HB 147: Exempt from sales and use tax certain port authority materials

As Introduced

136th General Assembly Regular Session 2025-2026

H. B. No. 147

Representative Lorenz

A B I L L

To amend sections 5739.02 and 5739.03 of the 1
Revised Code to exempt from sales and use tax 2
building materials sold to a contractor under a 3
contract valued at $\$25$ million or more for 4
projects in areas with a port authority. 5

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

Section 1. That sections 5739.02 and 5739.03 of the 6
Revised Code be amended to read as follows: 7
Sec. 5739.02. For the purpose of providing revenue with 8
which to meet the needs of the state, for the use of the general 9
revenue fund of the state, for the purpose of securing a 10
thorough and efficient system of common schools throughout the 11
state, for the purpose of affording revenues, in addition to 12
those from general property taxes, permitted under 13
constitutional limitations, and from other sources, for the 14
support of local governmental functions, and for the purpose of 15
reimbursing the state for the expense of administering this 16
chapter, an excise tax is hereby levied on each retail sale made 17
in this state. 18

(A)(1) The tax shall be collected as provided in section 19

H. B. No. 147 As Introduced

5739.025 of the Revised Code. The rate of the tax shall be five 20
and three-fourths per cent. The tax applies and is collectible 21
when the sale is made, regardless of the time when the price is 22
paid or delivered. 23
(2) In the case of the lease or rental, with a fixed term 24
of more than thirty days or an indefinite term with a minimum 25
period of more than thirty days, of any motor vehicles designed 26
by the manufacturer to carry a load of not more than one ton, 27
watercraft, outboard motor, or aircraft, or of any tangible 28
personal property, other than motor vehicles designed by the 29
manufacturer to carry a load of more than one ton, to be used by 30
the lessee or renter primarily for business purposes, the tax 31
shall be collected by the vendor at the time the lease or rental 32
is consummated and shall be calculated by the vendor on the 33
basis of the total amount to be paid by the lessee or renter 34
under the lease agreement. If the total amount of the 35
consideration for the lease or rental includes amounts that are 36
not calculated at the time the lease or rental is executed, the 37
tax shall be calculated and collected by the vendor at the time 38
such amounts are billed to the lessee or renter. In the case of 39
an open-end lease or rental, the tax shall be calculated by the 40
vendor on the basis of the total amount to be paid during the 41
initial fixed term of the lease or rental, and for each 42
subsequent renewal period as it comes due. As used in this 43
division, "motor vehicle" has the same meaning as in section 44
4501.01 of the Revised Code, and "watercraft" includes an 45
outdrive unit attached to the watercraft. 46
A lease with a renewal clause and a termination penalty or 47
similar provision that applies if the renewal clause is not 48
exercised is presumed to be a sham transaction. In such a case, 49
the tax shall be calculated and paid on the basis of the entire 50

H. B. No. 147 As Introduced

length of the lease period, including any renewal periods, until 51
the termination penalty or similar provision no longer applies. 52
The taxpayer shall bear the burden, by a preponderance of the 53
evidence, that the transaction or series of transactions is not 54
a sham transaction. 55
(3) Except as provided in division (A)(2) of this section, 56
in the case of a sale, the price of which consists in whole or 57
in part of the lease or rental of tangible personal property, 58
the tax shall be measured by the installments of that lease or 59
rental. 60
(4) In the case of a sale of a physical fitness facility 61
service or recreation and sports club service, the price of 62
which consists in whole or in part of a membership for the 63
receipt of the benefit of the service, the tax applicable to the 64
sale shall be measured by the installments thereof. 65

B) The tax does not apply to the following: 66

(1) Sales to the state or any of its political 67
subdivisions, or to any other state or its political 68
subdivisions if the laws of that state exempt from taxation 69
sales made to this state and its political subdivisions 70
including either of the following: 71
(a) Sales or rentals of tangible personal property by 72
construction contractors or subcontractors to provide temporary 73
traffic control or temporary structures, including material and 74
equipment used to comply with the Ohio manual of uniform traffic 75
control devices adopted pursuant to section 4511.09 of the 76
Revised Code, whereby the state or any of its political 77
subdivisions take title to, or permanent or temporary possession 78
of, such tangible personal property for use by the state or any 79

H. B. No. 147 As Introduced

of its political subdivisions, including for use by the general 80
public thereof; 81
(b) Sales of services by construction contractors or 82
subcontractors to provide temporary traffic control or 83
structures, including labor used to comply with the Ohio manual 84
of uniform traffic control devices adopted pursuant to section 85
4511.09 of the Revised Code, whereby the state or any of its 86
political subdivisions, including the general public thereof, 87
receive the benefit of such services. 88
As used in divisions (B)(1)(a) and (b) of this section, 89
"temporary structures" include temporary roads, bridges, drains, 90
and pavement. 91
(2) Sales of food for human consumption off the premises 92
where sold; 93
(3) Sales of food sold to students only in a cafeteria, 94
dormitory, fraternity, or sorority maintained in a private, 95
public, or parochial school, college, or university; 96
(4) Sales of newspapers and sales or transfers of 97
magazines distributed as controlled circulation publications; 98
(5) The furnishing, preparing, or serving of meals without 99
charge by an employer to an employee provided the employer 100
records the meals as part compensation for services performed or 101
work done; 102
(6)(a) Sales of motor fuel upon receipt, use, 103
distribution, or sale of which in this state a tax is imposed by 104
the law of this state, but this exemption shall not apply to the 105
sale of motor fuel on which a refund of the tax is allowable 106
under division (A) of section 5735.14 of the Revised Code; and 107
the tax commissioner may deduct the amount of tax levied by this 108

H. B. No. 147 As Introduced

section applicable to the price of motor fuel when granting a 109
refund of motor fuel tax pursuant to division (A) of section 110
5735.14 of the Revised Code and shall cause the amount deducted 111
to be paid into the general revenue fund of this state; 112
(b) Sales of motor fuel other than that described in 113
division (B)(6)(a) of this section and used for powering a 114
refrigeration unit on a vehicle other than one used primarily to 115
provide comfort to the operator or occupants of the vehicle. 116
(7) Sales of natural gas by a natural gas company or 117
municipal gas utility, of water by a water-works company, or of 118
steam by a heating company, if in each case the thing sold is 119
delivered to consumers through pipes or conduits, and all sales 120
of communications services by a telegraph company, all terms as 121
defined in section 5727.01 of the Revised Code, and sales of 122
electricity delivered through wires; 123
(8) Casual sales by a person, or auctioneer employed 124
directly by the person to conduct such sales, except as to such 125
sales of motor vehicles, watercraft or outboard motors required 126
to be titled under section 1548.06 of the Revised Code, 127
watercraft documented with the United States coast guard, 128
snowmobiles, and all-purpose vehicles as defined in section 129
4519.01 of the Revised Code; 130
(9)(a) Sales of services or tangible personal property, 131
other than motor vehicles, mobile homes, and manufactured homes, 132
by churches, organizations exempt from taxation under section 133
501(c)(3) of the Internal Revenue Code of 1986, or nonprofit 134
organizations operated exclusively for charitable purposes as 135
defined in division (B)(12) of this section, provided that the 136
number of days on which such tangible personal property or 137
services, other than items never subject to the tax, are sold 138

H. B. No. 147 As Introduced

does not exceed six in any calendar year, except as otherwise 139
provided in division (B)(9)(b) of this section. If the number of 140
days on which such sales are made exceeds six in any calendar 141
year, the church or organization shall be considered to be 142
engaged in business and all subsequent sales by it shall be 143
subject to the tax. In counting the number of days, all sales by 144
groups within a church or within an organization shall be 145
considered to be sales of that church or organization. 146
(b) The limitation on the number of days on which tax- 147
exempt sales may be made by a church or organization under 148
division (B)(9)(a) of this section does not apply to sales made 149
by student clubs and other groups of students of a primary or 150
secondary school, or a parent-teacher association, booster 151
group, or similar organization that raises money to support or 152
fund curricular or extracurricular activities of a primary or 153
secondary school. 154
(c) Divisions (B)(9)(a) and (b) of this section do not 155
apply to sales by a noncommercial educational radio or 156
television broadcasting station. 157
(10) Sales not within the taxing power of this state under 158
the Constitution or laws of the United States or the 159
Constitution of this state including either of the following: 160
(a) Sales or rentals of tangible personal property by 161
construction contractors or subcontractors to provide temporary 162
traffic control or temporary structures, including material and 163
equipment used to comply with the Ohio manual of uniform traffic 164
control devices adopted pursuant to section 4511.09 of the 165
Revised Code, whereby the United States takes title to, or 166
permanent or temporary possession of, such tangible personal 167
property for use by the United States including for use by the 168

H. B. No. 147 As Introduced

general public thereof; 169
(b) Sales of services by construction contractors or 170
subcontractors to provide temporary traffic control or 171
structures, including labor used to comply with the Ohio manual 172
of uniform traffic control devices adopted pursuant to section 173
4511.09 of the Revised Code, whereby the United States, 174
including the general public thereof, receives the benefit of 175
such services. 176
As used in divisions (B)(10)(a) and (b) of this section, 177
"temporary structures" include temporary roads, bridges, drains, 178
and pavement. 179
(11) Except for transactions that are sales under division 180
(B)(3)(p) of section 5739.01 of the Revised Code, the 181
transportation of persons or property, unless the transportation 182
is by a private investigation and security service; 183
(12) Sales of tangible personal property or services to 184
churches, to organizations exempt from taxation under section 185
501(c)(3) of the Internal Revenue Code of 1986, and to any other 186
nonprofit organizations operated exclusively for charitable 187
purposes in this state, no part of the net income of which 188
inures to the benefit of any private shareholder or individual, 189
and no substantial part of the activities of which consists of 190
carrying on propaganda or otherwise attempting to influence 191
legislation; sales to offices administering one or more homes 192
for the aged or one or more hospital facilities exempt under 193
section 140.08 of the Revised Code; and sales to organizations 194
described in division (D) of section 5709.12 of the Revised 195
Code. 196
"Charitable purposes" means the relief of poverty; the 197

H. B. No. 147 As Introduced

improvement of health through the alleviation of illness, 198
disease, or injury; the operation of an organization exclusively 199
for the provision of professional, laundry, printing, and 200
purchasing services to hospitals or charitable institutions; the 201
operation of a home for the aged, as defined in section 5701.13 202
of the Revised Code; the operation of a radio or television 203
broadcasting station that is licensed by the federal 204
communications commission as a noncommercial educational radio 205
or television station; the operation of a nonprofit animal 206
adoption service or a county humane society; the promotion of 207
education by an institution of learning that maintains a faculty 208
of qualified instructors, teaches regular continuous courses of 209
study, and confers a recognized diploma upon completion of a 210
specific curriculum; the operation of a parent-teacher 211
association, booster group, or similar organization primarily 212
engaged in the promotion and support of the curricular or 213
extracurricular activities of a primary or secondary school; the 214
operation of a community or area center in which presentations 215
in music, dramatics, the arts, and related fields are made in 216
order to foster public interest and education therein; the 217
production of performances in music, dramatics, and the arts; or 218
the promotion of education by an organization engaged in 219
carrying on research in, or the dissemination of, scientific and 220
technological knowledge and information primarily for the 221
public. 222
Nothing in this division shall be deemed to exempt sales 223
to any organization for use in the operation or carrying on of a 224
trade or business, or sales to a home for the aged for use in 225
the operation of independent living facilities as defined in 226
division (A) of section 5709.12 of the Revised Code. 227

(13) All of the following:

H. B. No. 147 As Introduced

(a) Building and construction materials and services sold 229
to construction contractors for incorporation into a structure 230
or improvement to real property under a construction contract 231
with this state or a political subdivision of this state, or 232
with the United States government or any of its agencies; 233
building 234

(b) 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

(c) Building and construction materials sold to 241
construction contractors for incorporation into a horticulture 242
structure or livestock structure for a person engaged in the 243
business of horticulture or producing livestock; building 244
materials and services sold to a construction contractor for 245
incorporation into a house of public worship or religious 246
education, or a building used exclusively for charitable 247
purposes under a construction contract with an organization 248
whose purpose is as described in division (B)(12) of this 249
section; building 250
(d) Building materials and services sold to a construction 251
contractor for incorporation into a building under a 252
construction contract with an organization exempt from taxation 253
under section 501(c)(3) of the Internal Revenue Code of 1986 254
when the building is to be used exclusively for the 255
organization's exempt purposes; tangible 256
(e) Tangible personal property sold for incorporation into 257
the construction of a sports facility under section 307.696 of 258

H. B. No. 147 As Introduced

the Revised Code; building 259

(f） Building_and construction materials and services sold 260

261

property outside this state if such materials and services, when 262

sold to a construction contractor in the state in which the real 263

264

265

building 266

(g) Building_and construction materials for incorporation 267

268

agreement entered into under sections 5501.70 to 5501.83 of the 269

Revised Code; until 270

(h) Until_one calendar year after the construction of a 271

convention center that qualifies for property tax exemption 272

under section 5709.084 of the Revised Code is completed, 273

building and construction materials and services sold to a 274

construction contractor for incorporation into the real property 275

comprising that convention center; and building 276

(i） Building_and construction materials sold for 277

278

that is used primarily as, or primarily in support of,a 279

280

281

282

and located at the site of a megaproject that satisfies the

criteria described in division (A)(ll）(a)(ii）of section 122.17 283

of the Revised Code, provided that the sale occurs during the 284

285

286

287

288

H. B. No. 147 As Introduced

(j) Building and construction materials and services sold to construction contractors for incorporation into a structure or improvement to real property, located in a municipal corporation, township, county, or combination thereof that has established a port authority under section 4582.02 of the Revised Code or which is included in a port authority in existence on December 16, 1964, under a construction contract requiring the property owner to pay at least twenty-five million dollars, provided the property owner is also bound by a separate agreement to finance, help finance, or otherwise cause to be completed public infrastructure improvements in the area surrounding the real property.

(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, 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,

H. B. No. 147 As Introduced

but does not include motor vehicles or bulk tanks, trailers, or 320
similar devices attached to motor vehicles. "Packaging" means 321
placing in a package. Division (B)(15) of this section does not 322
apply to persons engaged in highway transportation for hire. 323
(16) Sales of food to persons using supplemental nutrition 324
assistance program benefits to purchase the food. As used in 325
this division, "food" has the same meaning as in 7 U.S.C. 2012 326
and federal regulations adopted pursuant to the Food and 327
Nutrition Act of 2008. 328
(17) Sales to persons engaged in farming, agriculture, 329
horticulture, or floriculture, of tangible personal property for 330
use or consumption primarily in the production by farming, 331
agriculture, horticulture, or floriculture of other tangible 332
personal property for use or consumption primarily in the 333
production of tangible personal property for sale by farming, 334
agriculture, horticulture, or floriculture; or material and 335
parts for incorporation into any such tangible personal property 336
for use or consumption in production; and of tangible personal 337
property for such use or consumption in the conditioning or 338
holding of products produced by and for such use, consumption, 339
or sale by persons engaged in farming, agriculture, 340
horticulture, or floriculture, except where such property is 341
incorporated into real property; 342
(18) Sales of drugs for a human being that may be 343
dispensed only pursuant to a prescription; insulin as recognized 344
in the official United States pharmacopoeia; urine and blood 345
testing materials when used by diabetics or persons with 346
hypoglycemia to test for glucose or acetone; hypodermic syringes 347
and needles when used by diabetics for insulin injections; 348
epoetin alfa when purchased for use in the treatment of persons 349

H. B. No. 147 As Introduced

with medical disease; hospital beds when purchased by hospitals, 350
nursing homes, or other medical facilities; and medical oxygen 351
and medical oxygen-dispensing equipment when purchased by 352
hospitals, nursing homes, or other medical facilities; 353
(19) Sales of prosthetic devices, durable medical 354
equipment for home use, or mobility enhancing equipment, when 355
made pursuant to a prescription and when such devices or 356
equipment are for use by a human being. 357
(20) Sales of emergency and fire protection vehicles and 358
equipment to nonprofit organizations for use solely in providing 359
fire protection and emergency services, including trauma care 360
and emergency medical services, for political subdivisions of 361
the state; 362
(21) Sales of tangible personal property manufactured in 363
this state, if sold by the manufacturer in this state to a 364
retailer for use in the retail business of the retailer outside 365
of this state and if possession is taken from the manufacturer 366
by the purchaser within this state for the sole purpose of 367
immediately removing the same from this state in a vehicle owned 368
by the purchaser; 369
(22) Sales of services provided by the state or any of its 370
political subdivisions, agencies, instrumentalities, 371
institutions, or authorities, or by governmental entities of the 372
state or any of its political subdivisions, agencies, 373
instrumentalities, institutions, or authorities; 374
(23) Sales of motor vehicles to nonresidents of this state 375
under the circumstances described in division (B) of section 376
5739.029 of the Revised Code; 377

(24) Sales to persons engaged in the preparation of eggs 378

H. B. No. 147 As Introduced

for sale of tangible personal property used or consumed directly 379
in such preparation, including such tangible personal property 380
used for cleaning, sanitizing, preserving, grading, sorting, and 381
classifying by size; packages, including material and parts for 382
packages, and machinery, equipment, and material for use in 383
packaging eggs for sale; and handling and transportation 384
equipment and parts therefor, except motor vehicles licensed to 385
operate on public highways, used in intraplant or interplant 386
transfers or shipment of eggs in the process of preparation for 387
sale, when the plant or plants within or between which such 388
transfers or shipments occur are operated by the same person. 389
"Packages" includes containers, cases, baskets, flats, fillers, 390
filler flats, cartons, closure materials, labels, and labeling 391
materials, and "packaging" means placing therein. 392
(25)(a) Sales of water to a consumer for residential use; 393
(b) Sales of water by a nonprofit corporation engaged 394
exclusively in the treatment, distribution, and sale of water to 395
consumers, if such water is delivered to consumers through pipes 396
or tubing. 397
(26) Fees charged for inspection or reinspection of motor 398
vehicles under section 3704.14 of the Revised Code; 399
(27) Sales to persons licensed to conduct a food service 400
operation pursuant to section 3717.43 of the Revised Code, of 401
tangible personal property primarily used directly for the 402
following: 403
(a) To prepare food for human consumption for sale; 404
(b) To preserve food that has been or will be prepared for 405
human consumption for sale by the food service operator, not 406
including tangible personal property used to display food for 407

H. B. No. 147 As Introduced

selection by the consumer; 408
(c) To clean tangible personal property used to prepare or 409
serve food for human consumption for sale. 410
(28) Sales of animals by nonprofit animal adoption 411
services or county humane societies; 412
(29) Sales of services to a corporation described in 413
division (A) of section 5709.72 of the Revised Code, and sales 414
of tangible personal property that qualifies for exemption from 415
taxation under section 5709.72 of the Revised Code; 416
(30) Sales and installation of agricultural land tile, as 417
defined in division (B)(5)(a) of section 5739.01 of the Revised 418
Code; 419
(31) Sales and erection or installation of portable grain 420
bins, as defined in division (B)(5)(b) of section 5739.01 of the 421
Revised Code; 422
(32) The sale, lease, repair, and maintenance of, parts 423
for, or items attached to or incorporated in, motor vehicles 424
that are primarily used for transporting tangible personal 425
property belonging to others by a person engaged in highway 426
transportation for hire, except for packages and packaging used 427
for the transportation of tangible personal property; 428
(33) Sales to the state headquarters of any veterans' 429
organization in this state that is either incorporated and 430
issued a charter by the congress of the United States or is 431
recognized by the United States veterans administration, for use 432
by the headquarters; 433
(34) Sales to a telecommunications service vendor, mobile 434
telecommunications service vendor, or satellite broadcasting 435

H. B. No. 147 As Introduced

service vendor of tangible personal property and services used 436
directly and primarily in transmitting, receiving, switching, or 437
recording any interactive, one- or two-way electromagnetic 438
communications, including voice, image, data, and information, 439
through the use of any medium, including, but not limited to, 440
poles, wires, cables, switching equipment, computers, and record 441
storage devices and media, and component parts for the tangible 442
personal property. The exemption provided in this division shall 443
be in lieu of all other exemptions under division (B)(42)(a) or 444
(n) of this section to which the vendor may otherwise be 445
entitled, based upon the use of the thing purchased in providing 446
the telecommunications, mobile telecommunications, or satellite 447
broadcasting service. 448
(35)(a) Sales where the purpose of the consumer is to use 449
or consume the things transferred in making retail sales and 450
consisting of newspaper inserts, catalogues, coupons, flyers, 451
gift certificates, or other advertising material that prices and 452
describes tangible personal property offered for retail sale. 453
(b) Sales to direct marketing vendors of preliminary 454
materials such as photographs, artwork, and typesetting that 455
will be used in printing advertising material; and of printed 456
matter that offers free merchandise or chances to win sweepstake 457
prizes and that is mailed to potential customers with 458
advertising material described in division (B)(35)(a) of this 459
section; 460
(c) Sales of equipment such as telephones, computers, 461
facsimile machines, and similar tangible personal property 462
primarily used to accept orders for direct marketing retail 463
sales. 464
(d) Sales of automatic food vending machines that preserve 465

H. B. No. 147

AsIntroduced
food with a shelf life of forty-five days or less by		466
refrigeration and dispense it to the consumer.		467
	For purposes of division (B)(35） of this section, "direct	468
	marketing" means the method of selling where consumers order	469
	tangible personal property by United States mail, delivery	470
	service, or telecommunication and the vendor delivers or ships	471
		472
	warehouse, Catalogue distribution center, or similar fulfillment	473
	facility by means of the United States mail, delivery service,	474
or common carrier.		475
(36) Sales to a person engaged in the business of		476
horticulture or producing livestock of materials to be		477
	incorporated into a horticulture structure or livestock	478
structure;		479
	(37) Sales of personal computers, computer monitors,	480
computer keyboards, modems, and other peripheral computer		481
	equipment to an individual who is licensed or certified to teach	482
	in an elementary or a secondary school in this state for use by	483
		484
secondary school students;		485
required to be registered or licensed under the laws of this	(38) Sales of tangible personal property that is not	486 487
		488
	the United States, provided the property is delivered to a	489
	person in this state that is not a related member of the	490
	purchaser, is physically present in this state for the sole	491
	purpose of temporary storage and package consolidation, and is	492
	subsequently delivered to the purchaser at a delivery address in	493
	a foreign nation. As used in division (B)(38） of this section,	494
	"related member" has the same meaning as in section 5733.042 of	495

H. B. No. 147 As Introduced

the Revised Code, and "temporary storage" means the storage of 496
tangible personal property for a period of not more than sixty 497
days. 498

(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.

(41) Sales to a person providing services under division 521
(B)(3)(p) of section 5739.01 of the Revised Code of tangible 522
personal property and services used directly and primarily in 523
providing taxable services under that section. 524

(42) Sales where the purpose of the purchaser is to do any

H. B. No. 147 As Introduced

of the following: 526
(a) To incorporate the thing transferred as a material or 527
a part into tangible personal property to be produced for sale 528
by manufacturing, assembling, processing, or refining; or to use 529
or consume the thing transferred directly in producing tangible 530
personal property for sale by mining, including, without 531
limitation, the extraction from the earth of all substances that 532
are classed geologically as minerals, or directly in the 533
rendition of a public utility service, except that the sales tax 534
levied by this section shall be collected upon all meals, 535
drinks, and food for human consumption sold when transporting 536
persons. This paragraph does not exempt from "retail sale" or 537
"sales at retail" the sale of tangible personal property that is 538
to be incorporated into a structure or improvement to real 539
property. 540
(b) To hold the thing transferred as security for the 541
performance of an obligation of the vendor; 542
(c) To resell, hold, use, or consume the thing transferred 543
as evidence of a contract of insurance; 544
(d) To use or consume the thing directly in commercial 545
fishing; 546
(e) To incorporate the thing transferred as a material or 547
a part into, or to use or consume the thing transferred directly 548
in the production of, magazines distributed as controlled 549
circulation publications; 550
(f) To use or consume the thing transferred in the 551
production and preparation in suitable condition for market and 552
sale of printed, imprinted, overprinted, lithographic, 553
multilithic, blueprinted, photostatic, or other productions or 554

H. B. No. 147 As Introduced

eproductions of written or graphic matter; 555
(g) To use the thing transferred, as described in section 556
5739.011 of the Revised Code, primarily in a manufacturing 557
operation to produce tangible personal property for sale; 558
(h) To use the benefit of a warranty, maintenance or 559
service contract, or similar agreement, as described in division 560
(B)(7) of section 5739.01 of the Revised Code, to repair or 561
maintain tangible personal property, if all of the property that 562
is the subject of the warranty, contract, or agreement would not 563
be subject to the tax imposed by this section; 564
(i) To use the thing transferred as qualified research and 565
development equipment; 566
(j) To use or consume the thing transferred primarily in 567
storing, transporting, mailing, or otherwise handling purchased 568
sales inventory in a warehouse, distribution center, or similar 569
facility when the inventory is primarily distributed outside 570
this state to retail stores of the person who owns or controls 571
the warehouse, distribution center, or similar facility, to 572
retail stores of an affiliated group of which that person is a 573
member, or by means of direct marketing. This division does not 574
apply to motor vehicles registered for operation on the public 575
highways. As used in this division, "affiliated group" has the 576
same meaning as in division (B)(3)(e) of section 5739.01 of the 577
Revised Code and "direct marketing" has the same meaning as in 578
division (B)(35) of this section. 579
(k) To use or consume the thing transferred to fulfill a 580
contractual obligation incurred by a warrantor pursuant to a
581
warranty provided as a part of the price of the tangible 582
personal property sold or by a vendor of a warranty, maintenance 583

H. B. No. 147 As Introduced

or service contract, or similar agreement the provision of which 584
is defined as a sale under division (B)(7) of section 5739.01 of 585
the Revised Code; 586
(l) To use or consume the thing transferred in the 587
production of a newspaper for distribution to the public; 588
(m) To use tangible personal property to perform a service 589
listed in division (B)(3) of section 5739.01 of the Revised 590
Code, if the property is or is to be permanently transferred to 591
the consumer of the service as an integral part of the 592
performance of the service; 593

(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, 603
formatting, editing, storing, and disseminating data or 604
information by electronic publishing; 605

(p) To provide the thing transferred to the owner or lessee of a motor vehicle that is being repaired or serviced, if 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;

H. B. No. 147 As Introduced

(q) To use or consume the thing transferred directly in 613
production of crude oil and natural gas for sale. Persons 614
engaged in rendering production services for others are deemed 615
engaged in production. 616
As used in division (B)(42)(q) of this section, 617
"production" means operations and tangible personal property 618
directly used to expose and evaluate an underground reservoir 619
that may contain hydrocarbon resources, prepare the wellbore for 620
production, and lift and control all substances yielded by the 621
reservoir to the surface of the earth. 622
(i) For the purposes of division (B)(42)(q) of this 623
section, the "thing transferred" includes, but is not limited 624
to, any of the following: 625
(I) Services provided in the construction of permanent 626
access roads, services provided in the construction of the well 627
site, and services provided in the construction of temporary 628
impoundments; 629
(II) Equipment and rigging used for the specific purpose 630
of creating with integrity a wellbore pathway to underground 631
reservoirs; 632
(III) Drilling and workover services used to work within a 633
subsurface wellbore, and tangible personal property directly 634
used in providing such services; 635
(IV) Casing, tubulars, and float and centralizing 636
equipment; 637
(V) Trailers to which production equipment is attached; 638
(VI) Well completion services, including cementing of 639
casing, and tangible personal property directly used in 640

H. B. No. 147 Page 23 As Introduced

providing such services; 641

(VII) Wireline evaluation, mud logging, and perforation 642
services, and tangible personal property directly used in 643
providing such services; 644
(VIII) Reservoir stimulation, hydraulic fracturing, and 645
acidizing services, and tangible personal property directly used 646
in providing such services, including all material pumped 647
downhole; 648
(IX) Pressure pumping equipment; 649
(X) Artificial lift systems equipment; 650
(XI) Wellhead equipment and well site equipment used to 651
separate, stabilize, and control hydrocarbon phases and produced 652
water; 653
(XII) Tangible personal property directly used to control 654
production equipment. 655
(ii) For the purposes of division (B)(42)(q) of this 656
section, the "thing transferred" does not include any of the 657
following: 658
(I) Tangible personal property used primarily in the 659
exploration and production of any mineral resource regulated 660
under Chapter 1509. of the Revised Code other than oil or gas; 661
(II) Tangible personal property used primarily in storing, 662
holding, or delivering solutions or chemicals used in well 663
stimulation as defined in section 1509.01 of the Revised Code; 664
(III) Tangible personal property used primarily in 665
preparing, installing, or reclaiming foundations for drilling or 666
pumping equipment or well stimulation material tanks; 667

H. B. No. 147 As Introduced

(IV) Tangible personal property used primarily in 668
transporting, delivering, or removing equipment to or from the 669
well site or storing such equipment before its use at the well 670
site; 671
(V) Tangible personal property used primarily in gathering 672
operations occurring off the well site, including gathering 673
pipelines transporting hydrocarbon gas or liquids away from a 674
crude oil or natural gas production facility; 675
(VI) Tangible personal property that is to be incorporated 676
into a structure or improvement to real property; 677
(VII) Well site fencing, lighting, or security systems; 678
(VIII) Communication devices or services; 679
(IX) Office supplies; 680
(X) Trailers used as offices or lodging; 681
(XI) Motor vehicles of any kind; 682
(XII) Tangible personal property used primarily for the 683
storage of drilling byproducts and fuel not used for production; 684
(XIII) Tangible personal property used primarily as a 685
safety device; 686
(XIV) Data collection or monitoring devices; 687
(XV) Access ladders, stairs, or platforms attached to 688
storage tanks. 689
The enumeration of tangible personal property in division 690
(B)(42)(q)(ii) of this section is not intended to be exhaustive, 691
and any tangible personal property not so enumerated shall not 692
necessarily be construed to be a "thing transferred" for the 693
purposes of division (B)(42)(q) of this section. 694

H. B. No. 147 As Introduced

The commissioner shall adopt and promulgate rules under 695
sections 119.01 to 119.13 of the Revised Code that the 696
commissioner deems necessary to administer division (B)(42)(q) 697
of this section. 698
As used in division (B)(42) of this section, "thing" 699
includes all transactions included in divisions (B)(3)(a), (b), 700
and (e) of section 5739.01 of the Revised Code. 701
(43) Sales conducted through a coin operated device that 702
activates vacuum equipment or equipment that dispenses water, 703
whether or not in combination with soap or other cleaning agents 704
or wax, to the consumer for the consumer's use on the premises 705
in washing, cleaning, or waxing a motor vehicle, provided no 706
other personal property or personal service is provided as part 707
of the transaction. 708

(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 715
directly and primarily to perform the functions of a call 716
center. As used in this division, "call center" means any 717
physical location where telephone calls are placed or received 718
in high volume for the purpose of making sales, marketing, 719
customer service, technical support, or other specialized 720
business activity, and that employs at least fifty individuals 721
that engage in call center activities on a full-time basis, or 722
sufficient individuals to fill fifty full-time equivalent 723
positions. 724

H. B. No. 147 As Introduced

(46) Sales by a telecommunications service vendor of 900 725
service to a subscriber. This division does not apply to 726
information services. 727
(47) Sales of value-added non-voice data service. This 728
division does not apply to any similar service that is not 729
otherwise a telecommunications service. 730
(48) Sales of feminine hygiene products. 731
(49) Sales of materials, parts, equipment, or engines used 732
in the repair or maintenance of aircraft or avionics systems of 733
such aircraft, and sales of repair, remodeling, replacement, or 734
maintenance services in this state performed on aircraft or on 735
an aircraft's avionics, engine, or component materials or parts. 736
As used in division (B)(49) of this section, "aircraft" means 737
aircraft of more than six thousand pounds maximum certified 738
takeoff weight or used exclusively in general aviation. 739

(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 outof-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

H. B. No. 147 Page 27 As Introduced

between the state and JobsOhio in accordance with section 754
4313.02 of the Revised Code. 755
(52)(a) Sales to a qualifying corporation. 756
(b) As used in division (B)(52) of this section: 757
(i) "Qualifying corporation" means a nonprofit corporation 758
organized in this state that leases from an eligible county 759
land, buildings, structures, fixtures, and improvements to the 760
land that are part of or used in a public recreational facility 761
used by a major league professional athletic team or a class A 762
to class AAA minor league affiliate of a major league 763
professional athletic team for a significant portion of the 764
team's home schedule, provided the following apply: 765
(I) The facility is leased from the eligible county 766
pursuant to a lease that requires substantially all of the 767
revenue from the operation of the business or activity conducted 768
by the nonprofit corporation at the facility in excess of 769
operating costs, capital expenditures, and reserves to be paid 770
to the eligible county at least once per calendar year. 771
(II) Upon dissolution and liquidation of the nonprofit 772
corporation, all of its net assets are distributable to the 773
board of commissioners of the eligible county from which the 774
corporation leases the facility. 775
(ii) "Eligible county" has the same meaning as in section 776
307.695 of the Revised Code. 777
(53) Sales to or by a cable service provider, video 778
service provider, or radio or television broadcast station 779
regulated by the federal government of cable service or 780
programming, video service or programming, audio service or 781
programming, or electronically transferred digital audiovisual 782

H. B. No. 147 As Introduced

or audio work. As used in division (B)(53) of this section, 783
"cable service" and "cable service provider" have the same 784
meanings as in section 1332.01 of the Revised Code, and "video 785
service," "video service provider," and "video programming" have 786
the same meanings as in section 1332.21 of the Revised Code. 787
(54) Sales of a digital audio work electronically 788
transferred for delivery through use of a machine, such as a 789
juke box, that does all of the following: 790
(a) Accepts direct payments to operate; 791
(b) Automatically plays a selected digital audio work for 792
a single play upon receipt of a payment described in division 793
(B)(54)(a) of this section; 794
(c) Operates exclusively for the purpose of playing 795
digital audio works in a commercial establishment. 796
(55)(a) Sales of the following occurring on the first 797
Friday of August and the following Saturday and Sunday of any 798
year, except in 2024 or any subsequent year in which a sales tax 799
holiday is held pursuant to section 5739.41 of the Revised Code: 800
(i) An item of clothing, the price of which is seventy- 801
five dollars or less; 802
(ii) An item of school supplies, the price of which is 803
twenty dollars or less; 804
(iii) An item of school instructional material, the price 805
of which is twenty dollars or less. 806
(b) As used in division (B)(55) of this section: 807
(i) "Clothing" means all human wearing apparel suitable 808
for general use. "Clothing" includes, but is not limited to, 809

H. B. No. 147 As Introduced

aprons, household and shop; athletic supporters; baby receiving 810
blankets; bathing suits and caps; beach capes and coats; belts 811
and suspenders; boots; coats and jackets; costumes; diapers, 812
children and adult, including disposable diapers; earmuffs; 813
footlets; formal wear; garters and garter belts; girdles; gloves 814
and mittens for general use; hats and caps; hosiery; insoles for 815
shoes; lab coats; neckties; overshoes; pantyhose; rainwear; 816
rubber pants; sandals; scarves; shoes and shoe laces; slippers; 817
sneakers; socks and stockings; steel-toed shoes; underwear; 818
uniforms, athletic and nonathletic; and wedding apparel. 819
"Clothing" does not include items purchased for use in a trade 820
or business; clothing accessories or equipment; protective 821
equipment; sports or recreational equipment; belt buckles sold 822
separately; costume masks sold separately; patches and emblems 823
sold separately; sewing equipment and supplies including, but 824
not limited to, knitting needles, patterns, pins, scissors, 825
sewing machines, sewing needles, tape measures, and thimbles; 826
and sewing materials that become part of "clothing" including, 827
but not limited to, buttons, fabric, lace, thread, yarn, and 828
zippers. 829

(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, 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;

H. B. No. 147 As Introduced

and writing tablets. "School supplies" does not include any item 841
purchased for use in a trade or business. 842
(iii) "School instructional material" means written 843
material commonly used by a student in a course of study as a 844
reference and to learn the subject being taught. "School 845
instructional material" includes only the following items: 846
reference books, reference maps and globes, textbooks, and 847
workbooks. "School instructional material" does not include any 848
material purchased for use in a trade or business. 849
(56)(a) Sales of adult diapers or incontinence underpads 850
sold pursuant to a prescription, for the benefit of a medicaid 851
recipient with a diagnosis of incontinence, and by a medicaid 852
provider that maintains a valid provider agreement under section 853
5164.30 of the Revised Code with the department of medicaid, 854
provided that the medicaid program covers diapers or 855
incontinence underpads as an incontinence garment. 856
(b) As used in division (B)(56)(a) of this section, 857
"incontinence underpad" means an absorbent product, not worn on 858
the body, designed to protect furniture or other tangible 859
personal property from soiling or damage due to human 860
incontinence. 861
(57) Sales of investment metal bullion and investment 862
coins. "Investment metal bullion" means any bullion described in 863
section 408(m)(3)(B) of the Internal Revenue Code, regardless of 864
whether that bullion is in the physical possession of a trustee. 865
"Investment coin" means any coin composed primarily of gold, 866
silver, platinum, or palladium. 867
(58) Sales of tangible personal property used primarily 868
for any of the following purposes by a megaproject operator at 869

H. B. No. 147 As Introduced

the site of a megaproject that satisfies the criteria described 870
in division (A)(11)(a)(ii) of section 122.17 of the Revised 871
Code, provided that the sale occurs during the period that the 872
megaproject operator has an agreement for such megaproject with 873
the tax credit authority under division (D) of section 122.17 of 874
the Revised Code that remains in effect and has not expired or 875
been terminated: 876
(a) To store, transmit, convey, distribute, recycle, 877
circulate, or clean water, steam, or other gases used in or 878
produced as a result of manufacturing activity, including items 879
that support or aid in the operation of such property; 880
(b) To clean or prepare inventory, at any stage of storage 881
or production, or equipment used in a manufacturing activity, 882
including chemicals, solvents, catalysts, soaps, and other items 883
that support or aid in the operation of property; 884
(c) To regulate, treat, filter, condition, improve, clean, 885
maintain, or monitor environmental conditions within areas where 886
manufacturing activities take place; 887
(d) To handle, transport, or convey inventory during 888
production or manufacturing. 889
(59) Documentary services charges imposed pursuant to 890
section 4517.261 or 4781.24 of the Revised Code. 891
(60) Sales of children's diapers. 892
(61) Sales of therapeutic or preventative creams and wipes 893
marketed primarily for use on the skin of children. 894
(62) Sales of a child restraint device or booster seat 895
that meets the national highway traffic safety administration 896
standard for child restraint systems under 49 C.F.R. 571.213. 897

H. B. No. 147 As Introduced

(63) Sales of cribs intended to provide sleeping 898
accommodations for children that comply with the United States 899
consumer product safety commission's safety standard for full- 900
size baby cribs under 16 C.F.R. 1219 or the commission's safety 901
standard for non-full-size baby cribs under 16 C.F.R. 1220. 902
(64) Sales of strollers meant for transporting children 903
from infancy to about thirty-six months of age that meet the 904
United States consumer product safety commission safety standard 905
for carriages and strollers under 16 C.F.R. 1227.2. 906
(65) The fee imposed by section 3743.22 of the Revised 907
Code, if it is separately stated on the invoice, bill of sale, 908
or similar document given by the vendor to the consumer for a 909
retail sale made in this state. 910
(66) Sales of eligible tangible personal property 911
occurring during the period of a sales tax holiday held pursuant 912
to section 5739.41 of the Revised Code. 913
(C) For the purpose of the proper administration of this 914
chapter, and to prevent the evasion of the tax, it is presumed 915
that all sales made in this state are subject to the tax until 916
the contrary is established. 917
(D) The tax collected by the vendor from the consumer 918
under this chapter is not part of the price, but is a tax 919
collection for the benefit of the state, and of counties levying 920
an additional sales tax pursuant to section 5739.021 or 5739.026 921
of the Revised Code and of transit authorities levying an 922
additional sales tax pursuant to section 5739.023 of the Revised 923
Code. Except for the discount authorized under section 5739.12 924
of the Revised Code and the effects of any rounding pursuant to 925
section 5703.055 of the Revised Code, no person other than the 926

H. B. No. 147 As Introduced

state or such a county or transit authority shall derive any 927 a 928

section 0r section 5739.021， 5739.023， 0r 5739.026 of the 929

Revised Code. 930

Sec. 5739.03. (A) Except as provided in section 5739.05 or

931 so x 'o a o ' os

932

pursuant to section 5739.02， 5739.021， 5739.023, or 5739.026 of 933

the Revised Code shall be paid by the consumer to the vendor, 934

and each vendor shall collect from the consumer, as a trustee 935

for the state of Ohio, the full and exact amount of the tax 936 payable on each taxable sale, in the manner and at the times 937

provided as follows: 938

(l） If the price is， at or prior to the provision of the 939

service or the delivery of possession of the thing sold to the 940

941

consumer or the consumer's agent to the vendor or the vendor's 942

agent, the vendor or the vendor's agent shall collect the tax 943

with and at the same time as the price; 944

(2） If the price is otherwise paid or to be paid, the 945

vendor or the vendor's agent shall, at or prior to the provision 946

of the service or the delivery of possession of the thing sold 947

to the consumer， charge the tax imposed by or pursuant to 948

section 5739.02, 5739.021， 5739.023， 0r 5739.026 of the Revised 949

Code to the account of the consumer， which amount shall be 950

collected by the vendor from the consumer in addition to the 951

price. Such sale shall be reported on and the amount of the tax 952

applicable thereto shall be remitted with the return for the 953

period in which the sale is made, and the amount of the tax 954

o a o og 955

the consumer. 956

H. B. No. 147 As Introduced

(B)(1)(a) If any sale is claimed to be exempt under 957
division (E) of section 5739.01 of the Revised Code or under 958
section 5739.02 of the Revised Code, with the exception of 959
divisions (B)(1) to (11), (28), (48), (55), (59), or (66) of 960
section 5739.02 of the Revised Code, the consumer must provide 961
to the vendor, and the vendor must obtain from the consumer, a 962
certificate specifying the reason that the sale is not legally 963
subject to the tax. The certificate shall be in such form, and 964
shall be provided either in a hard copy form or electronic form, 965
as the tax commissioner prescribes. 966
(b) A vendor that obtains a fully completed exemption 967
certificate from a consumer is relieved of liability for 968
collecting and remitting tax on any sale covered by that 969
certificate. If it is determined the exemption was improperly 970
claimed, the consumer shall be liable for any tax due on that 971
sale under section 5739.02, 5739.021, 5739.023, or 5739.026 or 972
Chapter 5741. of the Revised Code. Relief under this division 973
from liability does not apply to any of the following: 974
(i) A vendor that fraudulently fails to collect tax; 975
(ii) A vendor that solicits consumers to participate in 976
the unlawful claim of an exemption; 977
(iii) A vendor that accepts an exemption certificate from 978
a consumer that claims an exemption based on who purchases or 979
who sells property or a service, when the subject of the 980
transaction sought to be covered by the exemption certificate is 981
actually received by the consumer at a location operated by the 982
vendor in this state, and this state has posted to its web site 983
an exemption certificate form that clearly and affirmatively 984
indicates that the claimed exemption is not available in this 985
state; 986

H. B. No. 147 As Introduced

(iv) A vendor that accepts an exemption certificate from a 987
consumer who claims a multiple points of use exemption under 988
division (D) of section 5739.033 of the Revised Code, if the 989
item purchased is tangible personal property, other than 990
prewritten computer software. 991

(2) The vendor shall maintain records, including exemption certificates, of all sales on which a consumer has claimed an exemption, and provide them to the tax commissioner on request.

(3) The tax commissioner may establish an identification system whereby the commissioner issues an identification number to a consumer that is exempt from payment of the tax. The consumer must present the number to the vendor, if any sale is claimed to be exempt as provided in this section.

(4) If no certificate is provided or obtained within ninety days after the date on which such sale is consummated, it shall be presumed that the tax applies. Failure to have so provided or obtained a certificate shall not preclude a vendor, within one hundred twenty days after the tax commissioner gives written notice of intent to levy an assessment, from either establishing that the sale is not subject to the tax, or obtaining, in good faith, a fully completed exemption certificate.

(5) Certificates need not be obtained nor provided where the identity of the consumer is such that the transaction is never subject to the tax imposed or where the item of tangible personal property sold or the service provided is never subject to the tax imposed, regardless of use, or when the sale is in interstate commerce.

(6) If a transaction is claimed to be exempt under

H. B. No. 147 As Introduced

	division (B)(13） of section 5739.02 of the Revised Code, the		1016
			1017
	from the contractee. This certification shall be in addition to		1018
	an exemption certificate provided by the contractor to the		1019
			1020
	division shall be deemed to be the consumer of all items		1021
		purchased by the contractor under the claim of exemption, if it	1022
			1023
	claimed. The certification shall be in such form as the tax		1024
	commissioner prescribes.		1025
		(7） If a transaction is claimed to be exempt under	1026
		division (B)(13)(B)(13)(e) of section 5739.02 of the Revised	1027
		Code, the person that leases a sports facility, as defined in	1028
		section 307.696 of the Revised Code, wholly owned by a county	1029
		may provide and sign, on behalf of the county， an exemption	1030
		certificate required under this section for that exemption.	1031
		s ooo 'ots a a r (	1032
		who seeks to enter or enters into a contract or agreement with a	1033
		contractor or vendor for the construction of real property or	1034
		for the sale and installation onto real property of tangible	1035
personal property.			1036
		Any contractor or vendor may request from any contractee a	1037
	certification of what portion of the property to be transferred		1038
	under such contract or agreement is to be incorporated into the		1039
	realty and what portion will retain its status as tangible		1040
	personal property after installation is completed. The		1041
	contractor or vendor shall request the certification by		1042
		certified mail delivered to the contractee, return receipt	1043
		requested. Upon receipt of such request and prior to entering	1044
		into the contract or agreement, the contractee shall provide to	1045

H. B. No. 147 As Introduced

the contractor or vendor a certification sufficiently detailed to enable the contractor or vendor to ascertain the resulting classification of all materials purchased or fabricated by the contractor or vendor and transferred to the contractee. This requirement applies to a contractee regardless of whether the contractee holds a direct payment permit under section 5739.031 of the Revised Code or provides to the contractor or vendor an exemption certificate as provided under this section.

For the purposes of the taxes levied by this chapter and Chapter 5741. of the Revised Code, the contractor or vendor may in good faith rely on the contractee's certification. Notwithstanding division (B) of section 5739.01 of the Revised Code, if the tax commissioner determines that certain property certified by the contractee as tangible personal property pursuant to this division is, in fact, real property, the contractee shall be considered to be the consumer of all materials so incorporated into that real property and shall be liable for the applicable tax, and the contractor or vendor shall be excused from any liability on those materials.

1046
1047
1048
1049
1050
1051
1052
1053
1054
1055
1056
1057
1058
1059
1060
1061
1062
1063
1064
1065
1066
1067
1068
1069
1070
1071
1072
1073
1074
1075
1076

If a contractee fails to provide such certification upon the request of the contractor or vendor, the contractor or vendor shall comply with the provisions of this chapter and Chapter 5741. of the Revised Code without the certification. If the tax commissioner determines that such compliance has been performed in good faith and that certain property treated as tangible personal property by the contractor or vendor is, in fact, real property, the contractee shall be considered to be the consumer of all materials so incorporated into that real property and shall be liable for the applicable tax, and the construction contractor or vendor shall be excused from any liability on those materials.

H. B. No. 147 As Introduced

This division does not apply to any contract or agreement 1077
where the tax commissioner determines as a fact that a 1078
certification under this division was made solely on the 1079
decision or advice of the contractor or vendor. 1080

(D) Notwithstanding division (B) of section 5739.01 of the Revised Code, whenever the total rate of tax imposed under this chapter is increased after the date after a construction contract is entered into, the contractee shall reimburse the construction contractor for any additional tax paid on tangible property consumed or services received pursuant to the contract.

(E) A vendor who files a petition for reassessment contesting the assessment of tax on sales for which the vendor obtained no valid exemption certificates and for which the vendor failed to establish that the sales were properly not subject to the tax during the one-hundred-twenty-day period allowed under division (B) of this section, may present to the tax commissioner additional evidence to prove that the sales were properly subject to a claim of exception or exemption. The vendor shall file such evidence within ninety days of the receipt by the vendor of the notice of assessment, except that, upon application and for reasonable cause, the period for submitting such evidence shall be extended thirty days.

The commissioner shall consider such additional evidence 1099
in reaching the final determination on the assessment and 1100
petition for reassessment. 1101
(F) Whenever a vendor refunds the price, minus any 1102
separately stated delivery charge, of an item of tangible 1103
personal property on which the tax imposed under this chapter 1104
has been paid, the vendor shall also refund the amount of tax 1105
paid, minus the amount of tax attributable to the delivery 1106

H. B. No. 147 As Introduced

charge. 1107
Section 2. That existing sections 5739.02 and 5739.03 of 1108
the Revised Code are hereby repealed. 1109
Section 3. The amendment by this act of sections 5739.02 1110
and 5739.03 of the Revised Code applies on and after the first 1111
day of the first month beginning after the effective date of 1112
this section. 1113