OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
S.B. 291 Bill Analysis
135th General Assembly
Click here for S.B. 291’s Fiscal Note
Version: As Introduced
Primary Sponsor: Sens. Wilkin and Lang
Effective Date:
Kitty Sorah, Attorney
SUMMARY
▪ Exempts from sales and use tax items purchased by a logistics business or its affiliates to
transport completed manufactured products from the manufacturing facility to a retail
facility or consumer.
▪ Exempts from sales and use tax items purchased by a logistics business or its affiliates to
transport general merchandise and grocery products from a distribution facility to the
point the products are shipped from that facility.
DETAILED ANALYSIS
Transportation equipment exemption
The bill authorizes exemptions for tangible personal property (TPP) that is used to
transport certain commercial products to certain destinations. Functionally, the bill contains two
such exemptions – one for transporting completed manufactured products (referred to for the
purpose of this analysis as the “manufactured product transportation exemption”) and the other
for transporting general merchandise and grocery products (“grocery transportation
exemption”). Each is described in detail below.
Continuing law exempts from sales and use tax TPP used primarily in a manufacturing
operation to produce TPP for sale, but this exemption does not apply to TPP purchased for use
after the manufacturing process is complete.1 Continuing law also exempts motor vehicles used
primarily for transporting TPP by a logistics business, or components or the repair of those
vehicles.2
1 R.C. 5739.011, not in the bill, and 5739.02(B)(42)(g).
2 R.C. 5739.02(B)(32).
December 6, 2024
Office of Research and Drafting LSC Legislative Budget Office
Commonalities between the two exemptions
Both of the proposed exemptions apply only if the qualifying equipment is purchased by
a business in either the transportation and warehousing sector or the warehouse club and
supercenter sector, as classified by the North American Industrial Classification System (NAICS).
The exemption also applies to affiliates of such businesses regardless of the affiliate’s industry
classification. The business or affiliate must be engaged in transporting TPP to destinations
outside Ohio in commercial tractors and trucks operated by and either owned or leased by the
business or affiliate. (The bill refers to these persons as “qualifying businesses.”)3
Both exemptions apply beginning on the first day of the first full month that commences
after the bill’s 90-day effective date.4
Manufactured product transportation exemption
The manufactured product transportation exemption applies to sales of TPP to a
qualifying business that is used primarily by that business to transport completed manufactured
products from the factory to the point at which the product will be sold at retail or directly to a
consumer. As illustrated in Figure 1, below, this encompasses nearly the entire supply chain of
the product after its manufacture is complete.
The exemption also extends to TPP used to power or charge that qualifying transportation
equipment.5
3 R.C. 5739.02(B)(67)(b).
4 Section 3.
5 R.C. 5739.02(B)(67)(a)(i) and (iii).
P a g e |2 S.B. 291
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
Grocery transportation exemption
In contrast, the grocery transportation exemption applies to sales of TPP to a qualifying
business that is used primarily by that business to transport grocery items or general
merchandise from within a warehouse or distribution center to the point at which those items
will be shipped from that facility. As illustrated in Figure 2, below, this exemption encompasses
a smaller portion of the items’ supply chain in comparison to the manufactured product
exemption. But similar to that exemption, the grocery transportation exemption extends to TPP
used to power or charge that qualifying transportation equipment.6
HISTORY
Action Date
Introduced 06-11-24
ANSB0291IN-135/ts
6 R.C. 5739.02(B)(67)(a)(ii) and (iii).
P a g e |3 S.B. 291
As Introduced


Statutes affected:
As Introduced: 5739.02