As Introduced
136th General Assembly
Regular Session S. B. No. 186
2025-2026
Senator Smith
To amend section 5739.21 and to enact section
122.97 of the Revised Code to create a music
incubator program to provide sales tax rebates
to certain music venues and festival promoters.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 5739.21 be amended and section
122.97 of the Revised Code be enacted to read as follows:
Sec. 122.97. (A) As used in this section:
(1) "Eligible music venue or festival promoter" means a
music venue or music festival promoter that has met all of the
following conditions for at least the two years immediately
preceding the date the person submits an application under
division (B) of this section:
(a) The venue or promoter has held a vendor's license
issued under section 5739.17 of the Revised Code.
(b) In the case of a music venue, the venue has been a
retail establishment with a dedicated audience capacity of not
more than three thousand individuals.
(c) In the case of a music festival promoter, the promoter
has held a music festival in a county with a population of less
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than one hundred thousand.
(d) The venue or promoter has entered into a written
contract with a musical performing artist to conduct a live
performance at the venue or festival, as applicable, under which
the artist received as compensation a specified percentage of
ticket sales for or other sales during the performance, or a
guaranteed amount in advance of the performance.
(e) The venue or promoter has met at least five of the
following criteria, including at least one of the criteria
described in division (A)(1)(e)(i) or (ii) of this section:
(i) Has marketed live performances through listings in
printed or electronic publications;
(ii) Has provided live music performances five or more
nights per week;
(iii) Has employed or contracted for one or more
individuals to perform at least two of the following services:
sound engineering, booking, promoting, stage management, or
security;
(iv) Has live performance and audience space;
(v) Has provided technical sound and lighting support,
either in-house or through a contract with a third party;
(vi) Has a space for the storage of audio equipment or
musical instruments;
(vii) Has applied cover charges to one or more live music
performances through ticketing or the imposition of an entrance
fee;
(viii) Has maintained hours of operation that coincide
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with live music performance show times.
(2) "State sales tax" means the tax imposed by section
5739.02 of the Revised Code.
(3) "Beer" and "wine" have the same meanings as in section
4301.01 of the Revised Code.
(B) An eligible music venue or festival promoter may apply
to the director of development for a rebate under this section.
The director shall prescribe the form and manner of the
application, which shall include allowing applicants to submit
applications by electronic mail or by uploading the application
to a designated department web site.
The director shall accept applications beginning on the
first day of September of each year, beginning in 2026. The
director shall review applications in the order in which the
applications are received and shall make a determination on each
application within thirty days after its receipt. The director
shall approve an application if the director determines that the
applicant is an eligible music venue or festival promoter that,
in either case, provides or has committed to provide an economic
benefit to the communities in which the music venues are located
or the festivals are held, as applicable, and to the music
industry in the state, including live music performers.
(C) Subject to division (D) of this section, if the
director determines that an eligible music venue or festival
promoter qualifies for a rebate under this section, the amount
of the rebate shall equal the lesser of the following:
(1) The amount of state sales taxes attributable to the
sale of beer and wine remitted to the state by the eligible
music venue or festival promoter during the preceding fiscal
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year;
(2) One hundred thousand dollars.
(D) The total amount of rebates awarded under this section
for a single fiscal year shall not exceed ten million dollars.
(E) Eligible music venues and festival promoters shall use
any rebate received under this section to recruit performing
artists and bring live musical performances to the state. A
venue or promoter receiving a rebate shall provide to the
director of development any receipts, invoices, or similar
documents demonstrating that the venue or promoter used the
rebate for these purposes. The director may require the venue or
promoter to repay all or part of the rebate if the venue or
promoter fails to provide such documentation or if the director
determines that the venue or promoter spent the rebate for any
other purpose.
(F) The music incubator rebate fund is created in the
state treasury, consisting of money deposited into it under
section 5739.21 of the Revised Code. Money in the fund shall be
used solely in accordance with this section to award rebates to
eligible music venues and festival promoters. All interest
earned on money in the fund shall be credited to the fund.
On the last day of each fiscal year, the director of
budget and management shall transfer any money deposited into
the fund under section 5739.21 of the Revised Code that is
unobligated and unexpended on that date to the general revenue
fund.
Sec. 5739.21. (A) One (A)(1) Beginning in fiscal year
2027, the first ten million dollars deposited into the state
treasury under sections 5739.01 to 5739.31 of the Revised Code
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in each fiscal year shall be credited to the music incubator
rebate fund created in section 122.97 of the Revised Code.
(2) After crediting the amount required in division (A)(1)
of this section, one hundred per cent of all money deposited
into the state treasury under sections 5739.01 to 5739.31 of the
Revised Code that is not required to be distributed as provided
in section 5739.102 of the Revised Code or division (B) of this
section shall be credited to the general revenue fund.
(B)(1) In any case where any county or transit authority
has levied a tax or taxes pursuant to section 5739.021,
5739.023, or 5739.026 of the Revised Code, the tax commissioner
shall, within forty-five days after the end of each month,
determine and certify to the director of budget and management
the amount of the proceeds of such tax or taxes received during
that month from billings and assessments, or associated with tax
returns or reports filed during that month, to be returned to
the county or transit authority levying the tax or taxes. The
amount to be returned to each county and transit authority shall
be a fraction of the aggregate amount of money collected with
respect to each area in which one or more of such taxes are
concurrently in effect with the tax levied by section 5739.02 of
the Revised Code. The numerator of the fraction is the rate of
the tax levied by the county or transit authority and the
denominator of the fraction is the aggregate rate of such taxes
applicable to such area. The amount to be returned to each
county or transit authority shall be reduced by the amount of
any refunds of county or transit authority tax paid pursuant to
section 5739.07 of the Revised Code during the same month, or
transfers made pursuant to division (B)(2) of section 5703.052
of the Revised Code.
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(2) On a periodic basis, using the best information
available, the tax commissioner shall distribute any amount of a
county or transit authority tax that cannot be distributed under
division (B)(1) of this section. Through audit or other means,
the commissioner shall attempt to obtain the information
necessary to make the distribution as provided under that
division and, on receipt of that information, shall make
adjustments to distributions previously made under this
division.
(3) Eight and thirty-three one-hundredths of one per cent
of the revenue collected from the tax due under division (A) of
section 5739.029 of the Revised Code shall be distributed to the
county where the sale of the motor vehicle is sitused under
section 5739.033 of the Revised Code. The amount to be so
distributed to the county shall be apportioned on the basis of
the rates of taxes the county levies pursuant to sections
5739.021 and 5739.026 of the Revised Code, as applicable, and
shall be credited to the funds of the county as provided in
divisions (A) and (B) of section 5739.211 of the Revised Code.
(C) The aggregate amount to be returned to any county or
transit authority shall be reduced by one per cent, which shall
be certified directly to the credit of the local sales tax
administrative fund, which is hereby created in the state
treasury. For the purpose of determining the amount to be
returned to a county and transit authority in which the rate of
tax imposed by the transit authority has been reduced under
section 5739.028 of the Revised Code, the tax commissioner shall
use the respective rates of tax imposed by the county or transit
authority that results from the change in the rates authorized
under that section.
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(D) The director of budget and management shall transfer,
from the same funds and in the same proportions specified in
division (A) of this section, to the permissive tax distribution
fund created by division (B)(1) of section 4301.423 of the
Revised Code and to the local sales tax administrative fund, the
amounts certified by the tax commissioner. The tax commissioner
shall then, on or before the twentieth day of the month in which
such certification is made, provide for payment of such
respective amounts to the county treasurer and to the fiscal
officer of the transit authority levying the tax or taxes. The
amount transferred to the local sales tax administrative fund is
for use by the tax commissioner in defraying costs incurred in
administering such taxes levied by a county or transit
authority.
Section 2. That existing section 5739.21 of the Revised
Code is hereby repealed.
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