As Introduced
136th General Assembly
Regular Session S. B. No. 126
2025-2026
Senators Wilkin, Lang
To amend section 5739.02 of the Revised Code to
exempt from sales and use tax items purchased by
a logistics business to transport manufactured
products, general merchandise, and grocery
products.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 5739.02 of the Revised Code be
amended to read as follows:
Sec. 5739.02. For the purpose of providing revenue with
which to meet the needs of the state, for the use of the general
revenue fund of the state, for the purpose of securing a
thorough and efficient system of common schools throughout the
state, for the purpose of affording revenues, in addition to
those from general property taxes, permitted under
constitutional limitations, and from other sources, for the
support of local governmental functions, and for the purpose of
reimbursing the state for the expense of administering this
chapter, an excise tax is hereby levied on each retail sale made
in this state.
(A)(1) The tax shall be collected as provided in section
5739.025 of the Revised Code. The rate of the tax shall be five
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and three-fourths per cent. The tax applies and is collectible
when the sale is made, regardless of the time when the price is
paid or delivered.
(2) In the case of the lease or rental, with a fixed term
of more than thirty days or an indefinite term with a minimum
period of more than thirty days, of any motor vehicles designed
by the manufacturer to carry a load of not more than one ton,
watercraft, outboard motor, or aircraft, or of any tangible
personal property, other than motor vehicles designed by the
manufacturer to carry a load of more than one ton, to be used by
the lessee or renter primarily for business purposes, the tax
shall be collected by the vendor at the time the lease or rental
is consummated and shall be calculated by the vendor on the
basis of the total amount to be paid by the lessee or renter
under the lease agreement. If the total amount of the
consideration for the lease or rental includes amounts that are
not calculated at the time the lease or rental is executed, the
tax shall be calculated and collected by the vendor at the time
such amounts are billed to the lessee or renter. In the case of
an open-end lease or rental, the tax shall be calculated by the
vendor on the basis of the total amount to be paid during the
initial fixed term of the lease or rental, and for each
subsequent renewal period as it comes due. As used in this
division, "motor vehicle" has the same meaning as in section
4501.01 of the Revised Code, and "watercraft" includes an
outdrive unit attached to the watercraft.
A lease with a renewal clause and a termination penalty or
similar provision that applies if the renewal clause is not
exercised is presumed to be a sham transaction. In such a case,
the tax shall be calculated and paid on the basis of the entire
length of the lease period, including any renewal periods, until
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the termination penalty or similar provision no longer applies.
The taxpayer shall bear the burden, by a preponderance of the
evidence, that the transaction or series of transactions is not
a sham transaction.
(3) Except as provided in division (A)(2) of this section,
in the case of a sale, the price of which consists in whole or
in part of the lease or rental of tangible personal property,
the tax shall be measured by the installments of that lease or
rental.
(4) In the case of a sale of a physical fitness facility
service or recreation and sports club service, the price of
which consists in whole or in part of a membership for the
receipt of the benefit of the service, the tax applicable to the
sale shall be measured by the installments thereof.
(B) The tax does not apply to the following:
(1) Sales to the state or any of its political
subdivisions, or to any other state or its political
subdivisions if the laws of that state exempt from taxation
sales made to this state and its political subdivisions
including either of the following:
(a) Sales or rentals of tangible personal property by
construction contractors or subcontractors to provide temporary
traffic control or temporary structures, including material and
equipment used to comply with the Ohio manual of uniform traffic
control devices adopted pursuant to section 4511.09 of the
Revised Code, whereby the state or any of its political
subdivisions take title to, or permanent or temporary possession
of, such tangible personal property for use by the state or any
of its political subdivisions, including for use by the general
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public thereof;
(b) Sales of services by construction contractors or
subcontractors to provide temporary traffic control or
structures, including labor used to comply with the Ohio manual
of uniform traffic control devices adopted pursuant to section
4511.09 of the Revised Code, whereby the state or any of its
political subdivisions, including the general public thereof,
receive the benefit of such services.
As used in divisions (B)(1)(a) and (b) of this section,
"temporary structures" include temporary roads, bridges, drains,
and pavement.
(2) Sales of food for human consumption off the premises
where sold;
(3) Sales of food sold to students only in a cafeteria,
dormitory, fraternity, or sorority maintained in a private,
public, or parochial school, college, or university;
(4) Sales of newspapers and sales or transfers of
magazines distributed as controlled circulation publications;
(5) The furnishing, preparing, or serving of meals without
charge by an employer to an employee provided the employer
records the meals as part compensation for services performed or
work done;
(6)(a) Sales of motor fuel upon receipt, use,
distribution, or sale of which in this state a tax is imposed by
the law of this state, but this exemption shall not apply to the
sale of motor fuel on which a refund of the tax is allowable
under division (A) of section 5735.14 of the Revised Code; and
the tax commissioner may deduct the amount of tax levied by this
section applicable to the price of motor fuel when granting a
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refund of motor fuel tax pursuant to division (A) of section
5735.14 of the Revised Code and shall cause the amount deducted
to be paid into the general revenue fund of this state;
(b) Sales of motor fuel other than that described in
division (B)(6)(a) of this section and used for powering a
refrigeration unit on a vehicle other than one used primarily to
provide comfort to the operator or occupants of the vehicle.
(7) Sales of natural gas by a natural gas company or
municipal gas utility, of water by a water-works company, or of
steam by a heating company, if in each case the thing sold is
delivered to consumers through pipes or conduits, and all sales
of communications services by a telegraph company, all terms as
defined in section 5727.01 of the Revised Code, and sales of
electricity delivered through wires;
(8) Casual sales by a person, or auctioneer employed
directly by the person to conduct such sales, except as to such
sales of motor vehicles, watercraft or outboard motors required
to be titled under section 1548.06 of the Revised Code,
watercraft documented with the United States coast guard,
snowmobiles, and all-purpose vehicles as defined in section
4519.01 of the Revised Code;
(9)(a) Sales of services or tangible personal property,
other than motor vehicles, mobile homes, and manufactured homes,
by churches, organizations exempt from taxation under section
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit
organizations operated exclusively for charitable purposes as
defined in division (B)(12) of this section, provided that the
number of days on which such tangible personal property or
services, other than items never subject to the tax, are sold
does not exceed six in any calendar year, except as otherwise
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provided in division (B)(9)(b) of this section. If the number of
days on which such sales are made exceeds six in any calendar
year, the church or organization shall be considered to be
engaged in business and all subsequent sales by it shall be
subject to the tax. In counting the number of days, all sales by
groups within a church or within an organization shall be
considered to be sales of that church or organization.
(b) The limitation on the number of days on which tax-
exempt sales may be made by a church or organization under
division (B)(9)(a) of this section does not apply to sales made
by student clubs and other groups of students of a primary or
secondary school, or a parent-teacher association, booster
group, or similar organization that raises money to support or
fund curricular or extracurricular activities of a primary or
secondary school.
(c) Divisions (B)(9)(a) and (b) of this section do not
apply to sales by a noncommercial educational radio or
television broadcasting station.
(10) Sales not within the taxing power of this state under
the Constitution or laws of the United States or the
Constitution of this state including either of the following:
(a) Sales or rentals of tangible personal property by
construction contractors or subcontractors to provide temporary
traffic control or temporary structures, including material and
equipment used to comply with the Ohio manual of uniform traffic
control devices adopted pursuant to section 4511.09 of the
Revised Code, whereby the United States takes title to, or
permanent or temporary possession of, such tangible personal
property for use by the United States including for use by the
general public thereof;
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(b) Sales of services by construction contractors or
subcontractors to provide temporary traffic control or
structures, including labor used to comply with the Ohio manual
of uniform traffic control devices adopted pursuant to section
4511.09 of the Revised Code, whereby the United States,
including the general public thereof, receives the benefit of
such services.
As used in divisions (B)(10)(a) and (b) of this section,
"temporary structures" include temporary roads, bridges, drains,
and pavement.
(11) Except for transactions that are sales under division
(B)(3)(p) of section 5739.01 of the Revised Code, the
transportation of persons or property, unless the transportation
is by a private investigation and security service;
(12) Sales of tangible personal property or services to
churches, to organizations exempt from taxation under section
501(c)(3) of the Internal Revenue Code of 1986, and to any other
nonprofit organizations operated exclusively for charitable
purposes in this state, no part of the net income of which
inures to the benefit of any private shareholder or individual,
and no substantial part of the activities of which consists of
carrying on propaganda or otherwise attempting to influence
legislation; sales to offices administering one or more homes
for the aged or one or more hospital facilities exempt under
section 140.08 of the Revised Code; and sales to organizations
described in division (D) of section 5709.12 of the Revised
Code.
"Charitable purposes" means the relief of poverty; the
improvement of health through the alleviation of illness,
disease, or injury; the operation of an organization exclusively
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for the provision of professional, laundry, printing, and
purchasing services to hospitals or charitable institutions; the
operation of a home for the aged, as defined in section 5701.13
of the Revised Code; the operation of a radio or television
broadcasting station that is licensed by the federal
communications commission as a noncommercial educational radio
or television station; the operation of a nonprofit animal
adoption service or a county humane society; the promotion of
education by an institution of learning that maintains a faculty
of qualified instructors, teaches regular continuous courses of
study, and confers a recognized diploma upon completion of a
specific curriculum; the operation of a parent-teacher
association, booster group, or similar organization primarily
engaged in the promotion and support of the curricular or
extracurricular activities of a primary or secondary school; the
operation of a community or area center in which presentations
in music, dramatics, the arts, and related fields are made in
order to foster public interest and education therein; the
production of performances in music, dramatics, and the arts; or
the promotion of education by an organization engaged in
carrying on research in, or the dissemination of, scientific and
technological knowledge and information primarily for the
public.
Nothing in this division shall be deemed to exempt sales
to any organization for use in the operation or carrying on of a
trade or business, or sales to a home for the aged for use in
the operation of independent living facilities as defined in
division (A) of section 5709.12 of the Revised Code.
(13) Building and construction materials and services sold
to construction contractors for incorporation into a structure
or improvement to real property under a construction contract
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with this state or a political subdivision of this state, or
with the United States government or any of its agencies;
building and construction materials and services sold to
construction contractors for incorporation into a structure or
improvement to real property that are accepted for ownership by
this state or any of its political subdivisions, or by the
United States government or any of its agencies at the time of
completion of the structures or improvements; building and
construction materials sold to construction contractors for
incorporation into a horticulture structure or livestock
structure for a person engaged in the business of horticulture
or producing livestock; building materials and services sold to
a construction contractor for incorporation into a house of
public worship or religious education, or a building used
exclusively for charitable purposes under a construction
contract with an organization whose purpose is as described in
division (B)(12) of this section; building materials and
services sold to a construction contractor for incorporation
into a building under a construction contract with an
organization exempt from taxation under section 501(c)(3) of the
Internal Revenue Code of 1986 when the building is to be used
exclusively for the organization's exempt purposes; tangible
personal property sold for incorporation into the construction
of a sports facility under section 307.696 of the Revised Code;
building and construction materials and services sold to a
construction contractor for incorporation into real property
outside this state if such materials and services, when sold to
a construction contractor in the state in which the real
property is located for incorporation into real property in that
state, would be exempt from a tax on sales levied by that state;
building and construction materials for incorporation into a
transportation facility pursuant to a public-private agreement
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entered into under sections 5501.70 to 5501.83 of the Revised
Code; until one calendar year after the construction of a
convention center that qualifies for property tax exemption
under section 5709.084 of the Revised Code is completed,
building and construction materials and services sold to a
construction contractor for incorporation into the real property
comprising that convention center; and building and construction
materials sold for incorporation into a structure or improvement
to real property that is used primarily as, or primarily in
support of, a manufacturing facility or research and development
facility and that is to be owned by a megaproject operator upon
completion and located at the site of a megaproject that
satisfies the criteria described in division (A)(11)(a)(ii) of
section 122.17 of the Revised Code, provided that the sale
occurs during the period that the megaproject operator has an
agreement for such megaproject with the tax credit authority
under division (D) of section 122.17 of the Revised Code that
remains in effect and has not expired or been terminated.
(14) Sales of ships or vessels or rail rolling stock used
or to be used principally in interstate or foreign commerce, and
repairs, alterations, fuel, and lubricants for such ships or
vessels or rail rolling stock;
(15) Sales to persons primarily engaged in any of the
activities mentioned in division (B)(42)(a), (g), or (h) of this
section, to persons engaged in making retail sales, or to
persons who purchase for sale from a manufacturer tangible
personal property that was produced by the manufacturer in
accordance with specific designs provided by the purchaser, of
packages, including material, labels, and parts for packages,
and of machinery, equipment, and material for use primarily in
packaging tangible personal property produced for sale,
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including any machinery, equipment, and supplies used to make
labels or packages, to prepare packages or products for
labeling, or to label packages or products, by or on the order
of the person doing the packaging, or sold at retail. "Packages"
includes bags, baskets, cartons, crates, boxes, cans, bottles,
bindings, wrappings, and other similar devices and containers,
but does not include motor vehicles or bulk tanks, trailers, or
similar devices attached to motor vehicles. "Packaging" means
placing in a package. Division (B)(15) of this section does not
apply to persons engaged in highway transportation for hire.
(16) Sales of food to persons using supplemental nutrition
assistance program benefits to purchase the food. As used in
this division, "food" has the same meaning as in 7 U.S.C. 2012
and federal regulations adopted pursuant to the Food and
Nutrition Act of 2008.
(17) Sales to persons engaged in farming, agriculture,
horticulture, or floriculture, of tangible personal property for
use or consumption primarily in the production by farming,
agriculture, horticulture, or floriculture of other tangible
personal property for use or consumption primarily in the
production of tangible personal property for sale by farming,
agriculture, horticulture, or floriculture; or material and
parts for incorporation into any such tangible personal property
for use or consumption in production; and of tangible personal
property for such use or consumption in the conditioning or
holding of products produced by and for such use, consumption,
or sale by persons engaged in farming, agriculture,
horticulture, or floriculture, except where such property is
incorporated into real property;
(18) Sales of drugs for a human being that may be
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dispensed only pursuant to a prescription; insulin as recognized
in the official United States pharmacopoeia; urine and blood
testing materials when used by diabetics or persons with
hypoglycemia to test for glucose or acetone; hypodermic syringes
and needles when used by diabetics for insulin injections;
epoetin alfa when purchased for use in the treatment of persons
with medical disease; hospital beds when purchased by hospitals,
nursing homes, or other medical facilities; and medical oxygen
and medical oxygen-dispensing equipment when purchased by
hospitals, nursing homes, or other medical facilities;
(19) Sales of prosthetic devices, durable medical
equipment for home use, or mobility enhancing equipment, when
made pursuant to a prescription and when such devices or
equipment are for use by a human being.
(20) Sales of emergency and fire protection vehicles and
equipment to nonprofit organizations for use solely in providing
fire protection and emergency services, including trauma care
and emergency medical services, for political subdivisions of
the state;
(21) Sales of tangible personal property manufactured in
this state, if sold by the manufacturer in this state to a
retailer for use in the retail business of the retailer outside
of this state and if possession is taken from the manufacturer
by the purchaser within this state for the sole purpose of
immediately removing the same from this state in a vehicle owned
by the purchaser;
(22) Sales of services provided by the state or any of its
political subdivisions, agencies, instrumentalities,
institutions, or authorities, or by governmental entities of the
state or any of its political subdivisions, agencies,
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instrumentalities, institutions, or authorities;
(23) Sales of motor vehicles to nonresidents of this state
under the circumstances described in division (B) of section
5739.029 of the Revised Code;
(24) Sales to persons engaged in the preparation of eggs
for sale of tangible personal property used or consumed directly
in such preparation, including such tangible personal property
used for cleaning, sanitizing, preserving, grading, sorting, and
classifying by size; packages, including material and parts for
packages, and machinery, equipment, and material for use in
packaging eggs for sale; and handling and transportation
equipment and parts therefor, except motor vehicles licensed to
operate on public highways, used in intraplant or interplant
transfers or shipment of eggs in the process of preparation for
sale, when the plant or plants within or between which such
transfers or shipments occur are operated by the same person.
"Packages" includes containers, cases, baskets, flats, fillers,
filler flats, cartons, closure materials, labels, and labeling
materials, and "packaging" means placing therein.
(25)(a) Sales of water to a consumer for residential use;
(b) Sales of water by a nonprofit corporation engaged
exclusively in the treatment, distribution, and sale of water to
consumers, if such water is delivered to consumers through pipes
or tubing.
(26) Fees charged for inspection or reinspection of motor
vehicles under section 3704.14 of the Revised Code;
(27) Sales to persons licensed to conduct a food service
operation pursuant to section 3717.43 of the Revised Code, of
tangible personal property primarily used directly for the
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following:
(a) To prepare food for human consumption for sale;
(b) To preserve food that has been or will be prepared for
human consumption for sale by the food service operator, not
including tangible personal property used to display food for
selection by the consumer;
(c) To clean tangible personal property used to prepare or
serve food for human consumption for sale.
(28) Sales of animals by nonprofit animal adoption
services or county humane societies;
(29) Sales of services to a corporation described in
division (A) of section 5709.72 of the Revised Code, and sales
of tangible personal property that qualifies for exemption from
taxation under section 5709.72 of the Revised Code;
(30) Sales and installation of agricultural land tile, as
defined in division (B)(5)(a) of section 5739.01 of the Revised
Code;
(31) Sales and erection or installation of portable grain
bins, as defined in division (B)(5)(b) of section 5739.01 of the
Revised Code;
(32) The sale, lease, repair, and maintenance of, parts
for, or items attached to or incorporated in, motor vehicles
that are primarily used for transporting tangible personal
property belonging to others by a person engaged in highway
transportation for hire, except for packages and packaging used
for the transportation of tangible personal property;
(33) Sales to the state headquarters of any veterans'
organization in this state that is either incorporated and
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issued a charter by the congress of the United States or is
recognized by the United States veterans administration, for use
by the headquarters;
(34) Sales to a telecommunications service vendor, mobile
telecommunications service vendor, or satellite broadcasting
service vendor of tangible personal property and services used
directly and primarily in transmitting, receiving, switching, or
recording any interactive, one- or two-way electromagnetic
communications, including voice, image, data, and information,
through the use of any medium, including, but not limited to,
poles, wires, cables, switching equipment, computers, and record
storage devices and media, and component parts for the tangible
personal property. The exemption provided in this division shall
be in lieu of all other exemptions under division (B)(42)(a) or
(n) of this section to which the vendor may otherwise be
entitled, based upon the use of the thing purchased in providing
the telecommunications, mobile telecommunications, or satellite
broadcasting service.
(35)(a) Sales where the purpose of the consumer is to use
or consume the things transferred in making retail sales and
consisting of newspaper inserts, catalogues, coupons, flyers,
gift certificates, or other advertising material that prices and
describes tangible personal property offered for retail sale.
(b) Sales to direct marketing vendors of preliminary
materials such as photographs, artwork, and typesetting that
will be used in printing advertising material; and of printed
matter that offers free merchandise or chances to win sweepstake
prizes and that is mailed to potential customers with
advertising material described in division (B)(35)(a) of this
section;
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(c) Sales of equipment such as telephones, computers,
facsimile machines, and similar tangible personal property
primarily used to accept orders for direct marketing retail
sales.
(d) Sales of automatic food vending machines that preserve
food with a shelf life of forty-five days or less by
refrigeration and dispense it to the consumer.
For purposes of division (B)(35) of this section, "direct
marketing" means the method of selling where consumers order
tangible personal property by United States mail, delivery
service, or telecommunication and the vendor delivers or ships
the tangible personal property sold to the consumer from a
warehouse, catalogue distribution center, or similar fulfillment
facility by means of the United States mail, delivery service,
or common carrier.
(36) Sales to a person engaged in the business of
horticulture or producing livestock of materials to be
incorporated into a horticulture structure or livestock
structure;
(37) Sales of personal computers, computer monitors,
computer keyboards, modems, and other peripheral computer
equipment to an individual who is licensed or certified to teach
in an elementary or a secondary school in this state for use by
that individual in preparation for teaching elementary or
secondary school students;
(38) Sales of tangible personal property that is not
required to be registered or licensed under the laws of this
state to a citizen of a foreign nation that is not a citizen of
the United States, provided the property is delivered to a
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person in this state that is not a related member of the
purchaser, is physically present in this state for the sole
purpose of temporary storage and package consolidation, and is
subsequently delivered to the purchaser at a delivery address in
a foreign nation. As used in division (B)(38) of this section,
"related member" has the same meaning as in section 5733.042 of
the Revised Code, and "temporary storage" means the storage of
tangible personal property for a period of not more than sixty
days.
(39) Sales of used manufactured homes and used mobile
homes, as defined in section 5739.0210 of the Revised Code, made
on or after January 1, 2000;
(40) Sales of tangible personal property and services to a
provider of electricity used or consumed directly and primarily
in generating, transmitting, or distributing electricity for use
by others, including property that is or is to be incorporated
into and will become a part of the consumer's production,
transmission, or distribution system and that retains its
classification as tangible personal property after
incorporation; fuel or power used in the production,
transmission, or distribution of electricity; energy conversion
equipment as defined in section 5727.01 of the Revised Code; and
tangible personal property and services used in the repair and
maintenance of the production, transmission, or distribution
system, including only those motor vehicles as are specially
designed and equipped for such use. The exemption provided in
this division shall be in lieu of all other exemptions in
division (B)(42)(a) or (n) of this section to which a provider
of electricity may otherwise be entitled based on the use of the
tangible personal property or service purchased in generating,
transmitting, or distributing electricity.
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(41) Sales to a person providing services under division
(B)(3)(p) of section 5739.01 of the Revised Code of tangible
personal property and services used directly and primarily in
providing taxable services under that section.
(42) Sales where the purpose of the purchaser is to do any
of the following:
(a) To incorporate the thing transferred as a material or
a part into tangible personal property to be produced for sale
by manufacturing, assembling, processing, or refining; or to use
or consume the thing transferred directly in producing tangible
personal property for sale by mining, including, without
limitation, the extraction from the earth of all substances that
are classed geologically as minerals, or directly in the
rendition of a public utility service, except that the sales tax
levied by this section shall be collected upon all meals,
drinks, and food for human consumption sold when transporting
persons. This paragraph does not exempt from "retail sale" or
"sales at retail" the sale of tangible personal property that is
to be incorporated into a structure or improvement to real
property.
(b) To hold the thing transferred as security for the
performance of an obligation of the vendor;
(c) To resell, hold, use, or consume the thing transferred
as evidence of a contract of insurance;
(d) To use or consume the thing directly in commercial
fishing;
(e) To incorporate the thing transferred as a material or
a part into, or to use or consume the thing transferred directly
in the production of, magazines distributed as controlled
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circulation publications;
(f) To use or consume the thing transferred in the
production and preparation in suitable condition for market and
sale of printed, imprinted, overprinted, lithographic,
multilithic, blueprinted, photostatic, or other productions or
reproductions of written or graphic matter;
(g) To use the thing transferred, as described in section
5739.011 of the Revised Code, primarily in a manufacturing
operation to produce tangible personal property for sale;
(h) To use the benefit of a warranty, maintenance or
service contract, or similar agreement, as described in division
(B)(7) of section 5739.01 of the Revised Code, to repair or
maintain tangible personal property, if all of the property that
is the subject of the warranty, contract, or agreement would not
be subject to the tax imposed by this section;
(i) To use the thing transferred as qualified research and
development equipment;
(j) To use or consume the thing transferred primarily in
storing, transporting, mailing, or otherwise handling purchased
sales inventory in a warehouse, distribution center, or similar
facility when the inventory is primarily distributed outside
this state to retail stores of the person who owns or controls
the warehouse, distribution center, or similar facility, to
retail stores of an affiliated group of which that person is a
member, or by means of direct marketing. This division does not
apply to motor vehicles registered for operation on the public
highways. As used in this division, "affiliated group" has the
same meaning as in division (B)(3)(e) of section 5739.01 of the
Revised Code and "direct marketing" has the same meaning as in
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division (B)(35) of this section.
(k) To use or consume the thing transferred to fulfill a
contractual obligation incurred by a warrantor pursuant to a
warranty provided as a part of the price of the tangible
personal property sold or by a vendor of a warranty, maintenance
or service contract, or similar agreement the provision of which
is defined as a sale under division (B)(7) of section 5739.01 of
the Revised Code;
(l) To use or consume the thing transferred in the
production of a newspaper for distribution to the public;
(m) To use tangible personal property to perform a service
listed in division (B)(3) of section 5739.01 of the Revised
Code, if the property is or is to be permanently transferred to
the consumer of the service as an integral part of the
performance of the service;
(n) To use or consume the thing transferred primarily in
producing tangible personal property for sale by farming,
agriculture, horticulture, or floriculture. Persons engaged in
rendering farming, agriculture, horticulture, or floriculture
services for others are deemed engaged primarily in farming,
agriculture, horticulture, or floriculture. This paragraph does
not exempt from "retail sale" or "sales at retail" the sale of
tangible personal property that is to be incorporated into a
structure or improvement to real property.
(o) To use or consume the thing transferred in acquiring,
formatting, editing, storing, and disseminating data or
information by electronic publishing;
(p) To provide the thing transferred to the owner or
lessee of a motor vehicle that is being repaired or serviced, if
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the thing transferred is a rented motor vehicle and the
purchaser is reimbursed for the cost of the rented motor vehicle
by a manufacturer, warrantor, or provider of a maintenance,
service, or other similar contract or agreement, with respect to
the motor vehicle that is being repaired or serviced;
(q) To use or consume the thing transferred directly in
production of crude oil and natural gas for sale. Persons
engaged in rendering production services for others are deemed
engaged in production.
As used in division (B)(42)(q) of this section,
"production" means operations and tangible personal property
directly used to expose and evaluate an underground reservoir
that may contain hydrocarbon resources, prepare the wellbore for
production, and lift and control all substances yielded by the
reservoir to the surface of the earth.
(i) For the purposes of division (B)(42)(q) of this
section, the "thing transferred" includes, but is not limited
to, any of the following:
(I) Services provided in the construction of permanent
access roads, services provided in the construction of the well
site, and services provided in the construction of temporary
impoundments;
(II) Equipment and rigging used for the specific purpose
of creating with integrity a wellbore pathway to underground
reservoirs;
(III) Drilling and workover services used to work within a
subsurface wellbore, and tangible personal property directly
used in providing such services;
(IV) Casing, tubulars, and float and centralizing
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equipment;
(V) Trailers to which production equipment is attached;
(VI) Well completion services, including cementing of
casing, and tangible personal property directly used in
providing such services;
(VII) Wireline evaluation, mud logging, and perforation
services, and tangible personal property directly used in
providing such services;
(VIII) Reservoir stimulation, hydraulic fracturing, and
acidizing services, and tangible personal property directly used
in providing such services, including all material pumped
downhole;
(IX) Pressure pumping equipment;
(X) Artificial lift systems equipment;
(XI) Wellhead equipment and well site equipment used to
separate, stabilize, and control hydrocarbon phases and produced
water;
(XII) Tangible personal property directly used to control
production equipment.
(ii) For the purposes of division (B)(42)(q) of this
section, the "thing transferred" does not include any of the
following:
(I) Tangible personal property used primarily in the
exploration and production of any mineral resource regulated
under Chapter 1509. of the Revised Code other than oil or gas;
(II) Tangible personal property used primarily in storing,
holding, or delivering solutions or chemicals used in well
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stimulation as defined in section 1509.01 of the Revised Code;
(III) Tangible personal property used primarily in
preparing, installing, or reclaiming foundations for drilling or
pumping equipment or well stimulation material tanks;
(IV) Tangible personal property used primarily in
transporting, delivering, or removing equipment to or from the
well site or storing such equipment before its use at the well
site;
(V) Tangible personal property used primarily in gathering
operations occurring off the well site, including gathering
pipelines transporting hydrocarbon gas or liquids away from a
crude oil or natural gas production facility;
(VI) Tangible personal property that is to be incorporated
into a structure or improvement to real property;
(VII) Well site fencing, lighting, or security systems;
(VIII) Communication devices or services;
(IX) Office supplies;
(X) Trailers used as offices or lodging;
(XI) Motor vehicles of any kind;
(XII) Tangible personal property used primarily for the
storage of drilling byproducts and fuel not used for production;
(XIII) Tangible personal property used primarily as a
safety device;
(XIV) Data collection or monitoring devices;
(XV) Access ladders, stairs, or platforms attached to
storage tanks.
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The enumeration of tangible personal property in division
(B)(42)(q)(ii) of this section is not intended to be exhaustive,
and any tangible personal property not so enumerated shall not
necessarily be construed to be a "thing transferred" for the
purposes of division (B)(42)(q) of this section.
The commissioner shall adopt and promulgate rules under
sections 119.01 to 119.13 of the Revised Code that the
commissioner deems necessary to administer division (B)(42)(q)
of this section.
As used in division (B)(42) of this section, "thing"
includes all transactions included in divisions (B)(3)(a), (b),
and (e) of section 5739.01 of the Revised Code.
(43) Sales conducted through a coin operated device that
activates vacuum equipment or equipment that dispenses water,
whether or not in combination with soap or other cleaning agents
or wax, to the consumer for the consumer's use on the premises
in washing, cleaning, or waxing a motor vehicle, provided no
other personal property or personal service is provided as part
of the transaction.
(44) Sales of replacement and modification parts for
engines, airframes, instruments, and interiors in, and paint
for, aircraft used primarily in a fractional aircraft ownership
program, and sales of services for the repair, modification, and
maintenance of such aircraft, and machinery, equipment, and
supplies primarily used to provide those services.
(45) Sales of telecommunications service that is used
directly and primarily to perform the functions of a call
center. As used in this division, "call center" means any
physical location where telephone calls are placed or received
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in high volume for the purpose of making sales, marketing,
customer service, technical support, or other specialized
business activity, and that employs at least fifty individuals
that engage in call center activities on a full-time basis, or
sufficient individuals to fill fifty full-time equivalent
positions.
(46) Sales by a telecommunications service vendor of 900
service to a subscriber. This division does not apply to
information services.
(47) Sales of value-added non-voice data service. This
division does not apply to any similar service that is not
otherwise a telecommunications service.
(48) Sales of feminine hygiene products.
(49) Sales of materials, parts, equipment, or engines used
in the repair or maintenance of aircraft or avionics systems of
such aircraft, and sales of repair, remodeling, replacement, or
maintenance services in this state performed on aircraft or on
an aircraft's avionics, engine, or component materials or parts.
As used in division (B)(49) of this section, "aircraft" means
aircraft of more than six thousand pounds maximum certified
takeoff weight or used exclusively in general aviation.
(50) Sales of full flight simulators that are used for
pilot or flight-crew training, sales of repair or replacement
parts or components, and sales of repair or maintenance services
for such full flight simulators. "Full flight simulator" means a
replica of a specific type, or make, model, and series of
aircraft cockpit. It includes the assemblage of equipment and
computer programs necessary to represent aircraft operations in
ground and flight conditions, a visual system providing an out-
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of-the-cockpit view, and a system that provides cues at least
equivalent to those of a three-degree-of-freedom motion system,
and has the full range of capabilities of the systems installed
in the device as described in appendices A and B of part 60 of
chapter 1 of title 14 of the Code of Federal Regulations.
(51) Any transfer or lease of tangible personal property
between the state and JobsOhio in accordance with section
4313.02 of the Revised Code.
(52)(a) Sales to a qualifying corporation.
(b) As used in division (B)(52) of this section:
(i) "Qualifying corporation" means a nonprofit corporation
organized in this state that leases from an eligible county
land, buildings, structures, fixtures, and improvements to the
land that are part of or used in a public recreational facility
used by a major league professional athletic team or a class A
to class AAA minor league affiliate of a major league
professional athletic team for a significant portion of the
team's home schedule, provided the following apply:
(I) The facility is leased from the eligible county
pursuant to a lease that requires substantially all of the
revenue from the operation of the business or activity conducted
by the nonprofit corporation at the facility in excess of
operating costs, capital expenditures, and reserves to be paid
to the eligible county at least once per calendar year.
(II) Upon dissolution and liquidation of the nonprofit
corporation, all of its net assets are distributable to the
board of commissioners of the eligible county from which the
corporation leases the facility.
(ii) "Eligible county" has the same meaning as in section
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307.695 of the Revised Code.
(53) Sales to or by a cable service provider, video
service provider, or radio or television broadcast station
regulated by the federal government of cable service or
programming, video service or programming, audio service or
programming, or electronically transferred digital audiovisual
or audio work. As used in division (B)(53) of this section,
"cable service" and "cable service provider" have the same
meanings as in section 1332.01 of the Revised Code, and "video
service," "video service provider," and "video programming" have
the same meanings as in section 1332.21 of the Revised Code.
(54) Sales of a digital audio work electronically
transferred for delivery through use of a machine, such as a
juke box, that does all of the following:
(a) Accepts direct payments to operate;
(b) Automatically plays a selected digital audio work for
a single play upon receipt of a payment described in division
(B)(54)(a) of this section;
(c) Operates exclusively for the purpose of playing
digital audio works in a commercial establishment.
(55)(a) Sales of the following occurring on the first
Friday of August and the following Saturday and Sunday of any
year, except in 2024 or any subsequent year in which a sales tax
holiday is held pursuant to section 5739.41 of the Revised Code:
(i) An item of clothing, the price of which is seventy-
five dollars or less;
(ii) An item of school supplies, the price of which is
twenty dollars or less;
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(iii) An item of school instructional material, the price
of which is twenty dollars or less.
(b) As used in division (B)(55) of this section:
(i) "Clothing" means all human wearing apparel suitable
for general use. "Clothing" includes, but is not limited to,
aprons, household and shop; athletic supporters; baby receiving
blankets; bathing suits and caps; beach capes and coats; belts
and suspenders; boots; coats and jackets; costumes; diapers,
children and adult, including disposable diapers; earmuffs;
footlets; formal wear; garters and garter belts; girdles; gloves
and mittens for general use; hats and caps; hosiery; insoles for
shoes; lab coats; neckties; overshoes; pantyhose; rainwear;
rubber pants; sandals; scarves; shoes and shoe laces; slippers;
sneakers; socks and stockings; steel-toed shoes; underwear;
uniforms, athletic and nonathletic; and wedding apparel.
"Clothing" does not include items purchased for use in a trade
or business; clothing accessories or equipment; protective
equipment; sports or recreational equipment; belt buckles sold
separately; costume masks sold separately; patches and emblems
sold separately; sewing equipment and supplies including, but
not limited to, knitting needles, patterns, pins, scissors,
sewing machines, sewing needles, tape measures, and thimbles;
and sewing materials that become part of "clothing" including,
but not limited to, buttons, fabric, lace, thread, yarn, and
zippers.
(ii) "School supplies" means items commonly used by a
student in a course of study. "School supplies" includes only
the following items: binders; book bags; calculators; cellophane
tape; blackboard chalk; compasses; composition books; crayons;
erasers; folders, expandable, pocket, plastic, and manila; glue,
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paste, and paste sticks; highlighters; index cards; index card
boxes; legal pads; lunch boxes; markers; notebooks; paper,
loose-leaf ruled notebook paper, copy paper, graph paper,
tracing paper, manila paper, colored paper, poster board, and
construction paper; pencil boxes and other school supply boxes;
pencil sharpeners; pencils; pens; protractors; rulers; scissors;
and writing tablets. "School supplies" does not include any item
purchased for use in a trade or business.
(iii) "School instructional material" means written
material commonly used by a student in a course of study as a
reference and to learn the subject being taught. "School
instructional material" includes only the following items:
reference books, reference maps and globes, textbooks, and
workbooks. "School instructional material" does not include any
material purchased for use in a trade or business.
(56)(a) Sales of adult diapers or incontinence underpads
sold pursuant to a prescription, for the benefit of a medicaid
recipient with a diagnosis of incontinence, and by a medicaid
provider that maintains a valid provider agreement under section
5164.30 of the Revised Code with the department of medicaid,
provided that the medicaid program covers diapers or
incontinence underpads as an incontinence garment.
(b) As used in division (B)(56)(a) of this section,
"incontinence underpad" means an absorbent product, not worn on
the body, designed to protect furniture or other tangible
personal property from soiling or damage due to human
incontinence.
(57) Sales of investment metal bullion and investment
coins. "Investment metal bullion" means any bullion described in
section 408(m)(3)(B) of the Internal Revenue Code, regardless of
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As Introduced
whether that bullion is in the physical possession of a trustee.
"Investment coin" means any coin composed primarily of gold,
silver, platinum, or palladium.
(58) Sales of tangible personal property used primarily
for any of the following purposes by a megaproject operator at
the site of a megaproject that satisfies the criteria described
in division (A)(11)(a)(ii) of section 122.17 of the Revised
Code, provided that the sale occurs during the period that the
megaproject operator has an agreement for such megaproject with
the tax credit authority under division (D) of section 122.17 of
the Revised Code that remains in effect and has not expired or
been terminated:
(a) To store, transmit, convey, distribute, recycle,
circulate, or clean water, steam, or other gases used in or
produced as a result of manufacturing activity, including items
that support or aid in the operation of such property;
(b) To clean or prepare inventory, at any stage of storage
or production, or equipment used in a manufacturing activity,
including chemicals, solvents, catalysts, soaps, and other items
that support or aid in the operation of property;
(c) To regulate, treat, filter, condition, improve, clean,
maintain, or monitor environmental conditions within areas where
manufacturing activities take place;
(d) To handle, transport, or convey inventory during
production or manufacturing.
(59) Documentary services charges imposed pursuant to
section 4517.261 or 4781.24 of the Revised Code.
(60) Sales of children's diapers.
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(61) Sales of therapeutic or preventative creams and wipes
marketed primarily for use on the skin of children.
(62) Sales of a child restraint device or booster seat
that meets the national highway traffic safety administration
standard for child restraint systems under 49 C.F.R. 571.213.
(63) Sales of cribs intended to provide sleeping
accommodations for children that comply with the United States
consumer product safety commission's safety standard for full-
size baby cribs under 16 C.F.R. 1219 or the commission's safety
standard for non-full-size baby cribs under 16 C.F.R. 1220.
(64) Sales of strollers meant for transporting children
from infancy to about thirty-six months of age that meet the
United States consumer product safety commission safety standard
for carriages and strollers under 16 C.F.R. 1227.2.
(65) The fee imposed by section 3743.22 of the Revised
Code, if it is separately stated on the invoice, bill of sale,
or similar document given by the vendor to the consumer for a
retail sale made in this state.
(66) Sales of eligible tangible personal property
occurring during the period of a sales tax holiday held pursuant
to section 5739.41 of the Revised Code.
(67)(a) Sales of tangible personal property to a
qualifying business used primarily by that business for any of
the following:
(i) Transporting completed products from the manufacturing
facility in which those products were manufactured to a
destination from which the product will be sold at retail or a
destination designated by the consumer to which those products
were sold at retail;
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As Introduced
(ii) Transporting general merchandise or grocery products
from one location within a distribution facility to another
location from which the merchandise or products will be
transported from that facility;
(iii) Powering or charging tangible personal property used
as described in division (B)(67)(a)(i) or (ii) of this section.
(b) As used in division (B)(67) of this section:
(i) "Qualifying business" means a person that is
classified as being in the transportation and warehousing sector
or the warehouse club and supercenter sector by the north
American industry classification system, or a person in that
person's affiliated group, and that person or affiliate is
engaged in transporting tangible personal property in trucks
operated and either owned or leased by the person or affiliate
to destinations outside this state.
(ii) "Truck" means any motor vehicle that has motor power
and is designed and used for carrying merchandise or freight, or
that is used as a commercial tractor. "Truck" includes a motor
vehicle powered by one or more alternative fuels provided it is
designed and used as described in this division.
(iii) "Completed product" and "manufacturing facility"
have the same meanings as in section 5739.011 of the Revised
Code.
(iv) "Alternative fuel" has the same meaning as in section
125.831 of the Revised Code.
(v) "Motor vehicle" and "commercial tractor" have the same
meanings as in section 4501.01 of the Revised Code.
(vi) "Affiliated group" has the same meaning as in
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929 S. B. No. 126 Page 33
As Introduced
division (B)(3)(e) of section 5739.01 of the Revised Code.
(C) For the purpose of the proper administration of this
chapter, and to prevent the evasion of the tax, it is presumed
that all sales made in this state are subject to the tax until
the contrary is established.
(D) The tax collected by the vendor from the consumer
under this chapter is not part of the price, but is a tax
collection for the benefit of the state, and of counties levying
an additional sales tax pursuant to section 5739.021 or 5739.026
of the Revised Code and of transit authorities levying an
additional sales tax pursuant to section 5739.023 of the Revised
Code. Except for the discount authorized under section 5739.12
of the Revised Code and the effects of any rounding pursuant to
section 5703.055 of the Revised Code, no person other than the
state or such a county or transit authority shall derive any
benefit from the collection or payment of the tax levied by this
section or section 5739.021, 5739.023, or 5739.026 of the
Revised Code.
Section 2. That existing section 5739.02 of the Revised
Code is hereby repealed.
Section 3. The amendment by this act of section 5739.02 of
the Revised Code applies on and after the first day of the first
month following the effective date of this section.
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