Tax Rules: Final: 5703-9
5703-9-06 Imposition of tax on transportation
services
(A) "Transportation service" means the provision of
transportation wholly within the state of Ohio by means of a
motor vehicle or aircraft with a driver or pilot.
(1) Transportation service includes, but is not limited to,
all of the following:
(a) Intrastate transportation by taxicab;
(b) Intrastate transportation by limousine;
(c) Intrastate bus transportation; and
(d) Shuttle service;
(2) Transportation service does not include:
(a) Transportation by ambulance. As used in this rule,
"ambulance" means any motor vehicle or aircraft specially
designed and equipped to provide medical transportation and
includes ambulettes that are specially designed and equipped
to provide transport to persons that require the use of a
wheelchair;
(b) Transportation provided by transit bus as defined by
section 5735.01 of the Revised Code;
(c) Transportation sold to, or provided by, a political
subdivision or agency of the federal or state government,
including, but not limited to, a county, municipal
corporation, county transit board, regional transit
authority, or regional transit commission; and
(d) Tour services, except for the transportation component as
provided in paragraph (D) of this rule.
(B) A person providing a transportation service shall charge
sales or use tax on the entire price paid by the consumer for
the transportation service.
(C) "Tour service" means the provision of travel packages
that include transportation services along with one or more
of the following: admissions to events/locations; the
services of guides; overnight accommodations; and any similar
travel package element. A person providing only food and
beverages for consumption on the motor vehicle or aircraft,
in addition to a transportation service, is not providing a
tour service.
(D) 
The transportation element of
tour services is subject to the tax on providing
transportation service.
(1) A tour service provider that uses a transportation
service purchased from another shall be subject to the sales
or use tax on transportation services in the following
manner:
(a) If it does not separately state the charge for the
transportation service to its customer the tour service
provider is the consumer of the transportation service and it
is subject to the tax based on the price it pays for the
transportation service; or
(b) If it does separately state the charge for the
transportation service to its customer the tour service
provider is reselling the transportation service to that
customer. Subject to paragraph (G) of this rule, the tour
service provider shall collect and remit the tax based from
the customer based on that transportation service charge.
(2) A person providing a tour service using transportation
equipment it owns, leases, or otherwise has a license to use
shall be subject to the sales or use tax in the following
manner:
(a) If it does not separately state the charge for the
transportation service to its customer, the tour service
provider is subject to the tax based on the costs it incurs
for providing the transportation service as set forth in
paragraph (E) of this rule; or
(b) If it does separately state the charge for the
transportation service to its customer, subject to paragraph
(G) of this rule, the tour service provider shall collect the
tax from the consumer and remit the tax based on that
transportation service charge.
(E) Absent special and unusual circumstances, the price
charged or costs incurred by the person for the
transportation service shall include, at a minimum, the
following costs:
(1) The costs for the use of the vehicle or plane
(depreciation) including overhead costs;
(2) The costs for the fuel and maintenance costs of the
vehicle or plane;
(3) The costs for the driver(s) or pilot(s) including any
costs for such person’s(’) food and accommodations;
(4) The costs for parking and tolls; and
(5) Any additional costs for providing a transportation
service.
(F) Transportation services that do not include the costs in
paragraph (E) of this rule shall be considered sham
transactions and will be disregarded pursuant to section
5703.56 of the Revised Code.
(G) Nothing in this rule shall prohibit a tour service
provider providing transportation under paragraph (D)(1)(b)
or paragraph (D)(2)(b) of this rule from allowing the
customer to claim an exemption from the tax if the exemption
is claimed following the procedures prescribed by section
5739.03 of the Revised Code.
Effective: 12-16-05
Promulgated under: 5703.14
Authorized by: 5703.05
Amplifies: 5739.01(B)(3)(s)
Prior effective dates: 10-19-03, 01-16-04, 04-26-05