The primary themes of Senate Bill 186 revolve around the establishment and funding of a state-level program to support certain music venues and festival promoters through sales tax rebates. The bill aims to:
- Create a “Music Incubator Program”: This is the core objective, providing financial incentives in the form of sales tax rebates.
- Support “Eligible Music Venue or Festival Promoter”: The bill defines specific criteria for entities to qualify for the program.
- Provide Sales Tax Rebates: The mechanism for support is a rebate on state sales tax collected, specifically on the sale of beer and wine.
- Promote Economic Benefit and Industry Growth: The underlying goal is to foster economic activity in communities and contribute to the growth of the music industry within Ohio.
- Fund the Program through Sales Tax Revenue: A dedicated fund will be established, sourced from a portion of the state sales tax.
Most Important Ideas/Facts:
- Bill Introduction and Sponsor: The bill is introduced by Senator Smith during the 136th General Assembly (2025-2026 Regular Session).
- Creation of New Section 122.97 and Amendment of Section 5739.21 of the Revised Code: These are the specific legislative actions proposed to implement the program.
- Definition of “Eligible Music Venue or Festival Promoter”: This is a crucial element, outlining the criteria for participation. Key requirements include:
- Holding a vendor’s license for at least two years.
- For venues: Dedicated audience capacity of not more than three thousand individuals.
- For festival promoters: Holding a music festival in a county with a population of less than one hundred thousand.
- Having a written contract with a musical performing artist that includes percentage of sales or a guaranteed amount.
- Meeting at least five additional criteria, including at least one related to marketing live performances or providing live music performances frequently. These additional criteria cover aspects like employment of staff (sound engineering, booking, etc.), live performance space, technical support, equipment storage, cover charges, and hours of operation.
- Application Process: Eligible entities can apply to the director of development. Applications are accepted starting September 1st of each year, beginning in 2026.
- Application Review and Approval: The director of development reviews applications within thirty days and approves them if the applicant is deemed eligible and provides or commits to providing an economic benefit to communities and the state’s music industry, including performers.
- Rebate Amount: The rebate amount is the lesser of:
- The amount of state sales taxes attributable to beer and wine sales remitted in the preceding fiscal year.
- One hundred thousand dollars.
- Total Rebate Cap: The total amount of rebates awarded annually is capped at ten million dollars.
- Use of Rebate Funds: Rebate funds must be used to recruit performing artists and bring live musical performances to Ohio. Recipients must provide documentation (receipts, invoices) to demonstrate this use. Misuse can result in required repayment.
- Music Incubator Rebate Fund: A dedicated fund will be created in the state treasury to hold and disburse the rebate money. Interest earned on the fund will be credited back to the fund. Unobligated and unexpended funds at the end of the fiscal year will be transferred to the general revenue fund.
- Funding Mechanism (Amendment to 5739.21): Beginning in fiscal year 2027, the first ten million dollars of state sales tax revenue deposited into the state treasury will be credited to the music incubator rebate fund. This earmarks a specific portion of sales tax for the program.
- Exclusion of Other Sales Tax Distributions: The ten million dollars for the music incubator rebate fund is credited before other distributions of sales tax revenue, such as those to counties or transit authorities.
Key Quotes:
- Section 122.97 (A): Defines “Eligible music venue or festival promoter.”
- Section 122.97 (C): States the rebate amount calculation: “the amount of the rebate shall equal the lesser of the following: (1) The amount of state sales taxes attributable to the sale of beer and wine remitted to the state by the eligible music venue or festival promoter during the preceding fiscal year; (2) One hundred thousand dollars.”
- Section 122.97 (D): Establishes the overall program cap: “The total amount of rebates awarded under this section for a single fiscal year shall not exceed ten million dollars.”
- Section 122.97 (E): Specifies the required use of rebate funds: “Eligible music venues and festival promoters shall use any rebate received under this section to recruit performing artists and bring live musical performances to the state.”
- Section 122.97 (F): Creates the funding mechanism: “The music incubator rebate fund is created in the state treasury…”
- Section 5739.21 (A)(1): Details the funding source: “Beginning in fiscal year 2027, the first ten million dollars deposited into the state treasury under sections 5739.01 to 5739.31 of the Revised Code in each fiscal year shall be credited to the music incubator rebate fund created in section 122.97 of the Revised Code.”
Summary of Impact:
If enacted, SB 186 would create a targeted sales tax rebate program in Ohio aimed at supporting smaller music venues and festival promoters, particularly those in less populated counties for festivals. The program intends to stimulate economic activity and foster the music industry by incentivizing the booking of live musical performances. The funding mechanism would dedicate a specific portion of annual state sales tax revenue, capped at $10 million, to this program. The bill outlines specific eligibility criteria, an application process, and requirements for the use and documentation of rebate funds.
Areas for Further Review:
- The full text of sections 5739.21, 5739.17, and 4301.01 of the Revised Code for complete context.
- The specific form and manner of the application as prescribed by the director of development.
- The definition and measurement of “economic benefit” as used for application approval.
- The process and criteria for determining misuse of rebate funds.