A provision in Ohio's Gus Frangos Act eliminates sales tax on transactions involving Community Land Retain Corporations—but most businesses don't know it exists.
Most Ohio property owners and contractors have never heard of it, but buried in SB102 (the Gus Frangos Act) is a sales tax exemption that could reduce costs on both sides of a transaction involving a Community Land Retain Corporation (CLRC).
Here's what changed: effective upon enactment, all sales to a CLRC and all sales by a CLRC are now exempt from Ohio's 5.75% state sales tax. That means if you're a contractor, supplier, or service provider selling demolition work, building materials, or other goods to a CLRC, you no longer collect or remit state sales tax on that transaction. The same applies in reverse—if a CLRC sells property or materials to you, no state sales tax applies.
Community Land Retain Corporations are nonprofit entities that acquire and hold land for community benefit, typically in partnership with local governments or development organizations. In practice, this exemption touches a wide range of small and mid-sized businesses:
Contractors and trades: Demolition companies, builders, HVAC installers, electricians, and other licensed trades that bid on CLRC projects no longer need to add state sales tax to their invoices for those jobs.
Material suppliers: Lumber yards, steel suppliers, concrete companies, and other vendors selling to CLRC projects skip the tax collection and remittance step.
Professional services: Engineering firms, architects, and consultants may also qualify, depending on how their services are structured.
Buyers from CLRCs: If you purchase property or materials directly from a CLRC, you're exempt from paying state sales tax.
The practical benefit is twofold: reduced transaction costs and simplified compliance. You're no longer required to collect, track, and remit sales tax on CLRC-related transactions, which cuts administrative overhead. For the buyer, it lowers the effective cost of the purchase. For the seller, it eliminates a compliance obligation on a specific category of customer.
The exemption is permanent—there's no sunset date or expiration window. It took effect upon enactment of SB102 and applies to all qualifying transactions going forward.
One important note: this exemption applies only to the state sales tax rate (5.75%). Local sales taxes, where applicable, may still apply depending on your jurisdiction. You should verify with your local tax authority or accountant whether additional local taxes are owed on CLRC transactions in your area.
The legal reference: This provision is codified in Ohio Revised Code Section 5739.02, found on page 336, lines 9707–9710 of SB102.
If you work regularly with CLRCs or expect to bid on CLRC projects, it's worth reviewing your sales tax procedures with your accountant to ensure you're applying the exemption correctly and documenting transactions properly for audit purposes.
For a detailed, business-specific guide to this provision and how it applies to your transactions, consult your tax advisor or local trade association.