Drees Co. v. Hamilton Township
132 Ohio St. 3d 186
Ohio2012Background
- Hamilton Township is a limited-home-rule township in Warren County that faced rapid growth and revenue needs.
- In 2007 the board adopted Amended Resolution 2007-0418, implementing impact fees for roads, fire, police, and parks to fund services for new development.
- Fees apply to zoning-certificates for new construction or redevelopment; amounts vary by land-use category and include a per-unit or per-1,000-square-foot basis.
- Fees are deposited into separate, non-general funds with a first-in/first-out spending rule and are refundable if unspent within seven years.
- Appellants paid a $200 zoning-fee plus impact fees for single-family projects and sued for declaratory and injunctive relief, arguing the fees are unconstitutional taxes.
- Trial court and court of appeals upheld the township’s authority, but the Ohio Supreme Court reversed, holding the fees are taxes not authorized by general law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the impact fees taxes under R.C. 504.04(A)(1)? | Fees are taxes to fund general services. | Fees are true charges for a service and not taxes. | Taxes; impact fees are not authorized. |
| Do Withrow factors govern this case’s tax/fee classification? | Withrow factors show fee characteristics and dedicated purpose. | Withrow factors can support a tax characterization here. | Withrow factors indicate taxes, not fees. |
| Does the Am. Landfill three-factor test apply to classify the assessment? | Imposition by legislature with broad impact resembles a public tax. | Assessment resembles a regulatory fee for services. | Test supports tax classification. |
| Is there a public-benefit vs. private-benefit distinction relevant here? | Stipulated purpose ties fees to benefiting the particular property. | Benefits accrue to the township community generally. | Public-benefit orientation favors tax characterization. |
Key Cases Cited
- Withrow, 62 Ohio St.3d 111 (1991) (test distinguishing taxes from fees via substance over form)
- Am. Landfill, Inc. v. Stark/Tuscarawas/Wayne Joint Solid Waste Mgt. Dist., 166 F.3d 835 (6th Cir. 1999) (three-factor analysis for fee vs. tax; revenue use critical)
- Home Builders Assn. of Greater Des Moines v. West Des Moines, 644 N.W.2d 339 (Iowa 2002) (impact fee not based on special benefit; tax-like analysis)
- Mayor of Ocean Springs v. Homebuilders Assn. of Mississippi, Inc., 932 So.2d 44 (Miss. 2006) (absence of legislative intent to depart from lawful funding methods)
- San Juan Cellular Tel. Co. v. Pub. Serv. Comm. of Puerto Rico, 967 F.2d 683 (1st Cir. 1992) (classic tax vs. regulatory fee distinctions in allocation of funds)
- Bidart Bros. v. California Apple Comm., 73 F.3d 925 (9th Cir. 1996) (factors for tax/fee classification; emphasis on use of revenue)
- Cincinnati v. Roettinger, 105 Ohio St. 145 (1922) (historical definition of taxation versus general revenue)