Tax Incentives

WHAT WE OFFER

Tax Increment Financing (TIF) is a means by which cities, towns, and villages may achieve a level of community and economic development far beyond current expectations. TIF is particularly useful to communities where local leaders envision a resurgence of population, a robust local economy, and a town capable of providing the varied public services, security, and quality of life so many young families, workers, business owners, and elderly persons are searching for today. 

​.A TIF District’s revenues (“tax increment”) come from the increased assessed value of property and improvements that occur within the District. Once a TIF District is established, the “base” assessed value is determined. As vacant land and dilapidated properties develop with TIF assistance, the equalized assessed valuation (EAV) of those properties increases. New property taxes resulting from the increased assessed valuation above the base value create an incremental increase in tax revenues generated within the TIF District. 

The “tax increment” created between the “base” and the new EAV is captured, deposited into a special city TIF account and used solely for economic development. The real estate tax increment can be used as a source of revenue to reimburse certain costs for public and private redevelopment projects either by issuing TIF Revenue Bonds or by reimbursing developers on a “pay-as-you-go” basis. All of the other overlapping taxing bodies continue to receive real estate tax revenue from the base assessed valuation, so there is no loss of revenue to those local taxing bodies.​The maximum life of a TIF District is 23 years. When the TIF ends and the town’s investments in both public and private redevelopment projects within the TIF redevelopment area are fully repaid, property tax revenues are again shared by all the taxing bodies. All taxing bodies then share the expanded tax base – the growth which would not have been possible without the utilization of Tax Increment Financing.  The majority of TIF Districts in Illinois are established and annually administered pursuant to the Tax Increment Allocation Redevelopment Act (65 ILCS 5/11-74.4 et. seq.).

​A TIF District’s revenues (“tax increment”) come from the increased assessed value of property and improvements that occur within the District.