Tax Incremental Finance (TIF)

Accounting Reports, Audits and Terminations

Reports and Audits

  1. What accounting reports are required to maintain a Tax Incremental District (TID)?
  2. Can the municipal audit serve as the annual report for a TID?
  3. What reports are required when a TID is terminated?
  4. If a TID final audit is done, but additional project costs are incurred, is another final audit required?
  5. Are statistical reports available for TIDs in the state?

Terminations

  1. What is the difference between terminating and dissolving a TID?
  2. What is required when a TID is terminated?
  3. If an existing TID is terminated so another TID can be created in the year, but one more increment is needed, is this possible?
  4. If a TID is terminated before May 15th of any given year, is it still eligible for an increment for that year?
  5. Must subsequent year forms be completed when a TID has been terminated?
  6. What if a TID is terminated and some expenses remain to be paid before disbursing any extra funds to the other overlying tax jurisdictions?
  7. If the municipality wants to close a TID before all funds are exhausted, can they move the funds to an escrow account and pay for the approved projects from that account; thereby eliminating the need to keep collecting and segregating the tax dollars?

Reports and Audits

  1. What accounting reports are required to maintain a Tax Incremental District (TID)?

    Each year, by May 1st, municipalities with a TID are required to distribute an Annual Report to all overlying taxing jurisdictions (county, school, technical college and special districts) summarizing the status of the TIDs they administer. They do not have to be submitted to the Department of Revenue (DOR).

    Three Certified Public Accountant (CPA) audits are also required as part of operating a TID:

    • The first is required after 30% of the expenditures are made.
    • The second is required 12 months after the end of the expenditure period.
    • The final audit is required 12 months after the termination of the TID. Upon final termination, an accounting report (see Question #4) must also be submitted to DOR.

    Note: If additional project costs are added to the project plan, you may be required to complete additional CPA audits depending on the amount added to the project plan.

  2. Can the municipal audit serve as the annual report for a TID?

    Yes, if it provides information on compliance with the TID's project plan and it adheres to the appropriate TIF statute requirements.

  3. What reports are required when a TID is terminated?

    The final CPA audit needs to be completed separately and filed electronically on the PE-110 (Tax Incremental District Final Accounting Report) along with the expanded Excel spreadsheet and emailed to the TIF mailbox. If the CPA final audit cannot be completed within 6 months, notify DOR for an extension. Forms are located on the DOR website. Failure to complete the required final audit within the agreed upon time limit may result in DOR not certifying the tax increment base of other tax incremental districts for your municipality. For more termination information, please see the TID Termination FAQ below.

  4. If a TID final audit is done, but additional project costs are incurred, is another final audit required?

    Yes, the final CPA audit should not be completed until all project costs are actually paid or arrangements have been made to cover upcoming expenditures, such as bond payments.

  5. Are statistical reports available for TIDs in the state?

    Yes, see the Reports Section of the DOR website for yearly data, base year of a TID, 12% value limit, number of TIDs in the municipality, changes in TID values, etc.

Terminations

  1. What is the difference between terminating and dissolving a TID?

A TID is terminated when all project costs have been recovered or its maximum life is reached. It is dissolved when the municipality decides to end it for any other reason. A dissolution must be done by resolution, the same as a termination.

  1. What is required when a TID is terminated?

The municipality must notify DOR within 60 days that it has terminated the district, using Form PE-223. A final audit must be performed, and a termination accounting report must be submitted. See DOR's website for specific forms and our TID FAQ on Reporting Requirements.

  1. If an existing TID is terminated so another TID can be created in the year, but one more increment is needed, is this possible?

Yes, terminate the existing TID after May 15th and adopt the creation resolution between May 15th and September 30th. DOR will certify another increment for the first TID, but will not count its value in the 12% test.

  1. If a TID is terminated before May15th of any given year, is it still eligible for an increment for that year?

No. For example, if terminated before May 15, 2009, it will not receive an increment for 2009 taxes payable in 2010.

  1. Must subsequent year forms be completed when a TID has been terminated?

The Tax Incremental District (TID) Assessment (TAR) and Tax Incremental District (TID) Statement of Assessment (TID SOA) are referred to as subsequent year forms. If the termination is effective that year, these forms are not required to be completed. DOR does need the online PE-209 (Certification of Continued TID Value Increment) completed, indicating that the TID has been terminated.

  1. What if a TID is terminated and some expenses remain to be paid before disbursing any extra funds to the other overlying tax jurisdictions?

Some municipalities have set up an escrow account to cover the final payment. This allowed them to complete their final audit. It is the municipality's responsibility to determine proper administration of such a situation.

  1. If the municipality wants to close a TID before all funds are exhausted, can they move the funds to an escrow account and pay for the approved projects from that account; thereby eliminating the need to keep collecting and segregating the tax dollars?

That is an option. It is a municipal decision.

FOR MORE INFORMATION PLEASE CONTACT:

Wisconsin Department of Revenue
Attn: Office of Technical and Assessment Services
PO Box 8971, MS 6-97
Madison, WI 53708-8971
Phone (608) 266-5708
Fax (608) 264-6897
Email additional questions to tif@revenue.wi.gov

Page last updated July 2, 2014