Sugarcreek Township v. City of Centerville, 979 N.E.2d 261

Sugarcreek Township sought declaratory judgment that Centerville could not implement a TIF on annexed land under expedited type-2 annexation RC 709.023; annexed land under type-2 remains part of the township for tax purposes RC 709.023(H).
Centerville argued TIF under RC 5709.40 may temporarily exempt improvements from both city and township taxes to spur development.
Courts below split on whether TIF exemptions could apply to township outside millage while land remains in the township
The Ohio Supreme Court held that a municipality may adopt a RC 5709.40 TIF for annexed land despite RC 709.023(H), subject to a 75% exemption cap absent school-district approval.
TIF exemptions only apply to improvements; unimproved portions and the remainder of the township’s taxes remain, within statutory limits, and the case reverses a contrary appellate ruling.

Issue	Plaintiff's Argument	Defendant's Argument	Held
May a city apply a TIF to land annexed via expedited type-2?	Township argues RC 709.023(H) bars TIF.	Centerville contends TIF allowed by RC 5709.40 complements annexation.	Yes; TIF may apply to annexed land.
How does RC 709.023(H) affect township tax collection when TIF is used?	Holders of township taxes should not be reduced.	TIF does not eliminate township taxes; some taxes remain.	Annexed land remains subject to township taxes; TIF applies to improvements up to 75%.
What are the limits of the TIF impact on taxes for annexed land?	Township will lose tax revenue on improvements beyond 25%.	TIF exemptions capped at 75% unless boards of education approve more.	75% exemption cap; 25% of improvements remain taxable.

Middletown v. McGee, 39 Ohio St.3d 284 (Ohio 1988) (state policy favors municipal annexation)
State v. Lowe, 112 Ohio St.3d 507 (2007) (statutory interpretation governs annexation and TIF interaction)
Portage County Bd. of Comm’rs v. Akron, 109 Ohio St.3d 106 (2006) (plain-language reading of statutes controls)