A provision in Ohio's Gus Frangos Act quietly exempts land bank transactions from sales tax—potentially saving thousands on property deals.
Most Ohio real estate and property management professionals don't realize that when they buy from or sell to a county land reutilization corporation—commonly called a land bank—they may owe zero sales tax on the transaction. This exemption, buried in Senate Bill 102 (the Gus Frangos Act), went into effect upon enactment and has no sunset date.
Section 5739.02(B)(67) of the Ohio Revised Code creates a blanket sales tax exemption for both purchases made by and sales made by a county land reutilization corporation or its wholly owned subsidiary. In plain terms: if you're selling goods or services to a land bank, you don't collect Ohio sales tax. If you're buying property or services from a land bank, you don't pay sales tax.
This applies to any transaction where one party is the land bank or its subsidiary. A contractor selling materials to a land bank renovation project, a real estate firm listing a land bank property, or a property management company hired to maintain land bank holdings—all fall under this exemption.
The exemption directly impacts small and mid-sized businesses that work with land banks: contractors, suppliers, real estate agents, property managers, and service providers. On larger transactions—particularly renovation projects or bulk property sales—the sales tax savings can be substantial.
Land banks themselves benefit by reducing acquisition and operational costs, which can accelerate their ability to rehabilitate and return properties to productive use. This indirectly benefits the broader real estate market by increasing inventory and reducing blight in Ohio communities.
If you work with county land banks, you should audit your recent transactions to confirm you've applied this exemption correctly. Verify that your vendor or customer is indeed a county land reutilization corporation or its wholly owned subsidiary—the exemption doesn't extend to private land trusts or nonprofits that aren't formally designated land banks.
When negotiating contracts with land banks, factor in the sales tax savings. Because the exemption is permanent with no sunset date, you can build it into long-term pricing assumptions. For larger projects, the cumulative tax savings may be significant enough to affect project economics.
If you're a land bank or work closely with one, ensure your accounting and procurement teams understand this exemption. Failing to claim it means overpaying; claiming it incorrectly creates compliance risk. Documentation matters—keep clear records showing the counterparty is a qualifying land bank entity.
SB102's land bank sales tax exemption (effective upon enactment, Section 5739.02(B)(67)) is a real cost reduction for Ohio real estate professionals who work with these entities. It's not a loophole or temporary incentive—it's permanent law. Understanding and properly applying it can improve margins on land bank work and make those projects more competitive.
For a detailed, business-specific guide to this provision and other real estate tax changes in Ohio law, consult your tax advisor or local real estate trade association.