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Home Builders Association of Greater Cincinnati Win Supreme Court Decision in Impact Fee Dispute

CINCINNATI—Keating Muething & Klekamp PLL (KMK) worked on behalf of The Home Builders Association of Greater Cincinnati and builders to obtain a favorable decision from the Supreme Court, which concluded that a Hamilton Township impact fee constitutes an illegal tax.

The decision puts an end to a five-year legal battle, providing clarity to the difference between impact fee and taxes.

The firm’s Joseph L. Trauth, Jr., Charles M. Miller and Thomas M. Tepe, Jr. represented the client. Serving as co-counsel on this case were Richard A. Paolo, Kevin L. Swick and Edward P. Akin of Aronoff Rosen & Hunt, LPA.

The impact fee was imposed on new residential and commercial development projects in Hamilton Township for the purpose of paying for police and fire protection, roads and parks.

From the implementation of this fee by the Township, The Home Builders believed that the fee was an illegal tax. In a 7-0 decision, the Supreme Court unanimously agreed that the fee was a tax not allowed to be imposed by townships.

“This Supreme Court decision is good for all residents of Ohio and persons interested in building or purchasing a new home, said Trauth, partner at KMK. “Additionally, we have heard that local governments across the country have been paying close attention to this case to determine if they could safely enact similar ‘impact fees’ as a means to collect additional revenues. We are very pleased with the Court’s decision as it has a direct and positive impact on the developers and the homeowners in Warren County, and it serves to clearly define for others across the country what constitutes a valid impact fee versus what truly is an illegal tax.”

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