(A) In general, gross receipts from services are sitused to
Ohio in the proportion that the purchaser's benefit in Ohio with respect to
what was purchased bears to the purchaser's benefit everywhere with respect to
what was purchased. Except as otherwise set forth in this rule, the physical
location where the purchaser ultimately uses or receives the benefit of what
was purchased is paramount in determining the proportion of the benefit
received in Ohio. The tax commissioner will not require taxpayers to upgrade
their systems in order to comply with the general provisions of this rule as
long as the taxpayer makes a good faith effort to situs receipts from services
in a reasonable, consistent, and uniform method that is supported by the
taxpayer's business records as they existed at the time the service was
provided or within a reasonable time thereafter.
(B)
(1) For purposes of this proposed rule, "a purchaser
only located in Ohio" for an individual means a resident of Ohio having
no business locations outside Ohio. "A purchaser only located in
Ohio" for any other entity means that both of the following
apply:
(a) The entity's headquarters/commercial domicile (which
may be different from the state of incorporation or state of organization) is
in Ohio; and
(b) The entity has no physical locations outside
Ohio.
(2)
(a) For those enumerated services that allow for the
situsing of gross receipts using a reasonable, consistent, and uniform method
supportable by the service provider's business records, the primary focus
must be on the location where the purchaser ultimately uses or receives the
benefit.
(b) In the event the commissioner disagrees with a
taxpayer's reasonable, consistent, and uniform method of situsing its
gross receipts, a penalty will not be imposed if the situsing was found to be
made in good faith. While different methods may be used for different types of
services, the same method must be consistently used for all types of similar
services.
(C) The following is a list of various services and the
situsing method to be used for commercial activity tax purposes. This list is
not meant to be comprehensive, but provides guidance on how to source each
service listed. If a service is not specifically listed in this rule, the
situsing provisions for a similar service may provide guidance. Situations
which arise that do not match the examples provided may need to be handled on a
case by case basis. The department of taxation reserves the right to review and
adjust any apportionment of gross receipts made by a taxpayer.
(1) Accounting services
(a) If accounting services are performed for a purchaser
only located in Ohio, one hundred per cent of the gross receipts are sitused to
Ohio regardless of where the services are performed.
For example, a Kentucky sole proprietor with
only one retail store in Kentucky engages the services of an Ohio accountant to
prepare its financial statements. The gross receipts from this service are
sitused to Kentucky.
(b) If accounting services are performed for a purchaser
with operations within and without Ohio, the gross receipts are sitused to Ohio
if the services performed are of benefit to specific operations located in
Ohio.
For example, a national retailer hires an
Ohio accounting firm to address an inventory problem that exists at its Ohio
stores. The gross receipts from this service are sitused to Ohio
(c) At the election of the service provider, and as long as
it is applied in a reasonable, consistent, and uniform manner, accounting
services may be sitused according to the purchaser's "principal
place of business" or, if the purchaser is an individual and such
individual has no business locations outside of Ohio, at the individual's
residence. The term "principal place of business" for those other
than individuals refers to the location where the business unit being provided
the service primarily maintains its operations. In determining the
"principal place of business" of a purchaser, the following
measures, if known, shall be considered in sequential order:
(i) The branch, division, or other unit where the client
primarily receives the benefit of the accounting service;
For example, the New York division of a
large, multi-national corporation with operations in Ohio pays an Ohio
accountant accounting fees associated with the division's product
liability suit. Receipts from this service are sitused to New York, because the
accounting services were primarily received by the New York division.
(ii) The primary location of the management operations of
the purchaser's business unit; and
For example, an accounting firm provides
valuation services for the sale of one product line of a large, multi-state
manufacturer. The product line being sold has locations in several states, but
the management of the product line is located in Ohio. The gross receipts would
be sitused to Ohio since the first default, i.e., the location where the
purchaser primarily receives the services, would not be applicable, and the
business unit's management operations are in Ohio.
(iii) The billing address, acceptable if provided in good
faith. The billing address must be the site where the purchaser has some actual
operations, and not just a post office box.
For example, an accounting firm provides
valuation services for the sale of one product line of a large, multi-state
manufacturer. The product line being sold has locations in several states, with
management of the product line located in most of the locations. The billing
address may be used to situs the gross receipts as long as the address is
associated with an operation of the manufacturer.
(d) If accounting services relate to various locations both
within and without Ohio, the gross receipts may be sitused to Ohio using any
reasonable, consistent, and uniform method of apportionment that is supported
by the service provider's business records as they existed at the time
the service was provided or within a reasonable time thereafter.
(2) Advertising services
This provision only applies to those providing
advertising services and not those actually receiving advertising revenue for
allowing an advertisement to be placed in a newspaper, magazine, radio,
television or similar media.
(a) If advertising services are performed for a purchaser
only located in Ohio, one hundred per cent of the gross receipts are sitused to
Ohio regardless of where the services are performed.
(b) If advertising services are performed for a purchaser
with operations within and without Ohio, the gross receipts are sitused to Ohio
if the services performed are related to specific operations located in
Ohio.
(c) At the election of the service provider, and as long as
it is applied in a reasonable, consistent, and uniform manner, advertising
services may be sitused according to the purchaser's "principal
place of business" or, if the purchaser is an individual not engaged in a
business, at the individual's residence. The term "principal place
of business" refers to the location where the business unit being
provided the service primarily maintains its operations. In determining the
location of the purchaser's principal place of business, the following,
if known, apply in sequential order:
(i) The branch, division, or other unit where the purchaser
(client) primarily receives the benefit of the advertising
service;
(ii) The primary location of the management operations of
the purchaser's business unit; and
(iii) The purchaser's (client's) billing address
is acceptable if provided in good faith. The billing address must be the site
where the purchaser has some actual operations, and not just a post office
box.
(d) If advertising services relate to various locations
both within and without Ohio, the gross receipts may be sitused to Ohio using
any reasonable, consistent, and uniform method of apportionment that is
supported by the service provider's business records as they existed at
the time the service was provided or within a reasonable time
thereafter.
(3) Agents/managers of athletes/entertainers
(a) If an agent/manager represents an athlete in
negotiating a contract to play for an Ohio-based team, or for an individual to
appear at an Ohio-based sporting event, one hundred per cent of the gross
receipts are sitused to Ohio regardless of where the negotiations
occur.
For example, an agent negotiates a contract
for an athlete (regardless of athlete's residence) to play on a sports team in
Cincinnati, Ohio. One hundred per cent of the agent's fee is a taxable gross
receipt.
As another example, an agent negotiates a
contract for an athlete who resides in Ohio, but will play for a team based
outside Ohio. None of the agent's fee is sitused to Ohio.
(b) If an agent/manager represents an entertainer in
negotiating a contract to perform at an Ohio-based event, one hundred per cent
of the gross receipts related to that event are sitused to Ohio regardless of
where the negotiations occur.
For example, an agent books a performer for a
three-day concert in Marietta, Ohio. The agent's fee for that work is one
hundred per cent sitused to Ohio.
(c) If an agent/manager represents an entertainer in
negotiating a contract to perform at an Ohio location and locations outside of
Ohio, the gross receipts are sitused to Ohio based on the number of known Ohio
events compared to all known events.
For example, an agent books ten performances,
two of which are at Ohio locations and eight of which are at non-Ohio
locations. The agent's fee is twenty per cent sitused to Ohio.
(d) If the agent's/manager's services relate to
various locations both within and without Ohio, the gross receipts may be
sitused to Ohio using any reasonable, consistent, and uniform method of
apportionment that is supported by the service provider's business
records as they existed at the time the service was provided or within a
reasonable time thereafter.
(e) If an agent/manager represents an athlete or
entertainer in negotiating a contract to endorse some thing or some one in
Ohio, the gross receipts are sitused to Ohio based on the number of known Ohio
events compared to all known events. If no event locations are known, the gross
receipts are sitused to where the athlete or entertainer resides.
For example, an agent receives a fee for a
national endorsement for a golfer who is contracted to appear at a total of
twenty known events, two of which are known to be in Ohio events. The agent's
fee is ten per cent sitused to Ohio.
(4) Agency Other
(a) If agency services are performed for a purchaser only
located in Ohio, one hundred per cent of the gross receipts are sitused to Ohio
regardless of where the services are performed.
For example, a Kentucky sole proprietor with
only one retail store in Kentucky engages the services of an Ohio agent to
facilitate the purchase of merchandise from an Ohio manufacturer. The gross
receipts from this service are sitused to Kentucky.
(b) If agency services are performed for a purchaser with
operations within and without Ohio, the gross receipts are sitused to Ohio if
the services performed are of benefit to specific operations located in
Ohio.
For example, a national retailer hires an
Ohio agency to develop an advertising campaign targeting its Ohio stores. The
gross receipts from this service are sitused to Ohio.
(c) At the election of the service provider, and as long as
it is applied in a reasonable, consistent, and uniform manner, agency services
may be sitused according to the purchaser's "principal place of
business" or, if the purchaser is an individual not engaged in a
business, at the individual's residence. The term "principal place
of business" refers to the location where the business unit being
provided the service primarily maintains its operations. In determining the
"principal place of business" of a purchaser, the following
measures, if known, shall be considered in sequential order:
(i) The branch, division, or other unit where the purchaser
(customer) primarily receives the benefit of the agency service;
For example, the New York division of a
large, multi-national corporation with operations in Ohio pays an Ohio agent
fees associated with the division's life insurance policy. Receipts from
this service are sitused to New York, because the agency services were
primarily received by the New York division.
(ii) The primary location of the management operations of
the purchaser's business unit; and
For example, an advertising agency works
with a multi-state manufacturer to develop an advertising campaign for its
customers. The company has locations in several states, but the management of
the company is located in Ohio. The gross receipts would be sitused to Ohio
since the first default, i.e., the location where the purchaser primarily
receives the services would not be applicable, and the business unit's
management operations are in Ohio.
(iii) The purchaser's (customer's) billing
address is acceptable if provided in good faith. The billing address must be
the site where the purchaser has some actual operations, and not just a post
office box.
For example, an advertising agency provides
magazine advertising services for one product line of a large, multi-state
manufacturer. The product line being sold is located in several states, and the
management of the product line is located in most of the locations. The billing
address may be used to situs the gross receipts as long as the address is
associated with an operation of the manufacturer.
(d) If agency services relate to various locations both
within and without Ohio, the gross receipts may be sitused to Ohio using any
reasonable, consistent, and uniform method of apportionment that is supported
by the service provider's business records as they existed at the time
the service was provided or within a reasonable time thereafter.
(5) Appraisal services
(a) If the appraised property is located wholly in Ohio
(regardless of where the purchaser is located), one hundred per cent of the
gross receipts are sitused to Ohio.
For example, a local appraisal firm values
three Ohio business properties and no properties outside of Ohio. The gross
receipts from the appraisal services are sitused one hundred per cent to
Ohio.
(b) If the appraised property is within and without Ohio,
the gross receipts are sitused using any reasonable, consistent, and uniform
method of apportionment that is supported by the service provider's business
records as they existed at the time the service was provided. As a default, the
value of the appraised property in Ohio compared to the total value of the
appraised property everywhere will be accepted.
For example, if forty per cent of the
valuation is for Ohio properties and sixty per cent is for non-Ohio properties,
only forty per cent of the gross receipts received for that service are sitused
to Ohio.
(6) Architecture services (including drafting
services)
(a) If architectural services are performed for a purchaser
and the property being designed is to be located wholly in Ohio, one hundred
per cent of the gross receipts are sitused to Ohio regardless of where the
services are performed.
For example, architectural services are
performed for a property to be built in Youngstown, Ohio; one hundred per cent
of the gross receipts for that service are sitused to Ohio.
(b) If architectural services are performed for property
that will be located within and without Ohio, the gross receipts are sitused
using any reasonable, consistent, and uniform method of apportionment that is
supported by the service provider's business records as they existed at the
time the service was provided. As a default, the number of properties
anticipated to be built in Ohio compared to everywhere will be accepted. If the
services are not for standardized buildings, square footage may be used as a
method of apportionment unless it creates a distortion.
For example, architectural services are
performed for ten properties, three of which are in Ohio and seven of which are
at non-Ohio locations. The architect's fee is thirty per cent sitused to
Ohio.
(7) Athletes (including owners of animals used in sporting
events)
(a) If an athlete receives remuneration for participating
in or obtaining prize monies from an Ohio based event, one hundred per cent of
the gross receipts are sitused to Ohio. Remuneration includes, but is not
limited to, money, fair market value of property, or fair market value of
services.
For example, an owner receives ten thousand
dollars for a horse that shows (places third) at a race conducted in Ohio. That
receipt is one hundred per cent sitused to Ohio.
(b) If an athlete is paid for appearing at an Ohio-based
event, one hundred per cent of the gross receipts are sitused to
Ohio.
For example, a person is paid to attend a
home and garden show in Ohio, one hundred per cent of that gross receipt is
sitused to Ohio.
(c) If an athlete is paid for endorsing a thing or a person
in Ohio, the gross receipts are sitused to Ohio based on the number of known
Ohio events compared to all known events. If no event locations are known, the
gross receipts are sitused where the athlete resides. In dealing with national
endorsements, in general, four and one-tenth per cent will be accepted in
accordance with Ohio's population.
For example, a basketball player receives a
fee from a soft drink company and is contracted to appear at a total of eighty
known events, forty of which are in Ohio. The basketball player's fee is fifty
per cent sitused to Ohio.
(d) If the athlete's services relate to various
locations both within and without Ohio, the gross receipts may be sitused to
Ohio using any reasonable, consistent, and uniform method of apportionment that
is supported by the service provider's business records as they existed
at the time the service was provided or within a reasonable time
thereafter.
(8) Barbershop/beauty salon/spa services
If barbershop, beauty salon, or spa services
are performed in Ohio, one hundred per cent of the gross receipts are sitused
to Ohio.
For example, a resident of Indiana receives a
hair cut in Dayton, Ohio. One hundred per cent of that service is sitused to
Ohio.
(9) Cable/satellite services
(a) Gross receipts from cable/satellite services are
sitused to Ohio, in general, if the purchaser's (subscriber's) place of
primary use is in Ohio, regardless of where the cable and satellite services
originate. In general, the purchaser's (subscriber's) billing
address will be accepted as the primary use location unless the seller of the
service knows the purchaser (subscriber) is using the service in multiple
locations.
For example, a satellite radio service has
one million dollars in gross receipts from addresses billed to Ohio customers.
The one million dollars in receipts are one hundred per cent sitused to
Ohio.
(b) If the cable/satellite service provider knows that the
purchaser (subscriber) is using the service in multiple locations inside and
outside Ohio, the gross receipts are sitused to Ohio based on the number of
properties in Ohio where the purchaser (subscriber) receives these
cable/satellite services compared to everywhere.
(c) If cable/satellite services relate to various locations
both within and without Ohio, the gross receipts may be sitused to Ohio using
any reasonable, consistent, and uniform method of apportionment that is
supported by the service provider's business records as they existed at
the time the service was provided or within a reasonable time
thereafter.
(d) Gross receipts from providing billing and other
ancillary services for cable/satellite service providers shall be sitused to
Ohio based on the location of the purchaser's (cable/satellite service
provider's) customers. If not known, the location(s) of the purchaser may
be used.
(10) Call center services
(a) Gross receipts from providing call center services on a
fixed cost basis shall be sitused based on the location of the purchaser. Gross
receipts from providing call center services on a variable (or per call) cost
basis shall be sitused to Ohio based on the location of the purchaser's
customers. In determining the location of the purchaser and/or the
purchaser's customers, the following, if known, apply in sequential
order:
(i) The location (e.g. home, branch, division, or other
business unit) where the purchaser and/or purchaser's customer primarily
receives the benefit of the service;
(ii) The primary location of the management operations of
the purchaser's and/or purchaser's customers business units;
and
(iii) The purchaser's and/or purchaser's
customers' billing address is acceptable if provided in good faith. To
determine the purchaser's and/or purchaser's customer's
billing address, a provider of call center services may rely on the area code
and/or zip code of the purchaser and/or purchaser's
customer.
(b) If call center services relate to various operations
both within and within Ohio, the gross receipts may be sitused to Ohio using
any reasonable, consistent, and uniform method of apportionment that is
supported by the service provider's business records as they existed at
the time the service was provided or within a reasonable time
thereafter.
(11) Child care (day care or education)
services
If child care services are performed in Ohio,
one hundred per cent of the gross receipts are sitused to Ohio.
For example, a West Virginia resident obtains
day care services in Gallipolis, Ohio. One hundred per cent of the gross
receipts are sitused to Ohio.
(12) Collection agency services (including repossession
services)
(a) If collection services are performed for a purchaser
only located in Ohio, one hundred per cent of the gross receipts are sitused to
Ohio regardless of where the services are performed.
For example, a Pennsylvania repossession
agency that receives one hundred per cent of its gross receipts from an
automobile finance company whose business location is in Ohio, will situs all
of its gross receipts to Ohio.
(b) If collection services are performed for a purchaser
with operations within and without Ohio, the gross receipts are sitused to Ohio
if the services performed are related to specific operations located in
Ohio.
(c) At the election of the service provider, and as long as
it is applied in a reasonable, consistent, and uniform manner, collection
services may be sitused according to the purchaser's "principal
place of business" or, if the purchaser is an individual not engaged in a
business, at the individual's residence. The term "principal place
of business" refers to the location where the business unit being
provided the service primarily maintains its operations. In determining the
location of the purchaser's principal place of business, the following,
if known, apply in sequential order:
(i) The branch, division, or other unit where the client
primarily receives the benefit of the collection service;
(ii) The primary location of the management operations of
the client's business unit; and
(iii) The client's billing address is acceptable if
provided in good faith. The billing address must be the site where the client
has some actual operations, and not just a post office box.
(d) If collection services relate to various locations both
within and without Ohio, the gross receipts may be sitused to Ohio using any
reasonable, consistent, and uniform method of apportionment that is supported
by the service provider's business records as they existed at the time
the service was provided or within a reasonable time thereafter.
(13) Computer programming services
(a) If computer programming services are performed for a
purchaser only located in Ohio, one hundred per cent of the gross receipts are
sitused to Ohio, regardless of where the service provider is
located.
(b) If computer programming services are performed for a
purchaser that will use the computer programming within and without Ohio, the
gross receipts are sitused to Ohio if either of the following
apply:
(i) The services performed are related to a
purchaser's specific operations located in Ohio; or
(ii) The services are performed that do not relate to a
purchaser's specific operation. The services are sitused to Ohio based on
the purchaser's number of users in Ohio compared with the number of users
everywhere.
(c) If computer programming services relate to various
locations both within and without Ohio, the gross receipts may be sitused using
any reasonable, consistent, and uniform method of apportionment that is
supported by the service provider's business records as they existed at the
time the service was provided or within a reasonable time
thereafter.
(14) Construction contractors
(a) If construction contracting services are performed for
a purchaser and the property being constructed is located wholly in Ohio, one
hundred per cent of the gross receipts are sitused to Ohio regardless of where
the services are performed.
For example, if construction contracting
services are performed for property to be built in Youngstown, Ohio, one
hundred per cent of the gross receipts for that service is sitused to
Ohio.
(b) If construction contracting services are performed for
property that will be located within and without Ohio and there is no
separation of costs per location, the gross receipts are sitused using any
reasonable, consistent, and uniform method of apportionment that is supported
by the service provider's business records as they existed at the time the
service was provided. As a default, the number of properties anticipated to be
built in Ohio compared to everywhere will be accepted. If the services are not
for standardized buildings, square footage may be used as a method of
apportionment unless it creates a distortion.
For example, construction contracting
services are performed for ten properties, three of which are in Ohio and seven
of which are at non-Ohio locations. The contractor's fee is thirty per
cent sitused to Ohio.
(15) Contract manufacturing services
(a) For purposes of this rule, contract manufacturing
includes a person who provides manufacturing services on a piece of property
that the contract manufacturer does not own. Contract manufacturing should be
sitused the same as the sale or delivery of tangible personal property under
division (E) of section 5751.033 of the Revised Code.
(b) If the purchaser does not provide the location outside
of this state (i.e. a minimum of city and state) where the product is to be
shipped, the gross receipts in this situation are sitused to the location where
the contract manufacturing is performed.
For example, a New York company ships metal
tools both inside and outside Ohio. Gross receipts from contract manufacturing
performed on tools shipped inside Ohio are sitused to Ohio as a taxable gross
receipt. Gross receipts from contract manufacturing performed on tools shipped
outside of Ohio are not Ohio taxable gross receipts.
As another example, a New York contract
manufacturer makes an item that a seller located in Pennsylvania purchases from
the contract manufacturer to sell to an Ohio customer. Upon completion of the
contract manufacturing, the Pennsylvania seller instructs the contract
manufacturer to ship the product directly to its customer in Ohio. Both the New
York contract manufacturer's gross receipts and the Pennsylvania
seller's gross receipts are sitused to Ohio and, accordingly, are Ohio
taxable gross receipts.
(16) Data processing services
(a) If data processing services are performed for a
purchaser only located in Ohio, one hundred per cent of the gross receipts are
sitused to Ohio regardless of where the services are performed.
For example, an Indiana vendor provides data
processing services for a business that is located only in Ohio. The gross
receipts received from that Ohio business are sitused to Ohio.
(b) If data processing services are performed for a
purchaser with operations within and without Ohio, the gross receipts are
sitused to Ohio if the services performed are related to specific operations
located in Ohio.
For example, an Indiana vendor converts the
sales invoices of an Ohio business into an electronic format. The Ohio business
has a manufacturing plant in Indiana and has its sales operation in Ohio. The
gross receipts received from that Ohio business are sitused to Ohio.
(c) At the election of the service provider, and as long as
it is applied in a reasonable, consistent, and uniform manner, data processing
services may be sitused according to the purchaser's "principal
place of business" or, if the purchaser is an individual not engaged in a
business, at the individual's residence. The term "principal place
of business" refers to the location where the business unit being
provided the service primarily maintains its operations. In determining the
location of the purchaser's principal place of business, the following,
if known, apply in sequential order:
(i) The branch, division, or other unit where the purchaser
(client) primarily receives the benefit of the data processing
service;
(ii) The primary location of the management operations of
the purchaser's business unit; and
(iii) The purchaser's (client's) billing address
is acceptable if provided in good faith. The billing address must be the site
where the purchaser has some actual operations, and not just a post office
box.
(d) If data processing services relate to various locations
both within and without Ohio, the gross receipts may be sitused to Ohio using
any reasonable, consistent, and uniform method of apportionment that is
supported by the service provider's business records as they existed at
the time the service was provided or within a reasonable time
thereafter.
(17) Directors' fees
Fees received by a director of a corporation
for the performance of his/her duties are sitused to the headquarters of the
corporation. Remuneration includes, but is not limited to, money, stock, fair
market value of property, or fair market value of services.
(18) Electricity (including electric transmission and
distribution services)
Electricity (including electric transmission
and distribution services) must be sitused according to section 5733.059 of the
Revised Code.
(19) Employment services
Employment services are sitused to Ohio if the
employee is assigned to a post of duty (i.e., where employee primarily works)
located in Ohio.
For example, if an employment services company
based in Kentucky provides employment services for a company with a post of
duty in Cincinnati, Ohio, the gross receipts are one hundred per cent sitused
to Ohio.
(20) Engineering services
(a) If engineering services are performed for a purchaser
and the property is located wholly in Ohio, one hundred per cent of the gross
receipts are sitused to Ohio regardless of where the services are
performed.
For example, engineering services are
performed for a property to be built in Youngstown, Ohio; one hundred per cent
of the gross receipts for that service are sitused to Ohio.
(b) If engineering services are performed for property that
is located within and without Ohio, the gross receipts are sitused using any
reasonable, consistent, and uniform method of apportionment that is supported
by the service provider's business records as they existed at the time the
service was provided. As a default, the number of properties located in Ohio
compared to everywhere will be accepted.
For example, engineering services are
performed for ten properties, three of which are in Ohio and seven of which are
at non-Ohio locations. The engineer's fee is thirty per cent sitused to
Ohio.
(21) Entertainer services
(a) If an entertainer receives remuneration for
participating at an Ohio based event, one hundred per cent of the gross
receipts are sitused to Ohio. Remuneration includes, but is not limited to,
money, fair market value of property, or fair market value of
services.
(b) If an entertainer receives an appearance fee for
appearing at an Ohio based event, one hundred per cent of the gross receipts
are sitused to Ohio.
(c) If an entertainer is paid for endorsing a thing or a
person in Ohio, the gross receipts are sitused to Ohio based on the number of
known Ohio events compared to all known events. If no event locations are
known, the gross receipts are sitused where the athlete resides. In dealing
with national endorsements, in general, four and one-tenth per cent will be
accepted in accordance with Ohio's population.
For example, an entertainer receives national
advertisement for participating in an event. Four and one-tenth per cent of the
gross receipts from the endorsement are sitused to Ohio based on Ohio's
census population in 2006.
(d) If the entertainer's services relate to various
locations both within and without Ohio, the gross receipts may be sitused to
Ohio using any reasonable, consistent, and uniform method of apportionment that
is supported by the service provider's business records as they existed
at the time the service was provided or within a reasonable time
thereafter.
(22) Entertainment/amusement services
(a) If the entertainment services being purchased are to be
performed wholly in Ohio, one hundred per cent of the gross receipts are
sitused to Ohio, regardless of where the services are purchased.
(b) If the entertainment services being purchased are to be
performed within and without Ohio and originate and terminate from a location
in Ohio, one hundred per cent of the gross receipts are sitused to Ohio
regardless of where the purchaser makes the purchase of the
services.
For example, an evening riverboat cruise
leaves from Cincinnati, Ohio and returns to Cincinnati, Ohio. One hundred per
cent of the gross receipts are sitused to Ohio.
(c) In the case of gross receipts from the selling of
admission passes that can be used at locations within and without Ohio, gross
receipts are sitused to Ohio if the admission is to be primarily used at
locations in Ohio.
For example, if an admission pass can be used
at several locations inside and outside Ohio, the presumption is that the
receipt is an Ohio taxable gross receipt if the purchaser will primarily use
the pass at an Ohio location. In general, the primary use of the admission pass
is the closest facility to the purchaser's location at time of
purchase.
(d) If entertainment services relate to various locations
both within and without Ohio, the gross receipts may be sitused to Ohio using
any reasonable, consistent, and uniform method of apportionment that is
supported by the service provider's business records as they existed at
the time the service was provided or within a reasonable time
thereafter.
(23) Exterminating services
(a) If exterminating services are performed in Ohio, one
hundred per cent of the gross receipts are sitused to Ohio.
(b) If exterminating services are performed outside of
Ohio, one hundred per cent of the gross receipts are sitused outside of
Ohio.
(c) If exterminating services relate to various locations
both within and without Ohio, the gross receipts may be sitused to Ohio using
any reasonable, consistent, and uniform method of apportionment that is
supported by the service provider's business records as they existed at
the time of the performance of the service or within a reasonable time
thereafter.
(24) Facilities management services (including landscaping
services)
(a) If the facility being managed is located wholly in
Ohio, one hundred per cent of the gross receipts are sitused to
Ohio.
(b) If the fee is not per location and the service is
provided in Ohio and outside Ohio, the gross receipts are sitused using any
reasonable, consistent, and uniform method of apportionment that is supported
by the service provider's business records as they existed at the time the
service was provided or within a reasonable time thereafter.
(c) As a default, the number of properties located in Ohio
compared to everywhere will be accepted. If the services are not for
standardized buildings, square footage may be used as a method of apportionment
unless it creates a distortion.
(25) Financial planning services
(a) If financial planning services are performed for a
purchaser only located in Ohio, one hundred per cent of the gross receipts are
sitused to Ohio regardless of where the services are performed.
For example, financial planning services are
performed for an individual living in Youngstown, Ohio. One hundred per cent of
the gross receipts for that service are sitused to Ohio.
(b) If financial planning services are performed for a
business that is located within and without Ohio, the gross receipts are
sitused using any reasonable, consistent, and uniform method of apportionment
that is supported by the service provider's business records as they existed at
the time the service was provided or within a reasonable time thereafter. As a
default, the number of locations in Ohio compared to everywhere will be
accepted.
For example, financial planning services are
performed for a business having ten locations, three of which are in Ohio and
seven of which are outside of Ohio. The financial planner's fee is thirty
per cent sitused to Ohio.
(26) Funeral services
(a) Funeral services includes, but is not limited to,
making arrangements for viewings, embalming, burying, interring, cremating,
arranging transportation of the deceased, and all other services associated
with providing funeral services.
(b) If all of the funeral services are performed in Ohio,
one hundred per cent of the gross receipts are sitused to Ohio.
(c) In general, if portions of the funeral services are
performed within and without Ohio, gross receipts from the funeral services are
sitused to Ohio if the burial or cremation takes place in Ohio.
(27) Gambling services
Winnings received from a wager placed at an
Ohio location are sitused to Ohio.
For example, a Kentucky resident places a wager
at an Ohio horse racing simulcast facility for a race outside of Ohio and that
person wins one hundred sixty thousand dollars. The winnings are gross receipts
sitused to Ohio.
(28) Healthcare provider services
If healthcare services are performed in Ohio,
one hundred per cent of the gross receipts are sitused to Ohio. If a healthcare
service is provided partly in this state and outside this state, a reasonable
allocation for the services performed in Ohio must be made.
For example, a German resident comes to have a
surgery performed at a hospital in Ohio. One hundred per cent of that gross
receipt is an Ohio taxable gross receipt.
(29) Independent writers/artists services
(a) If the writer/artist delivers the item to the purchaser
in tangible or electronic format, the gross receipts are sitused to Ohio if the
purchaser receives the item in Ohio.
(b) If the writer/artist does not know the location of the
purchaser receiving the item, then gross receipts are sitused to Ohio if the
purchaser's address to which the writer/artist sends the invoice is
located in Ohio.
(c) If the writer's/artist's services relate to
various locations both within and without Ohio, the gross receipts may be
sitused to Ohio using any reasonable, consistent, and uniform method of
apportionment that is supported by the service provider's business
records as they existed at the time the service was provided or within a
reasonable time thereafter.
(30) Internet/web hosting services
(a) If Internet or web hosting services are performed for a
purchaser only located in Ohio, one hundred per cent of the gross receipts are
sitused to Ohio regardless of where the web host is located.
(b) If Internet or web hosting services are performed for a
purchaser only located outside Ohio, one hundred per cent of the gross receipts
are sitused outside Ohio regardless of where the web host is
located.
(c) At the election of the service provider, and as long as
it is applied in a reasonable, consistent, and uniform manner, Internet or web
hosting services may be sitused according to the purchaser's
"principal place of business" or, if the purchaser is an individual
not engaged in a business, at the individual's residence. The term
"principal place of business" refers to the location where the
business unit being provided the service primarily maintains its operations. In
determining the location of the purchaser's principal place of business,
the following, if known, apply in sequential order:
(i) The branch, division, or other unit where the purchaser
(client) primarily receives the benefit of the Internet or web hosting
service;
(ii) The primary location of the management operations of
the purchaser's business unit; and
(iii) The purchaser's (client's) billing address
is acceptable if provided in good faith. The billing address must be the site
where the purchaser has some actual operations, and not just a post office
box.
(d) If Internet or web hosting services are performed for a
purchaser located both within and without Ohio, the gross receipts are sitused
to Ohio using any reasonable, consistent, and uniform method of apportionment
that is supported by the service provider's business records as they
existed at the time the service was provided or within a reasonable time
thereafter.
(31) Investigation services
(a) If investigation services are performed for a purchaser
only located in Ohio, one hundred per cent of the gross receipts are sitused to
Ohio regardless of where the services are performed.
(b) If investigation services are performed for a purchaser
with operations within and without Ohio, the gross receipts are sitused to Ohio
if the services performed are related to specific operations located in
Ohio.
(c) If investigation services relate to various locations
both within and without Ohio, the gross receipts may be sitused to Ohio using
any reasonable, consistent, and uniform method of apportionment that is
supported by the service provider's business records as they existed at the
time the service was provided or within a reasonable time
thereafter.
(32) Legal services
(a) If legal services are performed that relate to Ohio,
one hundred per cent of the gross receipts are sitused to Ohio regardless of
where the services are performed.
For example, an attorney drafts a will in
Ohio for a client residing in Kentucky. The gross receipts from the will are
sitused to Kentucky since the services relate to a Kentucky estate. Similarly,
if an attorney drafts a will in Kentucky for a client who resides in Ohio, the
gross receipts from this service will be sitused to Ohio since the services
relate to an Ohio estate.
As another example, a company located solely
in Michigan sends its treasurer to Ohio for a meeting. The treasurer is
involved in an accident on a highway in Ohio, and the company hires an Ohio law
firm to represent the treasurer and the company in a proceeding in federal
district court in Ohio. The gross receipts from this service will be sitused to
Ohio since the services relate to an Ohio tort.
As another example, an attorney prepares a
corporation's (client's) case at the Ohio board of tax appeals. As
part of the preparation, the attorney travels to the corporation's
(client's) Tennessee location to interview the client's employees.
The gross receipts received by the attorney for all services, including those
services related to interviewing the client's employees in Tennessee, are
sitused to Ohio.
(b) Except as provided in paragraph (C)(32)(a) of this
rule, if legal services are performed for a purchaser only located in Ohio, one
hundred per cent of the gross receipts are sitused to Ohio regardless of where
the services are performed.
For example, an attorney drafts a contract in
Ohio for a purchaser (client) residing in Kentucky to settle the client's
dispute with the federal government over an employment contract. The gross
receipts are sitused to Kentucky. If the client resided in Ohio, the receipts
would be sitused to Ohio even if the contract was drafted in Kentucky.
As another example, an attorney makes an
appearance in the federal sixth circuit court of appeals in Cincinnati, Ohio
for a client located solely in Tennessee concerning the client's federal
income taxes. Receipts from this service are sitused to Tennessee.
(c) If legal services are performed for a purchaser with
operations in both Ohio and in another state or jurisdiction, the gross
receipts are sitused to Ohio if the services performed are related to specific
operations located in Ohio.
For example, an international retailer with
stores in Ohio hires an Ohio law firm with New York-licensed attorneys to
address a New York workers compensation claim. The gross receipts from this
service are sitused to New York. If the retailer hires a New York law firm with
Ohio-licensed attorneys to address an Ohio workers compensation claim, the
gross receipts from this service are sitused to Ohio.
(d) At the election of the service provider, and as long as
it is applied in a reasonable, consistent, and uniform manner, legal services
may be sitused according to the purchaser's "principal place of
business" or, if the purchaser is an individual not engaged in a
business, at the individual's residence. The term "principal place
of business" refers to the location where the business unit being
provided the service primarily maintains its operations. In determining the
location of the purchaser's principal place of business, the following,
if known, apply in sequential order:
(i) The branch, division, or other unit where the purchaser
(client) primarily receives the benefit of the legal service;
For example, the Ohio division of a large,
multi-national company incorporated in New York pays an attorney legal fees
associated with the division's product liability suit. Receipts from this
service can be sitused to Ohio, because the legal services were primarily
received by the Ohio division.
(ii) The primary location of the management operations of
the purchaser's business unit;
For example, a large, multi-national Ohio
corporation hires an attorney to defend its federal income tax return. Because
the service benefits the entire corporation, rather than a specific division or
business location, receipts from this service can be sitused to Ohio based on
its management's operations.
(iii) The purchaser's (client's) billing address
is acceptable if provided in good faith. The billing address must be the site
where the purchaser has some actual operations, and not just a post office
box.
(e) If legal services relate to various locations both
within and without Ohio, the gross receipts may be sitused to Ohio using any
reasonable, consistent, and uniform method of apportionment that is supported
by the service provider's business records as they existed at the time
the service was provided or within a reasonable time thereafter.
(33) Linen/uniform supply/dry cleaning services
If linen/uniform supply/dry cleaning services
are delivered to or picked up at a location in Ohio, one hundred per cent of
the gross receipts are sitused to Ohio. If the property is delivered to or
picked up at a location outside of Ohio, one hundred per cent of the gross
receipts are sitused outside Ohio.
(34) Magazines/newspapers
Subscription and advertising gross receipts are
to be sitused to Ohio based upon the proportion of the purchaser's
(publication's) circulation located in Ohio over the total of the
purchaser's (publication's) circulation located everywhere.
(35) Management consulting services
(a) If management consulting services are performed for a
purchaser only located in Ohio, one hundred per cent of the gross receipts are
sitused to Ohio regardless of where the services are performed.
(b) If management consulting services are performed for a
purchaser with operations within and without Ohio, the gross receipts are
sitused to Ohio if the services performed are related to specific operations
located in Ohio.
(c) At the election of the management consulting service
provider, and as long as it is applied in a reasonable, consistent, and uniform
manner, such services may be sitused according to the purchaser's
"principal place of business" or, if the purchaser is an individual
not engaged in a business, at the individual's residence. The term
"principal place of business" refers to the location where the
business unit being provided the service primarily maintains its operations. In
determining the location of the purchaser's principal place of business,
the following, if known, apply in sequential order:
(i) The branch, division, or other unit where the purchaser
(client) primarily receives the benefit of the management consulting
service;
(ii) The primary location of the management operations of
the purchaser's business unit; and
(iii) The purchaser's billing address is acceptable if
provided in good faith. The billing address must be the site where the
purchaser has some actual operations, and not just a post office
box.
(d) If management consulting services relate to various
locations both within and without Ohio, the gross receipts may be sitused to
Ohio using any reasonable, consistent, and uniform method of apportionment that
is supported by the service provider's business records as they existed
at the time the service was provided or within a reasonable time
thereafter.
(36) Market research services
(a) If market research services are performed for a
purchaser only located in Ohio, one hundred per cent of the gross receipts are
sitused to Ohio regardless of where the services are performed.
(b) If market research services are performed for a
purchaser with operations within and without Ohio, the gross receipts are
sitused to Ohio if the services performed are related to specific operations
located in Ohio.
(c) At the election of the service provider, and as long as
it is applied in a reasonable, consistent, and uniform manner, market research
services may be sitused according to the purchaser's "principal
place of business" or, if the purchaser is an individual not engaged in a
business, at the individual's residence. The term "principal place
of business" refers to the location where the business unit being
provided the service primarily maintains its operations. In determining the
location of the purchaser's principal place of business, the following,
if known, apply in sequential order:
(i) The branch, division, or other unit where the purchaser
(client) primarily receives the benefit of the market research
service;
(ii) The primary location of the management operations of
the purchaser's business unit; and
(iii) The purchaser's billing address is acceptable if
provided in good faith. The billing address must be the site where the
purchaser has some actual operations, and not just a post office
box.
(d) If market research services relate to various locations
both within and without Ohio, the gross receipts may be sitused to Ohio using
any reasonable, consistent, and uniform method of apportionment that is
supported by the service provider's business records as they existed at
the time the service was provided or within a reasonable time
thereafter.
(37) Membership fees
(a) If the membership fees being paid are for the right to
participate in events at a specific location or specific locations only located
in Ohio, one hundred per cent of the gross receipts are sitused to Ohio,
regardless of where the fees are paid.
For example, a golf course in Cincinnati,
Ohio receives membership dues from an individual who resides in Kentucky. Since
the membership to that Cincinnati course allows the Kentucky individual to golf
at that resort, the gross receipts shall be sitused to Ohio, even though the
individual resides outside of Ohio.
(b) In the case of gross receipts from the selling of
admission passes that can be used at locations within and without Ohio, gross
receipts are sitused to Ohio if the admission is to be primarily used at
locations in Ohio.
For example, if an admission pass can be used
at several locations inside and outside Ohio, the presumption is that the
receipt is an Ohio taxable gross receipt if the purchaser will primarily use
the pass at an Ohio location. In general, the primary use of the admission pass
is the closest facility to the purchaser's location at time of purchase.
(c) At the election of the service provider, and as long as
it is applied in a reasonable, consistent, and uniform manner, membership fees
may be sitused according to the purchaser's "principal place of
business" or, if the purchaser is an individual, at the
individual's residence. The term "principal place of
business" refers to the location where the business unit being provided
the service primarily maintains its operations. In determining the
"principal place of business" of a purchaser, the following
measures, if known, shall be considered in sequential order:
(i) The branch, division, or other unit where the purchaser
(client) primarily uses the membership for which the fee was paid;
(ii) The purchaser's (client's) primary location
of the management operations of the purchaser's (client's) business
unit; and
(iii) The purchaser's (client's) billing address
is acceptable if provided in good faith. The billing address must be the site
where the purchaser has some actual operations, and not just a post office
box.
(d) If the membership fees relate to various locations both
within and without Ohio, the gross receipts may be sitused to Ohio using any
reasonable, consistent, and uniform method of apportionment that is supported
by the service provider's business records as they existed at the time
the fees were paid or within a reasonable time thereafter.
(38) Money order/wire transfer services
If money order/wire transfer services are
delivered to or picked up at a location in Ohio, one hundred per cent of the
fee for such services are sitused to Ohio, regardless of where the money
order/wire transfer service originates.
(39) Moving/Storage Services
(a) If the moving service destination is to a location in
Ohio, one hundred per cent of the gross receipts are sitused to Ohio. Fees for
incidental storage during a moving service are not sitused to Ohio if both of
the following apply:
(i) The storage does not occur in Ohio; and
(ii) The storage fee is separately billed from the moving
service.
(b) Fees for packing and/or unpacking services shall be
sitused based upon where such services are provided.
(c) Fees for storage services shall be sitused to Ohio to
the extent the storage took place in Ohio.
(d) If moving, packing or unpacking, or storage services
relate to various locations both within and without Ohio, the gross receipts
may be sitused to Ohio using any reasonable, consistent, and uniform method of
apportionment that is supported by the service provider's business
records as they existed at the time the service was provided or within a
reasonable time thereafter.
(40) Payroll services
(a) If payroll services are performed for a purchaser with
its employees only located in Ohio, one hundred per cent of the gross receipts
are sitused to Ohio, regardless of where the services are
performed.
(b) If payroll services are performed for a purchaser with
employees within and without Ohio and the payroll services are provided for
more than one state including Ohio, the gross receipts are sitused to Ohio
based on the purchaser's number of employees (covered by the services)
located in Ohio to the number of employees everywhere.
(41) Promoters of arts/sports/similar event
services
(a) If a promoter promotes an Ohio-based event, one hundred
per cent of the gross receipts are sitused to Ohio regardless of where the
promoting services are performed.
(b) If a promoter promotes an event that will be held
within and without Ohio, the gross receipts are sitused to Ohio based on the
number of known events in Ohio compared to all known events. If no event
locations are known, the gross receipts are sitused using any reasonable,
consistent, and uniform method of apportionment that is supported by the
service provider's business records as they existed at the time the service was
provided or within a reasonable time thereafter.
(42) Radio/television broadcasting/internet advertising
services
Broadcasting and Internet advertising gross
receipts (including receipts from commercials and pay-per-click advertisements)
are to be sitused to Ohio based upon the proportion of the television or radio
station's audience or Internet provider's subscribers located in Ohio
over the total of the television or radio station's audience or Internet
provider's subscribers located everywhere.
(43) Real estate broker services
If real estate sold by a real estate broker is
located in Ohio, the gross receipts earned by the real estate broker are
sitused to Ohio, regardless of where the broker's services were performed. See
division (F)(3) of section 5751.01 of the Revised Code to see which gross
receipts of a real estate broker can be excluded.
(44) Repair/maintenance/installation services
(a) If the property to be repaired, maintained, or
installed is dropped off and picked up at the service provider's location
in Ohio, the gross receipts are sitused to Ohio.
(b) If the property is shipped to the service
provider's location in Ohio from outside of Ohio but is then picked up at
the location in Ohio, the gross receipts are sitused to Ohio.
(c) If the property is dropped off or shipped to the
service provider's location in Ohio and then shipped outside of Ohio, the
gross receipts are sitused outside of Ohio.
(45) Security services
(a) If security services are performed in Ohio, one hundred
per cent of the gross receipts are sitused to Ohio.
(b) If security services are performed outside of Ohio, one
hundred per cent of the gross receipts are sitused outside of
Ohio.
(c) If security services relate to various locations both
within and without Ohio, the gross receipts may be sitused to Ohio using any
reasonable, consistent, and uniform method of apportionment that is supported
by the service provider's business records as they existed at the time of
the performance of the service or within a reasonable time
thereafter.
(46) Tax preparation services
(a) If tax preparation services are performed for a
purchaser only located in Ohio, one hundred per cent of the gross receipts are
sitused to Ohio regardless of where the services are performed.
For example, the gross receipts from the
preparation in Kentucky of a federal income tax return for a client residing in
Ohio will are sitused to Ohio. Similarly, the gross receipts from the
preparation in Ohio of a federal income tax return for a client residing in
Kentucky will be sitused to Kentucky.
(b) If tax preparation services are performed for a
purchaser with operations within and without Ohio, the gross receipts are
sitused to Ohio if the services performed are related to specific operations
located in Ohio.
(c) At the election of the service provider, and as long as
it is applied in a reasonable, consistent, and uniform manner, tax preparation
services may be sitused according to the purchaser's "principal
place of business" or, if the purchaser is an individual not engaged in a
business, at the individual's residence. The term "principal place
of business" refers to the location where the business unit being
provided the service primarily maintains its operations. In determining the
location of the purchaser's principal place of business, the following,
if known, apply in sequential order:
(i) The branch, division, or other unit where the purchaser
(client) primarily receives the benefit of the tax preparation service; the
branch, division, or other unit where the purchaser (client) primarily receives
the benefit of the tax preparation service;
(ii) The primary location of the management operations of
the purchaser's business unit; and
(iii) The purchaser's (client's) billing address
is acceptable if provided in good faith. The billing address must be the site
where the purchaser has some actual operations, and not just a post office
box.
(d) If tax preparation services relate to various locations
both within and without Ohio, the gross receipts may be sitused to Ohio using
any reasonable, consistent, and uniform method of apportionment that is
supported by the service provider's business records as they existed at
the time the service was provided or within a reasonable time
thereafter.
(47) Technical assistance services
(a) If technical assistance services are performed for a
purchaser only located in Ohio, one hundred per cent of the gross receipts are
sitused to Ohio regardless of where the services are performed.
(b) If technical assistance services are performed for a
purchaser with operations within and without Ohio, the gross receipts are
sitused to Ohio if the services performed are related to specific operations
located in Ohio.
(c) At the election of the service provider, and as long as
it is applied in a reasonable, consistent, and uniform manner, technical
assistance fees may be sitused according to the purchaser's
"principal place of business" or, if the purchaser is an individual
not engaged in a business, at the individual's residence. The term
"principal place of business" refers to the location where the
business unit being provided the service primarily maintains its operations. In
determining the location of the purchaser's principal place of business,
the following, if known, apply in sequential order:
(i) The branch, division, or other unit where the purchaser
(client) primarily receives the benefit of the technical assistance
service;
(ii) The primary location of the management operations of
the purchaser's business unit; and
(iii) The purchaser's (client's) billing address
is acceptable if provided in good faith. The billing address must be the site
where the purchaser has some actual operations, and not just a post office
box.
(d) If technical assistance services relate to various
locations both within and without Ohio, the gross receipts may be sitused to
Ohio using any reasonable, consistent, and uniform method of apportionment that
is supported by the service provider's business records as they existed
at the time the service was provided or within a reasonable time
thereafter.
(48) Telecommunications services (including ancillary
telecommunications services)
(a) Except as provided in paragraphs (C)(48)(b) to
(C)(48)(g) of this rule, gross receipts from the sale of telecommunications
service or mobile telecommunications service shall be sitused to Ohio if the
customer's place of primary use of the service is in this state. In
general, the customer's "place of primary use" means the
street address representing where the customer's use of the
telecommunications service primarily occurs, which must be the residential
street address or the primary business street address of the customer. In the
case of mobile telecommunications service, such address is the place of primary
use only if it is within the licensed service area of the customer's home
service provider.
(b) Gross receipts from the sale of telecommunications
service sold on an individual call-by-call basis shall be sitused to Ohio if
either of the following applies:
(i) The call both originates and terminates in this
state;
(ii) The call either originates or terminates in this state
and the service address also is located in this state.
(c) Gross receipts from the sale of post-paid
telecommunications service shall be sitused to Ohio if the origination point of
the telecommunication signal, as first identified by the service
provider's telecommunication system, or as identified by information
received by the seller from its service provider where the system used to
transport such signals is not that of the seller, is located in this
state.
(d) Gross receipts from the sale of prepaid
telecommunications service or prepaid mobile telecommunications service shall
be sitused to Ohio if the purchaser obtains the prepaid card or similar means
of conveyance at a location in Ohio. Gross receipts from recharging a prepaid
telecommunications service or mobile telecommunications service shall be
sitused to Ohio if the purchaser's billing information indicates an Ohio
location.
(e) Gross receipts from the sale of private communication
services shall be sitused to Ohio as follows:
(i) One hundred per cent of the gross receipts from the
sale of each channel termination point within this state;
(ii) One hundred per cent of the gross receipts from the
sale of the total channel mileage between each termination point within this
state;
(iii) The gross receipts from the sale of service segments
for a channel between two customer channel termination points, one of which is
located in this state and the other outside this state, and which segments are
separately charged, shall be sitused fifty per cent to Ohio and fifty per cent
to the other state or jurisdiction in which the customer channel termination
points are located; or
(iv) The gross receipts from the sale of service for
segments of a channel located in this state and in more than one other states
or equivalent jurisdictions, and which segments are not separately billed,
shall be sitused to Ohio based on the percentage determined by dividing the
number of customer channel termination points in the state or equivalent
jurisdiction by the total number of customer channel termination
points.
(f) Gross receipts from the sale of billing services and
ancillary services for telecommunications service shall be sitused to Ohio
based on the location of the purchaser's customers. If not known, the
location(s) of the purchaser may be used.
(g) Gross receipts from the sale of access fees, such as
the carrier access charge paid by an interexchange carrier to connect to a
local exchange network in Ohio, shall be sitused to Ohio as
follows:
(i) Gross receipts from access fees attributable to
intrastate telecommunications service that both originates and terminates in
Ohio are sitused one hundred per cent to Ohio.
(ii) Gross receipts from access fees attributable to
interstate telecommunications service are sourced fifty per cent to Ohio if the
interstate call either originates or terminates in Ohio.
(iii) Gross receipts from interstate end user access line
charges, such as the surcharge approved by the federal communications
commission and levied pursuant to the Code of Federal Regulations, Title 47,
Part 69, shall also be sourced one hundred per cent to Ohio if the
customer's service address is in Ohio.
(h) All terms in this section are as defined in divisions
(AA) and (VV) of section 5739.01 of the Revised Code.
(49) Testing laboratories
(a) If testing services are performed in Ohio, one hundred
per cent of the gross receipts are sitused to Ohio.
(b) If testing services are performed outside of Ohio, one
hundred per cent of the gross receipts are sitused outside of
Ohio.
(c) If testing services relate to various locations both
within and without Ohio, the gross receipts may be sitused to Ohio using any
reasonable, consistent, and uniform method of apportionment that is supported
by the service provider's business records as they existed at the time of
the performance of the service or within a reasonable time
thereafter.
(50) Towing services
If the towing services originate from a
location in Ohio, one hundred per cent of the gross receipts are sitused to
Ohio regardless of the destination.
For example, a Pennsylvania resident's
car breaks down in Ohio and is towed back to Pennsylvania. The receipts for the
towing services are sitused to Ohio, since the towing service originated in
Ohio.
(51) Transportation services/brokers/logistics
(a) Gross receipts from transportation services are sitused
to Ohio based on division (G) of section 5751.033 of the Revised Code. The
provisions of paragraph (C)(51)(a) of this rule only apply to providers of
transportation services. Sellers of tangible personal property itemizing
transportations charges must situs such charges in the same manner as the
tangible personal property.
(b)
(i) For purposes of
this rule, "broker" means a person who, for compensation, arranges or offers to
arrange the transportation of property by an authorized motor carrier; and
"brokerage" or "brokerage services" means the arranging of transportation or
the physical movement of a motor vehicle or of property. If consulting services
are provided for logistics, please refer to management consulting services in
paragraph (C)(35) of this rule.
(ii) Gross receipts received by a broker not providing any
transportation services for the tangible personal property in question but
arranging solely for the provision of transportation services shall be sitused
to the location where the property is shipped.
(c) Logistics includes all the processes required to go
from raw materials to end customer delivery, including purchasing, inventory
management, warehousing, shipping, and customer returns, but does not include
transportation or brokerage services.
(i) If the logistics services relate to shipping
operations, the gross receipts shall be sitused based on the location where the
product is shipped.
(ii) If the logistics services relate to inventory
management and/or warehousing operations, the gross receipts shall be sitused
based on the location of the inventory and/or warehouse.
(iii) If the logistics services relate to purchasing
operations, the gross receipts shall be sitused to the location where the
purchaser benefits from such service. In determining the location of the
purchaser, the following, if known, apply in sequential order:
(a) The branch, division, or other unit where the purchaser
primarily receives the benefit of the service;
(b) The primary location of the management operations of
the purchaser's business unit; and
(c) The purchaser's billing address is acceptable if
provided in good faith.
(d) For purposes of paragraph (C)(51)(c) of this rule,
gross receipts from logistics services that relate to multiple types of
logistics operations may be sitused using any reasonable, consistent, and
uniform method of apportionment that is supported by the service
provider's business records as they existed at the time of the
performance of the service or within a reasonable time thereafter.
For example, a Wisconsin branch of a
multi-national manufacturer contracts with an Ohio logistics company to both
provide for improvements in its inventory management and for providing the
shipment of its goods to the purchaser's customers. The logistic
company's gross receipts are sitused in two different ways: the portion
relating to inventory management is sitused according to the logistic services
situsing provisions, in this case to the Wisconsin branch location; and the
portion relating to the transportation services is sitused based on the
company's miles traveled within Ohio to its miles traveled
everywhere.
(52) Travel arrangement services
(a) If travel arrangement services are performed for a
purchaser only located in Ohio, one hundred per cent of the gross receipts are
sitused to Ohio, regardless of where the services are performed or the location
of the travel destination.
(b) If travel arrangement services are performed for a
purchaser with operations within and without Ohio, the gross receipts are
sitused to Ohio if the services performed are related to a specific employee
whose post of duty is in Ohio.
For example, a multi-national corporation has
employees both within and without Ohio. The corporation uses one travel agent
to arrange the travel plans for all of its nationwide employees. If the
services are performed for an employee located in Ohio, the gross receipts from
that service will be sitused to this state.
(53) Veterinarian services
If veterinarian services are performed in Ohio,
one hundred per cent of the gross receipts are sitused to Ohio.
(54) Waste management services
If waste management services are performed in
Ohio, one hundred per cent of the gross receipts are sitused to Ohio.
For example, a waste hauler in New York ships
refuse to an Ohio landfill. The gross receipts received by the Ohio landfill
are sitused to Ohio, because the benefit of the purchaser (i.e. the waste
hauler) is having the refuse delivered to this state.