TIF is an economic development program that helps promote local tax base expansion by using property tax revenues to fund site improvements to attract new development, rehabilitation/conservation, industrial, mixed-use, eliminate blight and environmental remediation. A TIF is located in a Tax Incremental District (TID) which is the actual area (parcels) designated for expansion where improvements are being made.
When a TID is created, the municipality and other taxing entities agree to support their normal operations from the existing tax base within the district, since if not for the creation of a TID, there would be no growth to the existing tax base. Property tax rates for the school, county, technical college, and municipality are based on the taxable value of the TID at the time it is created. These rates are then applied to the TID value increment, which results in additional revenues collected for the district's fund. Eligible TID costs, diminished by any income, special assessments or other revenues, including user fees or charges are paid from these revenues before the added tax base is shared.
For more information visit the Wisconsin Department of Revenue website at www.revenue.wi.gov.