United States pharmacopoeia; urine and blood  405
testing materials when used by diabetics or persons with  406
hypoglycemia to test for glucose or acetone; hypodermic syringes  407
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and needles when used by diabetics for insulin injections;  408
epoetin alfa when purchased for use in the treatment of persons  409
with medical disease; hospital beds when purchased by hospitals,  410
nursing homes, or other medical facilities; and medical oxygen  411
and medical oxygen-dispensing equipment when purchased by  412
hospitals, nursing homes, or other medical facilities;  413
       (19) Sales of prosthetic devices, durable medical  414
equipment for home use, or mobility enhancing equipment, when  415
made pursuant to a prescription and when such devices or  416
equipment are for use by a human being.  417
       (20) Sales of emergency and fire protection vehicles and  418
equipment to nonprofit organizations for use solely in providing  419
fire protection and emergency services, including trauma care  420
and emergency medical services, for political subdivisions of  421
the state;  422
       (21) Sales of tangible personal property manufactured in  423
this state, if sold by the manufacturer in this state to a  424
retailer for use in the retail business of the retailer outside  425
of this state and if possession is taken from the manufacturer  426
by the purchaser within this state for the sole purpose of  427
immediately removing the same from this state in a vehicle owned  428
by the purchaser;  429
       (22) Sales of services provided by the state or any of its  430
political subdivisions, agencies, instrumentalities,  431
institutions, or authorities, or by governmental entities of the  432
state or any of its political subdivisions, agencies,  433
instrumentalities, institutions, or authorities;  434
       (23) Sales of motor vehicles to nonresidents of this state  435
under the circumstances described in division (B) of section  436
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5739.029 of the Revised Code;  437
       (24) Sales to persons engaged in the preparation of eggs  438
for sale of tangible personal property used or consumed directly  439
in such preparation, including such tangible personal property  440
used for cleaning, sanitizing, preserving, grading, sorting, and  441
classifying by size; packages, including material and parts for  442
packages, and machinery, equipment, and material for use in  443
packaging eggs for sale; and handling and transportation  444
equipment and parts therefor, except motor vehicles licensed to  445
operate on public highways, used in intraplant or interplant  446
transfers or shipment of eggs in the process of preparation for  447
sale, when the plant or plants within or between which such  448
transfers or shipments occur are operated by the same person.  449
"Packages" includes containers, cases, baskets, flats, fillers,  450
filler flats, cartons, closure materials, labels, and labeling  451
materials, and "packaging" means placing therein.  452
       (25)(a) Sales of water to a consumer for residential use;  453
       (b) Sales of water by a nonprofit corporation engaged  454
exclusively in the treatment, distribution, and sale of water to  455
consumers, if such water is delivered to consumers through pipes  456
or tubing.  457
       (26) Fees charged for inspection or reinspection of motor  458
vehicles under section 3704.14 of the Revised Code;  459
       (27) Sales to persons licensed to conduct a food service  460
operation pursuant to section 3717.43 of the Revised Code, of  461
tangible personal property primarily used directly for the  462
following:  463
       (a) To prepare food for human consumption for sale;  464
       (b) To preserve food that has been or will be prepared for  465
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human consumption for sale by the food service operator, not  466
including tangible personal property used to display food for  467
selection by the consumer;  468
        (c) To clean tangible personal property used to prepare or  469
serve food for human consumption for sale.  470
        (28) Sales of animals by nonprofit animal adoption  471
services or county humane societies;  472
        (29) Sales of services to a corporation described in  473
division (A) of section 5709.72 of the Revised Code, and sales  474
of tangible personal property that qualifies for exemption from  475
taxation under section 5709.72 of the Revised Code;  476
        (30) Sales and installation of agricultural land tile, as  477
defined in division (B)(5)(a) of section 5739.01 of the Revised  478
Code;  479
        (31) Sales and erection or installation of portable grain  480
bins, as defined in division (B)(5)(b) of section 5739.01 of the  481
Revised Code;  482
        (32) The sale, lease, repair, and maintenance of, parts  483
for, or items attached to or incorporated in, motor vehicles  484
that are primarily used for transporting tangible personal  485
property belonging to others by a person engaged in highway  486
transportation for hire, except for packages and packaging used  487
for the transportation of tangible personal property;  488
        (33) Sales to the state headquarters of any veterans'  489
organization in this state that is either incorporated and  490
issued a charter by the congress of the United States or is  491
recognized by the United States veterans administration, for use  492
by the headquarters;  493
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       (34) Sales to a telecommunications service vendor, mobile  494
telecommunications service vendor, or satellite broadcasting  495
service vendor of tangible personal property and services used  496
directly and primarily in transmitting, receiving, switching, or  497
recording any interactive, one- or two-way electromagnetic  498
communications, including voice, image, data, and information,  499
through the use of any medium, including, but not limited to,  500
poles, wires, cables, switching equipment, computers, and record  501
storage devices and media, and component parts for the tangible  502
personal property. The exemption provided in this division shall  503
be in lieu of all other exemptions under division (B)(42)(a) or  504
(n) of this section to which the vendor may otherwise be  505
entitled, based upon the use of the thing purchased in providing  506
the telecommunications, mobile telecommunications, or satellite  507
broadcasting service.  508
       (35) Sales of strollers meant for transporting children  509
from infancy to about thirty-six months of age that meet the  510
United States consumer product safety commission safety standard  511
for carriages and strollers under 16 C.F.R. 1227.2.  512
       (36) Sales to a person engaged in the business of  513
horticulture or producing livestock of materials to be  514
incorporated into a horticulture structure or livestock  515
structure;  516
       (37) Sales of personal computers, computer monitors,  517
computer keyboards, modems, and other peripheral computer  518
equipment to an individual who is licensed or certified to teach  519
in an elementary or a secondary school in this state for use by  520
that individual in preparation for teaching elementary or  521
secondary school students;  522
       (38) Sales of tangible personal property that is not  523
S. B. No. 367  Page 19
As Introduced
required to be registered or licensed under the laws of this  524
state to a citizen of a foreign nation that is not a citizen of  525
the United States, provided the property is delivered to a  526
person in this state that is not a related member of the  527
purchaser, is physically present in this state for the sole  528
purpose of temporary storage and package consolidation, and is  529
subsequently delivered to the purchaser at a delivery address in  530
a foreign nation. As used in division (B)(38) of this section,  531
"related member" has the same meaning as in section 5733.042 of  532
the Revised Code, and "temporary storage" means the storage of  533
tangible personal property for a period of not more than sixty  534
days.  535
        (39) Sales of used manufactured homes and used mobile  536
homes, as defined in section 5739.0210 of the Revised Code, made  537
on or after January 1, 2000;  538
        (40) Sales of tangible personal property and services to a  539
provider of electricity used or consumed directly and primarily  540
in generating, transmitting, or distributing electricity for use  541
by others, including property that is or is to be incorporated  542
into and will become a part of the consumer's production,  543
transmission, or distribution system and that retains its  544
classification as tangible personal property after  545
incorporation; fuel or power used in the production,  546
transmission, or distribution of electricity; energy conversion  547
equipment as defined in section 5727.01 of the Revised Code; and  548
tangible personal property and services used in the repair and  549
maintenance of the production, transmission, or distribution  550
system, including only those motor vehicles as are specially  551
designed and equipped for such use. The exemption provided in  552
this division shall be in lieu of all other exemptions in  553
division (B)(42)(a) or (n) of this section to which a provider  554
S. B. No. 367  Page 20
As Introduced
of electricity may otherwise be entitled based on the use of the  555
tangible personal property or service purchased in generating,  556
transmitting, or distributing electricity.  557
       (41) Sales to a person providing services under division  558
(B)(3)(p) of section 5739.01 of the Revised Code of tangible  559
personal property and services used directly and primarily in  560
providing taxable services under that section.  561
       (42) Sales where the purpose of the purchaser is to do any  562
of the following:  563
       (a) To incorporate the thing transferred as a material or  564
a part into tangible personal property to be produced for sale  565
by manufacturing, assembling, processing, or refining; or to use  566
or consume the thing transferred directly in producing tangible  567
personal property for sale by mining, including, without  568
limitation, the extraction from the earth of all substances that  569
are classed geologically as minerals, or directly in the  570
rendition of a public utility service, except that the sales tax  571
levied by this section shall be collected upon all meals,  572
drinks, and food for human consumption sold when transporting  573
persons. This paragraph does not exempt from "retail sale" or  574
"sales at retail" the sale of tangible personal property that is  575
to be incorporated into a structure or improvement to real  576
property.  577
       (b) To hold the thing transferred as security for the  578
performance of an obligation of the vendor;  579
       (c) To resell, hold, use, or consume the thing transferred  580
as evidence of a contract of insurance;  581
       (d) To use or consume the thing directly in commercial  582
fishing;  583
S. B. No. 367  Page 21
As Introduced
       (e) To incorporate the thing transferred as a material or  584
a part into, or to use or consume the thing transferred directly  585
in the production of, magazines distributed as controlled  586
circulation publications;  587
       (f) To use or consume the thing transferred in the  588
production and preparation in suitable condition for market and  589
sale of printed, imprinted, overprinted, lithographic,  590
multilithic, blueprinted, photostatic, or other productions or  591
reproductions of written or graphic matter;  592
       (g) To use the thing transferred, as described in section  593
5739.011 of the Revised Code, primarily in a manufacturing  594
operation to produce tangible personal property for sale;  595
       (h) To use the benefit of a warranty, maintenance or  596
service contract, or similar agreement, as described in division  597
(B)(7) of section 5739.01 of the Revised Code, to repair or  598
maintain tangible personal property, if all of the property that  599
is the subject of the warranty, contract, or agreement would not  600
be subject to the tax imposed by this section;  601
       (i) To use the thing transferred as qualified research and  602
development equipment;  603
       (j) To use or consume the thing transferred primarily in  604
storing, transporting, mailing, or otherwise handling purchased  605
sales inventory in a warehouse, distribution center, or similar  606
facility when the inventory is primarily distributed outside  607
this state to retail stores of the person who owns or controls  608
the warehouse, distribution center, or similar facility, to  609
retail stores of an affiliated group of which that person is a  610
member, or by means of direct marketing. This division does not  611
apply to motor vehicles registered for operation on the public  612
S. B. No. 367  Page 22
As Introduced
highways. As used in this division, "affiliated group" has the  613
same meaning as in division (B)(3)(e) of section 5739.01 of the  614
Revised Code and "direct marketing" means the method of selling  615
where consumers order tangible personal property by United  616
States mail, delivery service, or telecommunication and the  617
vendor delivers or ships the tangible personal property sold to  618
the consumer from a warehouse, catalogue distribution center, or  619
similar fulfillment facility by means of the United States mail,  620
delivery service, or common carrier.  621
       (k) To use or consume the thing transferred to fulfill a  622
contractual obligation incurred by a warrantor pursuant to a  623
warranty provided as a part of the price of the tangible  624
personal property sold or by a vendor of a warranty, maintenance  625
or service contract, or similar agreement the provision of which  626
is defined as a sale under division (B)(7) of section 5739.01 of  627
the Revised Code;  628
       (l) To use or consume the thing transferred in the  629
production of a newspaper for distribution to the public;  630
       (m) To use tangible personal property to perform a service  631
listed in division (B)(3) of section 5739.01 of the Revised  632
Code, if the property is or is to be permanently transferred to  633
the consumer of the service as an integral part of the  634
performance of the service;  635
       (n) To use or consume the thing transferred primarily in  636
producing tangible personal property for sale by farming,  637
agriculture, horticulture, or floriculture. Persons engaged in  638
rendering farming, agriculture, horticulture, or floriculture  639
services for others are deemed engaged primarily in farming,  640
agriculture, horticulture, or floriculture. This paragraph does  641
not exempt from "retail sale" or "sales at retail" the sale of  642
S. B. No. 367  Page 23
As Introduced
tangible personal property that is to be incorporated into a  643
structure or improvement to real property.  644
       (q)(o) To use or consume the thing transferred directly in  645
production of crude oil and natural gas for sale. Persons  646
engaged in rendering production services for others are deemed  647
engaged in production.  648
       As used in division (B)(42)(q)(B)(42)(o) of this section,  649
"production" means operations and tangible personal property  650
directly used to expose and evaluate an underground reservoir  651
that may contain hydrocarbon resources, prepare the wellbore for  652
production, and lift and control all substances yielded by the  653
reservoir to the surface of the earth.  654
       (i) For the purposes of division (B)(42)(q)(B)(42)(o) of  655
this section, the "thing transferred" includes, but is not  656
limited to, any of the following:  657
       (I) Services provided in the construction of permanent  658
access roads, services provided in the construction of the well  659
site, and services provided in the construction of temporary  660
impoundments;  661
       (II) Equipment and rigging used for the specific purpose  662
of creating with integrity a wellbore pathway to underground  663
reservoirs;  664
       (III) Drilling and workover services used to work within a  665
subsurface wellbore, and tangible personal property directly  666
used in providing such services;  667
       (IV) Casing, tubulars, and float and centralizing  668
equipment;  669
       (V) Trailers to which production equipment is attached;  670
S. B. No. 367  Page 24
As Introduced
       (VI) Well completion services, including cementing of  671
casing, and tangible personal property directly used in  672
providing such services;  673
       (VII) Wireline evaluation, mud logging, and perforation  674
services, and tangible personal property directly used in  675
providing such services;  676
       (VIII) Reservoir stimulation, hydraulic fracturing, and  677
acidizing services, and tangible personal property directly used  678
in providing such services, including all material pumped  679
downhole;  680
       (IX) Pressure pumping equipment;  681
       (X) Artificial lift systems equipment;  682
       (XI) Wellhead equipment and well site equipment used to  683
separate, stabilize, and control hydrocarbon phases and produced  684
water;  685
       (XII) Tangible personal property directly used to control  686
production equipment.  687
       (ii) For the purposes of division (B)(42)(q)(B)(42)(o) of  688
this section, the "thing transferred" does not include any of  689
the following:  690
       (I) Tangible personal property used primarily in the  691
exploration and production of any mineral resource regulated  692
under Chapter 1509. of the Revised Code other than oil or gas;  693
       (II) Tangible personal property used primarily in storing,  694
holding, or delivering solutions or chemicals used in well  695
stimulation as defined in section 1509.01 of the Revised Code;  696
       (III) Tangible personal property used primarily in  697
S. B. No. 367  Page 25
As Introduced
preparing, installing, or reclaiming foundations for drilling or  698
pumping equipment or well stimulation material tanks;  699
        (IV) Tangible personal property used primarily in  700
transporting, delivering, or removing equipment to or from the  701
well site or storing such equipment before its use at the well  702
site;  703
        (V) Tangible personal property used primarily in gathering  704
operations occurring off the well site, including gathering  705
pipelines transporting hydrocarbon gas or liquids away from a  706
crude oil or natural gas production facility;  707
        (VI) Tangible personal property that is to be incorporated  708
into a structure or improvement to real property;  709
        (VII) Well site fencing, lighting, or security systems;  710
        (VIII) Communication devices or services;  711
        (IX) Office supplies;  712
        (X) Trailers used as offices or lodging;  713
        (XI) Motor vehicles of any kind;  714
        (XII) Tangible personal property used primarily for the  715
storage of drilling byproducts and fuel not used for production;  716
        (XIII) Tangible personal property used primarily as a  717
safety device;  718
        (XIV) Data collection or monitoring devices;  719
        (XV) Access ladders, stairs, or platforms attached to  720
storage tanks.  721
        The enumeration of tangible personal property in division  722
(B)(42)(q)(ii)(B)(42)(o)(ii) of this section is not intended to  723
S. B. No. 367  Page 26
As Introduced
be exhaustive, and any tangible personal property not so  724
enumerated shall not necessarily be construed to be a "thing  725
transferred" for the purposes of division (B)(42)(q)(B)(42)(o)  726
of this section.  727
       The commissioner shall adopt and promulgate rules under  728
sections 119.01 to 119.13 of the Revised Code that the  729
commissioner deems necessary to administer division (B)(42)(q)  730
(B)(42)(o) of this section.  731
       As used in division (B)(42) of this section, "thing"  732
includes all transactions included in divisions (B)(3)(a), (b),  733
and (e) of section 5739.01 of the Revised Code.  734
       (43) Sales conducted through a coin operated device that  735
activates vacuum equipment or equipment that dispenses water,  736
whether or not in combination with soap or other cleaning agents  737
or wax, to the consumer for the consumer's use on the premises  738
in washing, cleaning, or waxing a motor vehicle, provided no  739
other personal property or personal service is provided as part  740
of the transaction.  741
       (44) Sales of replacement and modification parts for  742
engines, airframes, instruments, and interiors in, and paint  743
for, aircraft used primarily in a fractional aircraft ownership  744
program, and sales of services for the repair, modification, and  745
maintenance of such aircraft, and machinery, equipment, and  746
supplies primarily used to provide those services.  747
       (45) The fee imposed by section 3743.22 of the Revised  748
Code, if it is separately stated on the invoice, bill of sale,  749
or similar document given by the vendor to the consumer for a  750
retail sale made in this state.  751
       (46) Sales by a telecommunications service vendor of 900  752
S. B. No. 367  Page 27
As Introduced
service to a subscriber. This division does not apply to  753
information services.  754
       (47) Sales of value-added non-voice data service. This  755
division does not apply to any similar service that is not  756
otherwise a telecommunications service.  757
       (48) Sales of feminine hygiene products.  758
       (49) Sales of materials, parts, equipment, or engines used  759
in the repair or maintenance of aircraft or avionics systems of  760
such aircraft, and sales of repair, remodeling, replacement, or  761
maintenance services in this state performed on aircraft or on  762
an aircraft's avionics, engine, or component materials or parts.  763
As used in division (B)(49) of this section, "aircraft" means  764
aircraft of more than six thousand pounds maximum certified  765
takeoff weight or used exclusively in general aviation.  766
       (50) Sales of full flight simulators that are used for  767
pilot or flight-crew training, sales of repair or replacement  768
parts or components, and sales of repair or maintenance services  769
for such full flight simulators. "Full flight simulator" means a  770
replica of a specific type, or make, model, and series of  771
aircraft cockpit. It includes the assemblage of equipment and  772
computer programs necessary to represent aircraft operations in  773
ground and flight conditions, a visual system providing an out-  774
of-the-cockpit view, and a system that provides cues at least  775
equivalent to those of a three-degree-of-freedom motion system,  776
and has the full range of capabilities of the systems installed  777
in the device as described in appendices A and B of part 60 of  778
chapter 1 of title 14 of the Code of Federal Regulations.  779
       (51) Any transfer or lease of tangible personal property  780
between the state and JobsOhio in accordance with section  781
S. B. No. 367  Page 28
As Introduced
4313.02 of the Revised Code.  782
       (52)(a) Sales to a qualifying corporation.  783
       (b) As used in division (B)(52) of this section:  784
       (i) "Qualifying corporation" means a nonprofit corporation  785
organized in this state that leases from an eligible county  786
land, buildings, structures, fixtures, and improvements to the  787
land that are part of or used in a public recreational facility  788
used by a major league professional athletic team or a class A  789
to class AAA minor league affiliate of a major league  790
professional athletic team for a significant portion of the  791
team's home schedule, provided the following apply:  792
       (I) The facility is leased from the eligible county  793
pursuant to a lease that requires substantially all of the  794
revenue from the operation of the business or activity conducted  795
by the nonprofit corporation at the facility in excess of  796
operating costs, capital expenditures, and reserves to be paid  797
to the eligible county at least once per calendar year.  798
       (II) Upon dissolution and liquidation of the nonprofit  799
corporation, all of its net assets are distributable to the  800
board of commissioners of the eligible county from which the  801
corporation leases the facility.  802
       (ii) "Eligible county" has the same meaning as in section  803
307.695 of the Revised Code.  804
       (53) Sales to or by a cable service provider, video  805
service provider, or radio or television broadcast station  806
regulated by the federal government of cable service or  807
programming, video service or programming, audio service or  808
programming, or electronically transferred digital audiovisual  809
or audio work. As used in division (B)(53) of this section,  810
S. B. No. 367  Page 29
As Introduced
"cable service" and "cable service provider" have the same  811
meanings as in section 1332.01 of the Revised Code, and "video  812
service," "video service provider," and "video programming" have  813
the same meanings as in section 1332.21 of the Revised Code.  814
       (54) Sales of a digital audio work electronically  815
transferred for delivery through use of a machine, such as a  816
juke box, that does all of the following:  817
       (a) Accepts direct payments to operate;  818
       (b) Automatically plays a selected digital audio work for  819
a single play upon receipt of a payment described in division  820
(B)(54)(a) of this section;  821
       (c) Operates exclusively for the purpose of playing  822
digital audio works in a commercial establishment.  823
       (55)(a) Sales of the following occurring on the first  824
Friday of August and the following Saturday and Sunday of any  825
year, except in 2024 or any subsequent year in which a sales tax  826
holiday is held pursuant to section 5739.41 of the Revised Code:  827
       (i) An item of clothing, the price of which is seventy-  828
five dollars or less;  829
       (ii) An item of school supplies, the price of which is  830
twenty dollars or less;  831
       (iii) An item of school instructional material, the price  832
of which is twenty dollars or less.  833
       (b) As used in division (B)(55) of this section:  834
       (i) "Clothing" means all human wearing apparel suitable  835
for general use. "Clothing" includes, but is not limited to,  836
aprons, household and shop; athletic supporters; baby receiving  837
S. B. No. 367  Page 30
As Introduced
blankets; bathing suits and caps; beach capes and coats; belts  838
and suspenders; boots; coats and jackets; costumes; diapers,  839
children and adult, including disposable diapers; earmuffs;  840
footlets; formal wear; garters and garter belts; girdles; gloves  841
and mittens for general use; hats and caps; hosiery; insoles for  842
shoes; lab coats; neckties; overshoes; pantyhose; rainwear;  843
rubber pants; sandals; scarves; shoes and shoe laces; slippers;  844
sneakers; socks and stockings; steel-toed shoes; underwear;  845
uniforms, athletic and nonathletic; and wedding apparel.  846
"Clothing" does not include items purchased for use in a trade  847
or business; clothing accessories or equipment; protective  848
equipment; sports or recreational equipment; belt buckles sold  849
separately; costume masks sold separately; patches and emblems  850
sold separately; sewing equipment and supplies including, but  851
not limited to, knitting needles, patterns, pins, scissors,  852
sewing machines, sewing needles, tape measures, and thimbles;  853
and sewing materials that become part of "clothing" including,  854
but not limited to, buttons, fabric, lace, thread, yarn, and  855
zippers.  856
       (ii) "School supplies" means items commonly used by a  857
student in a course of study. "School supplies" includes only  858
the following items: binders; book bags; calculators; cellophane  859
tape; blackboard chalk; compasses; composition books; crayons;  860
erasers; folders, expandable, pocket, plastic, and manila; glue,  861
paste, and paste sticks; highlighters; index cards; index card  862
boxes; legal pads; lunch boxes; markers; notebooks; paper,  863
loose-leaf ruled notebook paper, copy paper, graph paper,  864
tracing paper, manila paper, colored paper, poster board, and  865
construction paper; pencil boxes and other school supply boxes;  866
pencil sharpeners; pencils; pens; protractors; rulers; scissors;  867
and writing tablets. "School supplies" does not include any item  868
S. B. No. 367  Page 31
As Introduced
purchased for use in a trade or business.  869
       (iii) "School instructional material" means written  870
material commonly used by a student in a course of study as a  871
reference and to learn the subject being taught. "School  872
instructional material" includes only the following items:  873
reference books, reference maps and globes, textbooks, and  874
workbooks. "School instructional material" does not include any  875
material purchased for use in a trade or business.  876
       (56)(a) Sales of adult diapers or incontinence underpads  877
sold pursuant to a prescription, for the benefit of a medicaid  878
recipient with a diagnosis of incontinence, and by a medicaid  879
provider that maintains a valid provider agreement under section  880
5164.30 of the Revised Code with the department of medicaid,  881
provided that the medicaid program covers diapers or  882
incontinence underpads as an incontinence garment.  883
       (b) As used in division (B)(56)(a) of this section,  884
"incontinence underpad" means an absorbent product, not worn on  885
the body, designed to protect furniture or other tangible  886
personal property from soiling or damage due to human  887
incontinence.  888
       (57) Sales of investment metal bullion and investment  889
coins. "Investment metal bullion" means any bullion described in  890
section 408(m)(3)(B) of the Internal Revenue Code, regardless of  891
whether that bullion is in the physical possession of a trustee.  892
"Investment coin" means any coin composed primarily of gold,  893
silver, platinum, or palladium.  894
       (58) Sales of tangible personal property used primarily  895
for any of the following purposes by a megaproject operator at  896
the site of a megaproject that satisfies the criteria described  897
S. B. No. 367  Page 32
As Introduced
in division (A)(11)(a)(ii) of section 122.17 of the Revised  898
Code, provided that the sale occurs during the period that the  899
megaproject operator has an agreement for such megaproject with  900
the tax credit authority under division (D) of section 122.17 of  901
the Revised Code that remains in effect and has not expired or  902
been terminated:  903
       (a) To store, transmit, convey, distribute, recycle,  904
circulate, or clean water, steam, or other gases used in or  905
produced as a result of manufacturing activity, including items  906
that support or aid in the operation of such property;  907
       (b) To clean or prepare inventory, at any stage of storage  908
or production, or equipment used in a manufacturing activity,  909
including chemicals, solvents, catalysts, soaps, and other items  910
that support or aid in the operation of property;  911
       (c) To regulate, treat, filter, condition, improve, clean,  912
maintain, or monitor environmental conditions within areas where  913
manufacturing activities take place;  914
       (d) To handle, transport, or convey inventory during  915
production or manufacturing.  916
       (59) Documentary services charges imposed pursuant to  917
section 4517.261 or 4781.24 of the Revised Code.  918
       (60) Sales of children's diapers.  919
       (61) Sales of therapeutic or preventative creams and wipes  920
marketed primarily for use on the skin of children.  921
       (62) Sales of a child restraint device or booster seat  922
that meets the national highway traffic safety administration  923
standard for child restraint systems under 49 C.F.R. 571.213.  924
       (63) Sales of cribs intended to provide sleeping  925
S. B. No. 367  Page 33
As Introduced
accommodations for children that comply with the United States  926
consumer product safety commission's safety standard for full-  927
size baby cribs under 16 C.F.R. 1219 or the commission's safety  928
standard for non-full-size baby cribs under 16 C.F.R. 1220.  929
       (64) Sales of eligible tangible personal property  930
occurring during the period of a sales tax holiday held pursuant  931
to section 5739.41 of the Revised Code.  932
       (C) For the purpose of the proper administration of this  933
chapter, and to prevent the evasion of the tax, it is presumed  934
that all sales made in this state are subject to the tax until  935
the contrary is established.  936
       (D) The tax collected by the vendor from the consumer  937
under this chapter is not part of the price, but is a tax  938
collection for the benefit of the state, and of counties levying  939
an additional sales tax pursuant to section 5739.021 or 5739.026  940
of the Revised Code and of transit authorities levying an  941
additional sales tax pursuant to section 5739.023 of the Revised  942
Code. Except for the discount authorized under section 5739.12  943
of the Revised Code and the effects of any rounding pursuant to  944
section 5703.055 of the Revised Code, no person other than the  945
state or such a county or transit authority shall derive any  946
benefit from the collection or payment of the tax levied by this  947
section or section 5739.021, 5739.023, or 5739.026 of the  948
Revised Code.  949
       Sec. 5739.03. (A) Except as provided in section 5739.05 or  950
section 5739.051 of the Revised Code, the tax imposed by or  951
pursuant to section 5739.02, 5739.021, 5739.023, or 5739.026 of  952
the Revised Code shall be paid by the consumer to the vendor,  953
and each vendor shall collect from the consumer, as a trustee  954
for the state of Ohio, the full and exact amount of the tax  955
S. B. No. 367  Page 34
As Introduced
payable on each taxable sale, in the manner and at the times  956
provided as follows:  957
       (1) If the price is, at or prior to the provision of the  958
service or the delivery of possession of the thing sold to the  959
consumer, paid in currency passed from hand to hand by the  960
consumer or the consumer's agent to the vendor or the vendor's  961
agent, the vendor or the vendor's agent shall collect the tax  962
with and at the same time as the price;  963
       (2) If the price is otherwise paid or to be paid, the  964
vendor or the vendor's agent shall, at or prior to the provision  965
of the service or the delivery of possession of the thing sold  966
to the consumer, charge the tax imposed by or pursuant to  967
section 5739.02, 5739.021, 5739.023, or 5739.026 of the Revised  968
Code to the account of the consumer, which amount shall be  969
collected by the vendor from the consumer in addition to the  970
price. Such sale shall be reported on and the amount of the tax  971
applicable thereto shall be remitted with the return for the  972
period in which the sale is made, and the amount of the tax  973
shall become a legal charge in favor of the vendor and against  974
the consumer.  975
       (B)(1)(a) If any sale is claimed to be exempt under  976
division (E) of section 5739.01 of the Revised Code or under  977
section 5739.02 of the Revised Code, with the exception of  978
divisions (B)(1) to (11), (28), (48), (55), (59), or (62) of  979
section 5739.02 of the Revised Code, the consumer must provide  980
to the vendor, and the vendor must obtain from the consumer, a  981
certificate specifying the reason that the sale is not legally  982
subject to the tax. The certificate shall be in such form, and  983
shall be provided either in a hard copy form or electronic form,  984
as the tax commissioner prescribes.  985
S. B. No. 367  Page 35
As Introduced
       (b) A vendor that obtains a fully completed exemption  986
certificate from a consumer is relieved of liability for  987
collecting and remitting tax on any sale covered by that  988
certificate. If it is determined the exemption was improperly  989
claimed, the consumer shall be liable for any tax due on that  990
sale under section 5739.02, 5739.021, 5739.023, or 5739.026 or  991
Chapter 5741. of the Revised Code. Relief under this division  992
from liability does not apply to any of the following:  993
       (i) A vendor that fraudulently fails to collect tax;  994
       (ii) A vendor that solicits consumers to participate in  995
the unlawful claim of an exemption;  996
       (iii) A vendor that accepts an exemption certificate from  997
a consumer that claims an exemption based on who purchases or  998
who sells property or a service, when the subject of the  999
transaction sought to be covered by the exemption certificate is  1000
actually received by the consumer at a location operated by the  1001
vendor in this state, and this state has posted to its web site  1002
an exemption certificate form that clearly and affirmatively  1003
indicates that the claimed exemption is not available in this  1004
state;  1005
       (iv) A vendor that accepts an exemption certificate from a  1006
consumer who claims a multiple points of use exemption under  1007
division (D) of section 5739.033 of the Revised Code, if the  1008
item purchased is tangible personal property, other than  1009
prewritten computer software.  1010
       (2) The vendor shall maintain records, including exemption  1011
certificates, of all sales on which a consumer has claimed an  1012
exemption, and provide them to the tax commissioner on request.  1013
       (3) The tax commissioner may establish an identification  1014
S. B. No. 367  Page 36
As Introduced
system whereby the commissioner issues an identification number  1015
to a consumer that is exempt from payment of the tax. The  1016
consumer must present the number to the vendor, if any sale is  1017
claimed to be exempt as provided in this section.  1018
       (4) If no certificate is provided or obtained within  1019
ninety days after the date on which such sale is consummated, it  1020
shall be presumed that the tax applies. Failure to have so  1021
provided or obtained a certificate shall not preclude a vendor,  1022
within one hundred twenty days after the tax commissioner gives  1023
written notice of intent to levy an assessment, from either  1024
establishing that the sale is not subject to the tax, or  1025
obtaining, in good faith, a fully completed exemption  1026
certificate.  1027
       (5) Certificates need not be obtained nor provided where  1028
the identity of the consumer is such that the transaction is  1029
never subject to the tax imposed or where the item of tangible  1030
personal property sold or the service provided is never subject  1031
to the tax imposed, regardless of use, or when the sale is in  1032
interstate commerce.  1033
       (6) If a transaction is claimed to be exempt under  1034
division (B)(13) of section 5739.02 of the Revised Code, the  1035
contractor shall obtain certification of the claimed exemption  1036
from the contractee. This certification shall be in addition to  1037
an exemption certificate provided by the contractor to the  1038
vendor. A contractee that provides a certification under this  1039
division shall be deemed to be the consumer of all items  1040
purchased by the contractor under the claim of exemption, if it  1041
is subsequently determined that the exemption is not properly  1042
claimed. The certification shall be in such form as the tax  1043
commissioner prescribes.  1044
S. B. No. 367  Page 37
As Introduced
       (7) If a transaction is claimed to be exempt under  1045
division (B)(13)(B)(13)(f) of section 5739.02 of the Revised  1046
Code, the person that leases a sports facility, as defined in  1047
section 307.696 of the Revised Code, wholly owned by a county  1048
may provide and sign, on behalf of the county, an exemption  1049
certificate required under this section for that exemption.  1050
       (C) As used in this division, "contractee" means a person  1051
who seeks to enter or enters into a contract or agreement with a  1052
contractor or vendor for the construction of real property or  1053
for the sale and installation onto real property of tangible  1054
personal property.  1055
       Any contractor or vendor may request from any contractee a  1056
certification of what portion of the property to be transferred  1057
under such contract or agreement is to be incorporated into the  1058
realty and what portion will retain its status as tangible  1059
personal property after installation is completed. The  1060
contractor or vendor shall request the certification by  1061
certified mail delivered to the contractee, return receipt  1062
requested. Upon receipt of such request and prior to entering  1063
into the contract or agreement, the contractee shall provide to  1064
the contractor or vendor a certification sufficiently detailed  1065
to enable the contractor or vendor to ascertain the resulting  1066
classification of all materials purchased or fabricated by the  1067
contractor or vendor and transferred to the contractee. This  1068
requirement applies to a contractee regardless of whether the  1069
contractee holds a direct payment permit under section 5739.031  1070
of the Revised Code or provides to the contractor or vendor an  1071
exemption certificate as provided under this section.  1072
       For the purposes of the taxes levied by this chapter and  1073
Chapter 5741. of the Revised Code, the contractor or vendor may  1074
S. B. No. 367  Page 38
As Introduced
in good faith rely on the contractee's certification.  1075
Notwithstanding division (B) of section 5739.01 of the Revised  1076
Code, if the tax commissioner determines that certain property  1077
certified by the contractee as tangible personal property  1078
pursuant to this division is, in fact, real property, the  1079
contractee shall be considered to be the consumer of all  1080
materials so incorporated into that real property and shall be  1081
liable for the applicable tax, and the contractor or vendor  1082
shall be excused from any liability on those materials.  1083
       If a contractee fails to provide such certification upon  1084
the request of the contractor or vendor, the contractor or  1085
vendor shall comply with the provisions of this chapter and  1086
Chapter 5741. of the Revised Code without the certification. If  1087
the tax commissioner determines that such compliance has been  1088
performed in good faith and that certain property treated as  1089
tangible personal property by the contractor or vendor is, in  1090
fact, real property, the contractee shall be considered to be  1091
the consumer of all materials so incorporated into that real  1092
property and shall be liable for the applicable tax, and the  1093
construction contractor or vendor shall be excused from any  1094
liability on those materials.  1095
       This division does not apply to any contract or agreement  1096
where the tax commissioner determines as a fact that a  1097
certification under this division was made solely on the  1098
decision or advice of the contractor or vendor.  1099
       (D) Notwithstanding division (B) of section 5739.01 of the  1100
Revised Code, whenever the total rate of tax imposed under this  1101
chapter is increased after the date after a construction  1102
contract is entered into, the contractee shall reimburse the  1103
construction contractor for any additional tax paid on tangible  1104
S. B. No. 367  Page 39
As Introduced
property consumed or services received pursuant to the contract.  1105
       (E) A vendor who files a petition for reassessment  1106
contesting the assessment of tax on sales for which the vendor  1107
obtained no valid exemption certificates and for which the  1108
vendor failed to establish that the sales were properly not  1109
subject to the tax during the one-hundred-twenty-day period  1110
allowed under division (B) of this section, may present to the  1111
tax commissioner additional evidence to prove that the sales  1112
were properly subject to a claim of exception or exemption. The  1113
vendor shall file such evidence within ninety days of the  1114
receipt by the vendor of the notice of assessment, except that,  1115
upon application and for reasonable cause, the period for  1116
submitting such evidence shall be extended thirty days.  1117
       The commissioner shall consider such additional evidence  1118
in reaching the final determination on the assessment and  1119
petition for reassessment.  1120
       (F) Whenever a vendor refunds the price, minus any  1121
separately stated delivery charge, of an item of tangible  1122
personal property on which the tax imposed under this chapter  1123
has been paid, the vendor shall also refund the amount of tax  1124
paid, minus the amount of tax attributable to the delivery  1125
charge.  1126
       Section 2. That existing sections 4582.72, 5739.02, and  1127
5739.03 of the Revised Code are hereby repealed.  1128