A provision in Ohio's Gus Frangos Act creates a sweeping sales tax exemption for CLRCs—but most real estate professionals don't know it exists.
Most Ohio property owners and managers have never heard of Community Land Revitalization Corporations (CLRCs)—and fewer still know that a bill quietly moving through the legislature could give them a significant tax advantage that doesn't apply to traditional real estate operators.
Senate Bill 102, the Gus Frangos Act, contains a provision buried on page 336 that exempts CLRCs from Ohio's 5.75% state sales tax on virtually all their real estate transactions. For property professionals competing in the same market, understanding this exemption matters.
Section 5739.02, division (B)(67) exempts from state sales tax:
All sales TO a CLRC or its wholly owned subsidiary—meaning when a CLRC purchases property, materials, or services, no state sales tax applies.
All sales BY a CLRC or its wholly owned subsidiary—meaning when a CLRC sells property or provides services, the buyer pays no state sales tax.
The exemption stacks on top of existing exemptions. Additionally, R.C. 1724.02(D) exempts CLRCs from all state and local taxes and assessments on projects they fund and property they acquire or develop.
In practical terms, a CLRC purchasing a commercial building, acquiring materials for renovation, or selling improved property avoids the state's 5.75% tax plus any applicable county or transit authority add-ons—which can total 7% or more depending on location.
CLRCs are nonprofit entities created to acquire, hold, and manage land for community benefit. They're not common in every market, but they're growing in urban revitalization efforts. If you operate in a market where a CLRC is active—or considering becoming one—this provision changes the economics of real estate transactions.
For traditional property owners and managers, the practical impact is indirect but real: CLRC competitors operating in your market gain a cost advantage on acquisitions and dispositions. That can affect pricing, feasibility of projects, and competitive positioning.
SB102 does not specify an explicit effective date in the bill text. Under Ohio law, bills generally take effect 90 days after filing with the Secretary of State. Property owners should monitor the bill's passage and filing date to know when the exemption becomes operative.
If you're involved in real estate transactions in Ohio—whether as a buyer, seller, developer, or manager—track whether CLRCs are active in your market. Understand how this exemption might affect deal structure, pricing, or your competitive position. If you're considering CLRC status for a project, the tax savings are material enough to warrant professional review.
The provision is technical and easy to miss, but its financial impact is real. Property professionals who understand it early will be better positioned to respond.
This explainer is based on the text of SB102 as introduced. For specific application to your situation, consult a tax professional or attorney licensed in Ohio.