Exempt from sales and use tax certain logistics business items

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 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 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 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 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 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;

(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 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 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
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, 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 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, 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 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 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;

(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 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.

(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 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 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 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 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 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.

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 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-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
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;

(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, 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 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.

(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;

(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 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.