Challenge to Corporate Tax Incentives Rejected

In a blow to efforts to curb corporate incentives offered by states, cities, and school districts, the U.S. Supreme Court ruled last week that a group of taxpayers may not challenge tax credits that Ohio gave to an auto company in return for its investments in a manufacturing plant in the city.

The incentives, which typically forgive or abate property taxes and other levies, are intended to encourage development in depressed communities. But critics say they amount to giveaways that result in higher taxes for individual residents and other businesses, and do not boost the economy in the long run.

Ohio and Michigan taxpayers separately sued over a 1998 deal in which DaimlerChrysler Corp. agreed to build a new $1.2 billion assembly plant in Toledo, Ohio, in exchange for about $280 million in state...