What Is Tax Increment Financing (TIF)?

Tax Increment financing (TIF) is a financing tool meant to support local economic development, redevelopment, and housing development that would not otherwise occur without assistance. As its name suggests, TIF uses the incremental property taxes, or “tax increments,” generated by the increased taxable value of a new development to help finance qualifying costs. TIF is not a tax reduction; taxes are paid on the full taxable value. The original taxable value continues to be part of the tax base that supports the tax levies of the city, county, school district, and other taxing jurisdictions. The new, additional value from development activity is “captured” from the tax base for the duration of the TIF district. After the TIF district is terminated, or “decertified,” the captured value becomes part of the tax base.

For more information, see our annual TIF Legislative Reports and our Training Opportunities page.