Tax Incremental Finance (TIF)

General

  1. TIF and Tax Incremental District (TID) – What is the difference?
  2. What is the Department of Revenue's (DOR) role?
  3. What statutes regulate the TIF program?
  4. How is TIF funded?
  5. Who are the other taxing entities?
  6. Are there limits on the use of TIF?
  7. What is the TID maximum life with or without extensions?
  8. How can I obtain information (map, parcels, etc.) about a particular TID?
  9. What fees must be paid to have a TID?
  10. How are the fees paid?

  1. TIF and Tax Incremental District (TID) – What is the difference?

    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 TID is the actual area (parcels) designated for expansion where improvements are being made.

  2. What is the Department of Revenue's (DOR) role?

    The TIF program is designed and intended to be locally initiated and a locally managed program. State oversight is minimal. DOR may not certify a tax incremental base until it determines that documents and procedures have been timely completed and notices timely given. The facts supporting any document adopted or action taken by the local governing body are not subject to review by DOR. The responsibility for specific TIF expenditures belongs to the municipality with consultation from their attorney and auditor.

    Questions about a specific project in a TID should be directed to the municipality or the members of the Joint Review Board (JRB) that approved the TID project plan and boundaries.

    See TID Base Year Packet information for specifics.

  3. What statutes regulate the TIF Program?

    • Village and City (regular) – sec. 66.1105, Wis. Stats.
    • Town - sec. 60.85 and sec. 60.23, Wis. Stats.
    • Environmental remediation - sec. 66.1106, Wis. Stats.
  4. How is TIF funded?

    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.

    The State of Wisconsin does not collect or pay increments to municipal governments. See the publication PE-212, An Intergovernmental/Private Partnership for additional information.

  5. Who are the other taxing entities?

    The other taxing entities are school district, county, technical college, lake district, sanitary district and metro sewer district.

  6. Are there limits on the use of TIF?

    Limits are applied to the creation of new districts or the addition of property to existing districts. The equalized value of property in the district, plus the value increment of all existing districts cannot exceed 12% of the total equalized value of taxable property within the municipality. This restriction does not apply when subtracting territory from a district.

  7. What is the TID maximum life with or without extensions?

    The maximum life of a TID depends on the type of TID and when it was created. See the TIF Criteria Matrix for specific details.

  8. How can I obtain information (map, parcels, etc.) about a particular TID?

    You should contact the municipality.

  9. What fees must be paid to have a TID?

    • Creation: $1,000, payable by October 31
    • Amendment (addition or subtraction): $1,000, payable by October 31
    • Amendment (addition and subtraction – same TID): $2,000, payable by October 31
    • Base Value Redetermination: $1,000, payable by October 31
    • Amendment (distressed/severely distressed): $500, payable by December 31
    • Project Plan (only) Amendment (no added/subtracted territory): no fee
    • Yearly maintenance fee: $150 per active TID, payable by May 15
  10. How are the fees paid?

    All fees are paid electronically through My Tax Account.

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

July 10, 2014