Tax Increment Financing (TIF)

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TIF Program Summary

Public financing tool used to fund public works or improvements for private residential, commercial or industrial development or revitalization through the allocation and dedication of all or a portion of the additional taxes resulting from increases in property values or from the increase in commercial activity as a result of the development or revitalization project


Uses and Purposes of Funding

  • Capital costs, including costs of actual construction, rehabilitation, remodeling or repair of buildings, structures or fixtures
  • Acquisition, upgrade or rehabilitation of machinery or equipment
  • Acquisition, clearing or grading of land
  • Financing costs
  • Real property assembly costs
  • Professional fees of architects, planners, engineers, and lawyers
  • Administrative costs
  • Relocation costs
  • Capital costs may also include costs of construction, rehabilitation or repair of publicly owned infrastructure outside the tax increment district that is of direct benefit to a project

Issuing Authority

A redevelopment authority, an industrial and commercial development authority or by agreement with a redevelopment authority, a municipal authority, is designated as the issuer of the TIF Bonds or notes, receives the allocated tax increments and deposits them into a tax increment fund.

TIF District

A contiguous geographic area within a “redevelopment area” which a planning commission has found to be “blighted” in accordance with the Urban Redevelopment Law so as to require redevelopment under that Act or the TIF Act. The term of the TIF District may not exceed 20 years unless an amendment is made to the initial project plan.

Tax Increment Allocation

  • Determined by the local taxing bodies (county, school district, municipality) levying taxes in the TIF District

Terms

  • Up to a 10-year term for machinery and equipment

Fees

  • Issuing authority fees and out of pocket costs
  • Legal fees