Tax Incremental Finance (TIF)

Tax Increments - How are they paid?

  1. Who certifies the value increment annually?
  2. When can the first tax increment be received by the municipality?
  3. Does residential development in a Tax Incremental District (TID) produce value increment?
  4. Is the personal property value located within a new TID included in the base value of the TID? Also, does that apply to an existing TID when adding additional personal property?
  5. If a municipality has received enough increment to pay off debt incurred for the district, can the excess increment be used to do more projects?
  6. If a TID is terminated in October, does an increment still get added to the tax levies in December?
  7. Should the entire final tax increment be collected the last year, if it isn't all needed?
  8. Can a municipality choose not to levy the increment on the tax roll?

  1. Who certifies the value increment annually?

    The Department of Revenue (DOR) certifies the annual value increment by August 15th each year. Municipalities must request that DOR certify their increment for each year they have a TID by filing the PE-209 electronic form due on May 15th. This value is based on the annual submission of the municipal assessor's Final Report for the TID.

  2. When can the first tax increment be received by the municipality?

    A TID effective on January 1, 2009, may receive its first increment after the first tax collection settlement in 2011. Taxes are levied in December, 2010, for any value increase between January 1, 2009 and January 1, 2010, and those are paid in 2011.

  3. Does residential development in a Tax Incremental District (TID) produce value increment?

    All value increases in a TID become part of the increment, there is no qualification regarding what caused the value increase.

  4. Is the personal property value located within a new TID included in the base value of the TID? Also, does that apply to an existing TID when adding additional personal property?

    The January 1 base value is the taxable real estate and personal property plus the municipal-owned property not municipal-used. Increment value does include real estate and personal property as of the January 1 timeline.

  5. If a municipality has received enough increment to pay off debt incurred for the district, can the excess increment be used to do more projects?

    Yes, if the expenditure period has not expired. Only projects in the approved plan can be covered with TIF funds. Otherwise a new project plan needs to be submitted to DOR outlining the new projects.

  6. If a TID is terminated in October, does an increment still get added to the tax levies in December?

    Yes, if a value increment is certified by DOR, the tax increment for that year must be levied and collected. The deadline is May 15th (using the online PE-209) for notifying DOR that the district will be terminated that year.

  7. Should the entire final tax increment be collected the last year, if it isn't all needed?

    Yes, anything else would result in unequal taxation. Any excess is returned to the overlying taxing jurisdictions involved.

  8. Can a municipality choose not to levy the increment on the tax roll?

    No. Wisconsin's constitution has a uniformity clause whereby all taxpayers must be uniformly taxed. By not levying the increment, the taxpayer in that municipality would be taxed at a different equalized rate (for school, technical, or county) than the other taxpayers in those same districts.

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

March 22, 2013