Tax Increment Financing for Businesses
Tax increment financing (TIF) diverts a portion of business taxes to help finance development in an area or project site. TIF typically helps to pay for infrastructure improvements near a new development.
Helping You Understand Tif Funds
Core Bank’s team of friendly professionals is committed to helping you understand tax increment financing and providing the guidance your business needs to utilize TIF funds.
How Tax Increment Financing Works
If you own a business located in a TIF district and the area redevelops, the property values rise. Rather than collecting the increased taxes from TIF district properties, the city splits the property tax revenues into two streams.
The first stream is tax revenue set at the original amount of the property value before redevelopment, known as the “base rate.” This stream continues to go where it did before, which is typically a city’s general fund that pays for local services such as police and fire departments.
The second stream contains the additional tax money generated by the higher property value, or the “tax increment.” This stream is kept separate and used to pay for the redevelopment.
TIFs are typically targeted at areas with declining property values, new public improvements, and developer subsidies to help attract new businesses.
Tax Increment Financing FAQs
How does a TIF district work?
A TIF district works to reallocate funds from property taxes to encourage investment and property development within the district.
How long does a TIF district last?
TIF districts typically last 23 years. In some cases, the State Legislature may extend this time to cover the taxes levied.
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Get in touch with our team to learn more about tax increment financing and how we can help you! We’re here to answer your questions.
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