As Reported by the House Ways and Means Committee

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A BILL

To amend sections 5739.033, 5739.035, 5739.123, 5741.03, and 5741.05 and to enact section 5740.10 of the Revised Code to authorize retail vendors with annual delivery sales in Ohio of less than $500,000 to continue to use origin-based situsing rules for determining the appropriate sales tax jurisdiction in which a sale is taxable, to authorize all retail vendors currently using origin-based situsing to continue to do so if the Tax Commissioner determines that the Streamlined Sales and Use Tax Agreement does not allow origin-based situsing by vendors with delivery sales of less than $500,000, to authorize out-of-state sellers with annual delivery sales in Ohio of less than $500,000 to collect Ohio use taxes at a single uniform rate if the Commissioner makes that determination, and to provide for the distribution of use tax collected at a single uniform rate to counties and transit authorities.

Section 1. That sections 5739.033, 5739.035, 5739.123, 5741.03, and 5741.05 be amended and section 5740.10 of the Revised Code be enacted to read as follows:

Sec. 5739.033.  (A) Except as provided in division (B) of this section, divisions (C) to (I) of this section apply to sales made on and after May 1, 2006. Sales made before May 1, 2006, are subject to section 5739.035 of the Revised Code. On and after January 1, 2005, any January 1, 2008. Any vendor may irrevocably elect to comply with divisions (C) to (I) of this section for all of the vendor's sales and places of business in this state.

The amount of tax due pursuant to sections 5739.02, 5739.021, 5739.023, and 5739.026 of the Revised Code is the sum of the taxes imposed pursuant to those sections at the sourcing location of the sale as determined under this section or, if applicable, under division (C) of section 5739.031 or section 5739.034 of the Revised Code, or at the situs of the sale as determined under section 5739.035 of the Revised Code. This section applies only to a vendor's or seller's obligation to collect and remit sales taxes under section 5739.02, 5739.021, 5739.023, or 5739.026 of the Revised Code or use taxes under section 5741.02, 5741.021, 5741.022, or 5741.023 of the Revised Code. Division (A) of this section does not apply in determining the jurisdiction for which sellers are required to collect the use tax under section 5741.05 of the Revised Code. This section does not affect the obligation of a consumer to remit use taxes on the storage, use, or other consumption of tangible personal property or on the benefit realized of any service provided, to the jurisdiction of that storage, use, or consumption, or benefit realized.

(B)(1) As used in this division:

(a) "Delivery sale" means the taxable sale of tangible personal property or a service that is received by a consumer, or a donee designated by the consumer, in a taxing jurisdiction that is not the taxing jurisdiction in which the vendor has a fixed place of business.

(b) "Agreement" has the same meaning as in section 5740.01 of the Revised Code.

(c) "Governing board" has the same meaning as in section 5740.02 of the Revised Code.

(2)(a) A If the tax commissioner does not determine and certify under section 5740.10 of the Revised Code that the agreement allows a vendor with total annual delivery sales in this state of less than five hundred thousand dollars in calendar year 2007 and thereafter to situs its sales under section 5739.035 of the Revised Code, a vendor that is not required to situs sales under divisions (C) to (I) of this section on the date of the commissioner's certification may continue after that date to situs its sales under section 5739.035 of the Revised Code.

(3) If the tax commissioner makes the certification under section 5740.10 of the Revised Code, and except as otherwise provided in divisions (B)(4) and (5) of this section, a vendor with total delivery sales in calendar year 2005 that are 2007 and each calendar year thereafter of less than thirty million five hundred thousand dollars may continue to situs its sales under section 5739.035 of the Revised Code from May 1, 2006, through April 30, 2007, except that, if the tax commissioner does not enter a determination in the commissioner's journal under division (B)(2)(b) of this section, those dates shall be May 1, 2006, through December 31, 2007.

(b) On or before February 1, 2007, the tax commissioner shall determine whether certified service provider services are being provided by the governing board of the streamlined sales and use tax agreement for all delivery sales. If the commissioner determines that such services are being so provided, the commissioner shall enter the determination in the commissioner's journal and shall provide notice of the determination on the department of taxation's official internet web site. If the commissioner makes such an entry in the journal, then a vendor with total delivery sales in calendar year 2006 that are less than five million dollars may continue to situs its sales under section 5739.035 of the Revised Code from May 1, 2007, through December 31, 2007.

(3) Beginning January 1, 2008, all vendors shall source their sales under divisions (C) to (I) of this section.

(4) Once If the tax commissioner makes the determination and certification under section 5740.10 of the Revised Code, then, once a vendor has total delivery sales that exceed the dollar amount in division (B)(2)(a) or (b) of this section in this state of five hundred thousand dollars or more for a calendar year, the vendor shall source its sales under divisions (C) to (I) of this section and shall continue to source its sales under those divisions, regardless of the amount of the vendor's total delivery sales in future years.

(5) If a vendor permitted under division (B)(3) of this section to situs its sales under section 5739.035 of the Revised Code is required to provide the notices under division (I)(1) of that section but fails to provide the notices as required, the vendor shall situs all subsequent sales as required under divisions (C) to (I) of this section.

(C) Except for sales, other than leases, of titled motor vehicles, titled watercraft, or titled outboard motors as provided in section 5741.05 of the Revised Code, or as otherwise provided in this section and section 5739.034 of the Revised Code, all sales shall be sourced as follows:

(1) If the consumer or a donee designated by the consumer receives tangible personal property or a service at a vendor's place of business, the sale shall be sourced to that place of business.

(2) When the tangible personal property or service is not received at a vendor's place of business, the sale shall be sourced to the location known to the vendor where the consumer or the donee designated by the consumer receives the tangible personal property or service, including the location indicated by instructions for delivery to the consumer or the consumer's donee.

(3) If divisions (C)(1) and (2) of this section do not apply, the sale shall be sourced to the location indicated by an address for the consumer that is available from the vendor's business records that are maintained in the ordinary course of the vendor's business, when use of that address does not constitute bad faith.

(4) If divisions (C)(1), (2), and (3) of this section do not apply, the sale shall be sourced to the location indicated by an address for the consumer obtained during the consummation of the sale, including the address associated with the consumer's payment instrument, if no other address is available, when use of that address does not constitute bad faith.

(5) If divisions (C)(1), (2), (3), and (4) of this section do not apply, including in the circumstance where the vendor is without sufficient information to apply any of those divisions, the sale shall be sourced to the address from which tangible personal property was shipped, or from which the service was provided, disregarding any location that merely provided the electronic transfer of the property sold or service provided.

(6) As used in division (C) of this section, "receive" means taking possession of tangible personal property or making first use of a service. "Receive" does not include possession by a shipping company on behalf of a consumer.

(D)(1)(a) Notwithstanding divisions (C)(1) to (5) of this section, a business consumer that is not a holder of a direct payment permit granted under section 5739.031 of the Revised Code, that purchases a digital good, computer software, except computer software received in person by a business consumer at a vendor's place of business, or a service, and that knows at the time of purchase that such digital good, software, or service will be concurrently available for use in more than one taxing jurisdiction shall deliver to the vendor in conjunction with its purchase an exemption certificate claiming multiple points of use, or shall meet the requirements of division (D)(2) of this section. On receipt of the exemption certificate claiming multiple points of use, the vendor is relieved of its obligation to collect, pay, or remit the tax due, and the business consumer must pay the tax directly to the state.

(b) A business consumer that delivers the exemption certificate claiming multiple points of use to a vendor may use any reasonable, consistent, and uniform method of apportioning the tax due on the digital good, computer software, or service that is supported by the consumer's business records as they existed at the time of the sale. The business consumer shall report and pay the appropriate tax to each jurisdiction where concurrent use occurs. The tax due shall be calculated as if the apportioned amount of the digital good, computer software, or service had been delivered to each jurisdiction to which the sale is apportioned under this division.

(c) The exemption certificate claiming multiple points of use shall remain in effect for all future sales by the vendor to the business consumer until it is revoked in writing by the business consumer, except as to the business consumer's specific apportionment of a subsequent sale under division (D)(1)(b) of this section and the facts existing at the time of the sale.

(2) When the vendor knows that a digital good, computer software, or service sold will be concurrently available for use by the business consumer in more than one jurisdiction, but the business consumer does not provide an exemption certificate claiming multiple points of use as required by division (D)(1) of this section, the vendor may work with the business consumer to produce the correct apportionment. Governed by the principles of division (D)(1)(b) of this section, the vendor and business consumer may use any reasonable, but consistent and uniform, method of apportionment that is supported by the vendor's and business consumer's books and records as they exist at the time the sale is reported for purposes of the taxes levied under this chapter. If the business consumer certifies to the accuracy of the apportionment and the vendor accepts the certification, the vendor shall collect and remit the tax accordingly. In the absence of bad faith, the vendor is relieved of any further obligation to collect tax on any transaction where the vendor has collected tax pursuant to the information certified by the business consumer.

(3) When the vendor knows that the digital good, computer software, or service will be concurrently available for use in more than one jurisdiction, and the business consumer does not have a direct pay permit and does not provide to the vendor an exemption certificate claiming multiple points of use as required in division (D)(1) of this section, or certification pursuant to division (D)(2) of this section, the vendor shall collect and remit the tax based on division (C) of this section.

(4) Nothing in this section shall limit a person's obligation for sales or use tax to any state in which a digital good, computer software, or service is concurrently available for use, nor limit a person's ability under local, state, or federal law, to claim a credit for sales or use taxes legally due and paid to other jurisdictions.

(E) A person who holds a direct payment permit issued under section 5739.031 of the Revised Code is not required to deliver an exemption certificate claiming multiple points of use to a vendor. But such permit holder shall comply with division (D)(2) of this section in apportioning the tax due on a digital good, computer software, or a service for use in business that will be concurrently available for use in more than one taxing jurisdiction.

(F)(1) Notwithstanding divisions (C)(1) to (5) of this section, the consumer of direct mail that is not a holder of a direct payment permit shall provide to the vendor in conjunction with the sale either an exemption certificate claiming direct mail prescribed by the tax commissioner, or information to show the jurisdictions to which the direct mail is delivered to recipients.

(2) Upon receipt of such exemption certificate, the vendor is relieved of all obligations to collect, pay, or remit the applicable tax and the consumer is obligated to pay that tax on a direct pay basis. An exemption certificate claiming direct mail shall remain in effect for all future sales of direct mail by the vendor to the consumer until it is revoked in writing.

(3) Upon receipt of information from the consumer showing the jurisdictions to which the direct mail is delivered to recipients, the vendor shall collect the tax according to the delivery information provided by the consumer. In the absence of bad faith, the vendor is relieved of any further obligation to collect tax on any transaction where the vendor has collected tax pursuant to the delivery information provided by the consumer.

(4) If the consumer of direct mail does not have a direct payment permit and does not provide the vendor with either an exemption certificate claiming direct mail or delivery information as required by division (F)(1) of this section, the vendor shall collect the tax according to division (C)(5) of this section. Nothing in division (F)(4) of this section shall limit a consumer's obligation to pay sales or use tax to any state to which the direct mail is delivered.

(5) If a consumer of direct mail provides the vendor with documentation of direct payment authority, the consumer shall not be required to provide an exemption certificate claiming direct mail or delivery information to the vendor.

(G) If the vendor provides lodging to transient guests as specified in division (B)(2) of section 5739.01 of the Revised Code, the sale shall be sourced to the location where the lodging is located.

(H)(1) As used in this division and division (I) of this section, "transportation equipment" means any of the following:

(a) Locomotives and railcars that are utilized for the carriage of persons or property in interstate commerce.

(b) Trucks and truck-tractors with a gross vehicle weight rating of greater than ten thousand pounds, trailers, semi-trailers, or passenger buses that are registered through the international registration plan and are operated under authority of a carrier authorized and certificated by the United States department of transportation or another federal authority to engage in the carriage of persons or property in interstate commerce.

(c) Aircraft that are operated by air carriers authorized and certificated by the United States department of transportation or another federal authority to engage in the carriage of persons or property in interstate or foreign commerce.

(d) Containers designed for use on and component parts attached to or secured on the items set forth in division (H)(1)(a), (b), or (c) of this section.

(2) A sale, lease, or rental of transportation equipment shall be sourced pursuant to division (C) of this section.

(I)(1) A lease or rental of tangible personal property that does not require recurring periodic payments shall be sourced pursuant to division (C) of this section.

(2) A lease or rental of tangible personal property that requires recurring periodic payments shall be sourced as follows:

(a) In the case of a motor vehicle, other than a motor vehicle that is transportation equipment, or an aircraft, other than an aircraft that is transportation equipment, such lease or rental shall be sourced as follows:

(i) An accelerated tax payment on a lease or rental taxed pursuant to division (A)(2) of section 5739.02 of the Revised Code shall be sourced to the primary property location at the time the lease or rental is consummated. Any subsequent taxable charges on the lease or rental shall be sourced to the primary property location for the period in which the charges are incurred.

(ii) For a lease or rental taxed pursuant to division (A)(3) of section 5739.02 of the Revised Code, each lease or rental installment shall be sourced to the primary property location for the period covered by the installment.

(b) In the case of a lease or rental of all other tangible personal property, other than transportation equipment, such lease or rental shall be sourced as follows:

(i) An accelerated tax payment on a lease or rental that is taxed pursuant to division (A)(2) of section 5739.02 of the Revised Code shall be sourced pursuant to division (C) of this section at the time the lease or rental is consummated. Any subsequent taxable charges on the lease or rental shall be sourced to the primary property location for the period in which the charges are incurred.

(ii) For a lease or rental that is taxed pursuant to division (A)(3) of section 5739.02 of the Revised Code, the initial lease or rental installment shall be sourced pursuant to division (C) of this section. Each subsequent installment shall be sourced to the primary property location for the period covered by the installment.

(3) As used in division (I) of this section, "primary property location" means an address for tangible personal property provided by the lessee or renter that is available to the lessor or owner from its records maintained in the ordinary course of business, when use of that address does not constitute bad faith.

Sec. 5739.035. This section only applies to sales that are required to may be sitused under this section pursuant to division (A) or (B) of section 5739.033 of the Revised Code.

(A) Except as otherwise provided in this section, the situs of all sales is the vendor's place of business.

(1) If the consumer or the consumer's agent takes possession of the tangible personal property at a place of business of the vendor where the purchase contract or agreement was made, the situs of the sale is that place of business.

(2) If the consumer or the consumer's agent takes possession of the tangible personal property other than at a place of business of the vendor, or takes possession at a warehouse or similar facility of the vendor, the situs of the sale is the vendor's place of business where the purchase contract or agreement was made or the purchase order was received.

(3) If the vendor provides a service specified in division (B)(3)(a), (b), (c), (d), (n), (o), (q), (r), or (s) of section 5739.01 or makes a sale specified in division (B)(8) of section 5739.01 of the Revised Code, the situs of the sale is the vendor's place of business where the service is performed or the contract or agreement for the service was made or the purchase order was received.

(B) If the vendor is a transient vendor as specified in division (B) of section 5739.17 of the Revised Code, the situs of the sale is the vendor's temporary place of business or, if the transient vendor is the lessor of titled motor vehicles, titled watercraft, or titled outboard motors, at the location where the lessee keeps the leased property.

(C) If the vendor makes sales of tangible personal property from a stock of goods carried in a motor vehicle, from which the purchaser makes selection and takes possession, or from which the vendor sells tangible personal property the quantity of which has not been determined prior to the time the purchaser takes possession, the situs of the sale is the location of the motor vehicle when the sale is made.

(D) If the vendor is a delivery vendor as specified in division (D) of section 5739.17 of the Revised Code, the situs of the sale is the place where the tangible personal property is delivered, where the leased property is used, or where the service is performed or received.

(E) If the vendor provides a service specified in division (B)(3)(e), (g), (h), (j), (k), (l), (m), (p), or (t) of section 5739.01 of the Revised Code, the situs of the sale is the location of the consumer where the service is performed or received.

(F) If the vendor provides lodging to transient guests as specified in division (B)(2) of section 5739.01 of the Revised Code, the situs of the sale is the location where the lodging is located.

(G) If the vendor sells a warranty, maintenance or service contract, or similar agreement as specified in division (B)(7) of section 5739.01 of the Revised Code and the vendor is a delivery vendor, the situs of the sale is the location of the consumer. If the vendor is not a delivery vendor, the situs of the sale is the vendor's place of business where the contract or agreement was made, unless the warranty or contract is a component of the sale of a titled motor vehicle, titled watercraft, or titled outboard motor, in which case the situs of the sale is the county of titling.

(H) Except as otherwise provided in this division, if the vendor sells a prepaid authorization number or a prepaid telephone calling card, the situs of the sale is the vendor's place of business and shall be taxed at the time of sale. If the vendor sells a prepaid authorization number or prepaid telephone calling card through a telephone call, electronic commerce, or any other form of remote commerce, the situs of the sale is the consumer's shipping address, or, if there is no item shipped, at the consumer's billing address.

(I) Division (I) of this section applies only if the tax commissioner makes the certification under section 5740.10 of the Revised Code.

(1)(a) In each delivery sale by a vendor permitted to situs its sales under this section, the vendor shall clearly indicate on the invoice or other similar document provided to the purchaser at the time of the sale that the vendor is a vendor permitted to situs its sales under this section, and that the purchaser may claim a partial refund of the sales tax collected on the transaction if the tax rate for the tax jurisdiction in which the vendor is located exceeds the tax rate for the tax jurisdiction in which the purchaser receives the property.

(b) In each sale by a vendor permitted to situs its sales under this section, the vendor shall clearly indicate on the invoice or other similar document provided to the purchaser at the time of the sale that the vendor is a vendor permitted to situs its sales under this section, and that the purchaser may be liable for additional sales or use tax if the purchaser removes the property from the tax jurisdiction in which the purchaser receives the property to a tax jurisdiction with a tax rate that exceeds the rate in the tax jurisdiction in which the purchaser received the property.

(2) A purchaser that receives tangible personal property or services in a delivery sale from a vendor permitted to situs its sales under this section may claim a refund of the tax the vendor collected and remitted on the sale in an amount equal to the excess of the tax collected and remitted over the tax that would have been due if the sale had been sitused to the tax jurisdiction in which the purchaser received the property or service.

A refund is authorized under this division only if the invoice or other similar document provided to the purchaser at the time of the sale includes the notice required under division (I)(1) of this section.

Refunds shall be claimed in the manner prescribed by section 5739.07 of the Revised Code.

(3) A purchaser of tangible personal property from a vendor permitted to situs its sales under this section that removes the property from the tax jurisdiction in which the purchaser received the property is liable for additional tax in an amount equal to the excess of the tax that would have been due on the sale if the sale had been sitused to the tax jurisdiction to which the purchaser removed the property over the tax that the vendor collected and remitted on the sale.

(4) For the purposes of division (I) of this section, "delivery sale" has the same meaning as in section 5739.033 of the Revised Code, and "tax jurisdiction" has the same meaning as in section 5739.24 of the Revised Code.

(J) Nothing in this section relieves a person claiming to be authorized to situs sales under this section, but not so authorized, from liability for tax, penalty, interest, or additional charges imposed under this chapter for failure to collect the amount of tax lawfully due applying the situsing provisions of divisions (C) to (I) of section 5739.033 of the Revised Code.

Sec. 5739.123.  (A) As used in this section, "destination-based sourcing requirements" means the manner in which sales are required to be sourced under divisions (C) to (I) of section 5739.033 of the Revised Code.

(B) A vendor who holds a license issued prior to May 1, 2006, under division (A) of section 5739.17 of the Revised Code may apply for temporary compensation to assist the vendor in complying with the destination-based sourcing requirements for the first six months those sourcing requirements become applicable to the vendor under section 5739.033 of the Revised Code. The vendor shall file the application in accordance with division (C) of this section. The compensation shall be the actual amount of tax collected per county for each month of the six-month period, not to exceed twenty-five dollars per county per month, for sales of tangible personal property delivered to each county in which the vendor does not have a fixed place of business and does not, or is not required to, hold a license issued under division (A) of section 5739.17 of the Revised Code for that business. Only amounts paid by the vendor for which the vendor is eligible for a discount under division (B) of section 5739.12 of the Revised Code and that are shown on returns filed during that six-month period shall be considered in calculating the compensation. In no event shall a vendor receive compensation that exceeds its total cost of complying with the destination-based sourcing requirements. For purposes of the six-month compensation period, a partial month shall be considered a month.

(C) A vendor that applies for compensation under this section shall file an application with the tax commissioner on a form prescribed by the commissioner. The application shall be filed within sixty days after the end of the reporting period that includes the last day of the last month of the six-month period for which the vendor is requesting compensation. The commissioner shall determine the amount of compensation to which the vendor is entitled, and if that amount is equal to or greater than the amount claimed on the application, the commissioner shall certify that amount to the director of budget and management and the treasurer of state for payment from the general revenue fund. If the commissioner determines that the amount of compensation to which the vendor is entitled is less than the amount claimed on the vendor's application, the commissioner shall proceed in accordance with section 5703.70 of the Revised Code.

(D) The compensation provided under this section shall not reduce the amount required to be returned to counties and transit authorities under section 5739.21 of the Revised Code.

Sec. 5740.10.  (A) As used in this section, "delivery sale" has the same meaning as in section 5739.033 of the Revised Code.

(B) It is the intent of the General Assembly for this state to become a full member in the streamlined sales and use tax agreement to enhance collection of the taxes imposed under Chapters 5739. and 5741. of the Revised Code by remote multi-state sellers. This state's participation has been jeopardized, however, because the agreement does not resolve issues relating to the situsing of certain sales and because of the impact the agreement has on businesses located within and outside this state that have annual delivery sales in this state of less than five hundred thousand dollars.

If the tax commissioner determines, on or before October 1, 2007, that the agreement has been amended or interpreted by the streamlined sales tax governing board to allow a vendor with total annual delivery sales of less than five hundred thousand dollars to situs its sales under section 5739.035 of the Revised Code, the commissioner shall certify that determination by journal entry on or before that date, shall provide notice of the determination on the department of taxation's web site, and shall notify vendors and sellers the commissioner reasonably believes to be affected by the certification.

Sec. 5741.03.  (A) Four and two-tenths One hundred per cent of all money deposited into the state treasury under sections 5741.01 to 5741.22 of the Revised Code that is not required to be distributed as provided in division (B) or (C) of this section shall be credited to the local government fund for distribution in accordance with section 5747.50 of the Revised Code, six-tenths of one per cent shall be credited to the local government revenue assistance fund for distribution in accordance with section 5747.61 of the Revised Code, and ninety-five and two-tenths per cent shall be credited to the general revenue fund.

(B) In any case where any county or transit authority has levied a tax or taxes pursuant to section 5741.021, 5741.022, or 5741.023 of the Revised Code, the tax commissioner shall, within forty-five days after the end of each month, determine and certify to the director of budget and management the amount of the proceeds of such tax or taxes from billings and assessments received during that month, or shown on tax returns or reports filed during that month, to be returned to the county or transit authority levying the tax or taxes, which amounts shall be determined in the manner provided in section 5739.21 of the Revised Code. The director of budget and management shall transfer, from the same funds and in the same proportions specified in division (A) of this section general revenue fund, to the permissive tax distribution fund created by division (B)(1) of section 4301.423 of the Revised Code and to the local sales tax administrative fund created by division (B)(C) of section 5739.21 of the Revised Code, the amounts certified by the tax commissioner. The tax commissioner shall then, on or before the twentieth day of the month in which such certification is made, provide for payment of such respective amounts to the county treasurer or to the fiscal officer of the transit authority levying the tax or taxes. The amount transferred to the local sales tax administrative fund is for use by the tax commissioner in defraying costs the commissioner incurs in administering such taxes levied by a county or transit authority.

(C) Of the revenue deposited into the state treasury from taxes paid under division (B) of section 5741.05 of the Revised Code, a percentage shall be distributed each fiscal year to all counties and transit authorities that levy a tax under section 5739.021, 5739.023, or 5739.026 of the Revised Code. The percentage to be distributed each fiscal year shall be computed by dividing the amount described in division (C)(1) by the amount described in division (C)(2) of this section:

(1) The total sales and use tax revenue distributed to counties and transit authorities in the calendar year that ended in the preceding fiscal year;

(2) The sum of the total sales and use tax revenue distributed to such counties and transit authorities in that calendar year plus the total revenue collected in that calendar year from the taxes levied under sections 5739.02 and 5741.02 of the Revised Code.

(D) Each county and transit authority shall receive a monthly distribution each fiscal year from the revenue to be distributed as provided in division (C) of this section. The amount of the distribution for each such county and transit authority shall equal a percentage of the revenue to be distributed in the fiscal year under that division. The percentage shall be computed by dividing the amount described in division (D)(1) by the amount described in division (D)(2) of this section:

(1) The total sales and use tax revenue distributed to the county or transit authority under division (B) of section 5739.21 of the Revised Code in the calendar year that ended in the preceding fiscal year;

(2) The total sales and use tax revenue distributed to all counties and transit authorities under division (B) of section 5739.21 of the Revised Code in that calendar year.

Sec. 5741.05. (A) Beginning January 1, 2005 Except as provided in division (B) of this section, a seller that collects the tax levied by sections 5741.02, 5741.021, 5741.022, or 5741.023 of the Revised Code on transactions, other than sales of titled motor vehicles, titled watercraft, or titled outboard motors, shall determine under section 5739.033 or 5739.034 of the Revised Code the jurisdiction for which to collect the tax. A vendor or seller of motor vehicles, watercraft, or outboard motors required to be titled in this state shall collect the tax levied by section 5739.02 or 5741.02 of the Revised Code and the additional taxes levied by division (A)(1) of section 5741.021, division (A)(1) of section 5741.022, and division (A)(1) of section 5741.023 of the Revised Code for the consumer's county of residence as provided in section 1548.06 and division (B) of section 4505.06 of the Revised Code.

(B)(1) Divisions (B) and (C) of this section apply only if the tax commissioner makes the certification under section 5740.10 of the Revised Code.

(2) For the purposes of this division and division (C) of this section, "delivery sale" has the same meaning as in section 5739.033 of the Revised Code, and "tax jurisdiction" has the same meaning as in section 5739.24 of the Revised Code.

(3) Except as otherwise provided in division (B)(4) of this section, and notwithstanding sections 5741.02, 5741.021, 5741.022, and 5741.023 of the Revised Code, a seller with total delivery sales in this state in calendar year 2007 and each calendar year thereafter of less than five hundred thousand dollars may elect to collect the tax due under this chapter at a rate equal to the sum of the tax levied under section 5741.02 of the Revised Code and the lowest combined rate of tax levied in any tax jurisdiction in this state under sections 5741.021, 5741.022, and 5741.023 of the Revised Code.

(4) Once a seller has total delivery sales in this state of five hundred thousand dollars or more for a calendar year, the seller shall source its sales pursuant to division (A) of this section regardless of the amount of the seller's total delivery sales in future years.

(C)(1) In each sale by a seller permitted to collect use tax under division (B) of this section, the seller shall clearly indicate on each invoice or other similar document provided to the purchaser at the time of the sale that the seller is authorized to collect use tax at the rate prescribed in division (B)(3) of this section and that the purchaser may be liable for additional use tax if the purchaser removes the property from the tax jurisdiction in which the purchaser receives the property to a tax jurisdiction with a tax rate exceeding the rate in the tax jurisdiction in which the purchaser receives the property.

(2) If a purchaser purchases tangible personal property from a seller permitted to collect use tax pursuant to division (B) of this section and pays the tax due under that division to the seller, no assessment may be made against the purchaser for additional tax due under section 5741.021, 5741.022, or 5741.023 of the Revised Code unless the purchaser subsequently removes the property from the tax jurisdiction in which the resident received the property to another tax jurisdiction with a higher tax rate.

(3) Nothing in this section relieves a person that claims to be authorized to collect the tax as provided in division (B) of this section, but that is not so authorized, from liability for tax, penalties, interest, or additional charges imposed under this chapter for failure to collect the amount of tax lawfully due applying the situsing provisions of division (A) of this section.

(D) A vendor or seller is not responsible for collecting or remitting additional tax if a consumer subsequently stores, uses, or consumes the tangible personal property or service in another jurisdiction with a rate of tax imposed by sections 5741.02, 5741.021, 5741.022, or 5741.023 of the Revised Code that is higher than the amount collected by the vendor or seller pursuant to Chapter 5739. or 5741. of the Revised Code.

Section 2.  That existing sections 5739.033, 5739.035, 5739.123, 5741.03, and 5741.05 of the Revised Code are hereby repealed.

Section 3. That the amendment or enactment by this act of sections 5739.033, 5739.035, 5740.10, 5741.03, and 5741.05 of the Revised Code applies to sales occurring on or after January 1, 2008.

Section 4.  Section 5739.035 of the Revised Code is presented in this act as a composite of the section as amended by both Am. Sub. H.B. 66 and Am. Sub. S.B. 26 of the 126th General Assembly. The General Assembly, applying the principle stated in division (B) of section 1.52 of the Revised Code that amendments are to be harmonized if reasonably capable of simultaneous operation, finds that the composite is the resulting version of the section in effect prior to the effective date of the section as presented in this act.