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Links:
NH RSA 162-K, Municipal Economic Development and Revitalization
Districts
NH OSP Technical Bulletin on TIFs |
Tax Increment Finance Districts
(TIF)
- An Overview -
WHAT IS A TAX INCREMENT FINANCE DISTRICT (TIF)?
A TIF is a special tax district used to promote commercial
and industrial development.
WHAT DOES A TIF DO?
A TIF provides financing for public improvements (sewer,
water, roads, etc.) using new tax revenue created by new, expanded,
or renovated commercial property in a TIF district, which is
defined by the community. A TIF district can be undeveloped
land, a Main Street district, the whole downtown, a few parcels –
whatever the communities chooses.
HOW DOES A TIF
WORK?
After defining the TIF district, the current assessed values
and taxes are set as a baseline. Any increase in property values
within the district (through new construction, expansion, or
renovation) will result in an “incremental” increase in taxes above
the baseline. All or part of this increase is used to pay for
infrastructure improvements (sewer, water, roads, etc.) within the
district.
A
TIF CAN BE A “WIN-WIN” FOR RESIDENTS AND BUSINESSES
For residents:
A TIF can encourage commercial and industrial development in the
community. Once the public improvements in the district have been
paid for, the increased tax revenue generated by the new development
becomes part of the Town’s general revenue. With a TIF,
these improvements can be made at no cost to other tax payers.
For businesses:
A TIF can provide an attractive mechanism to pay for infrastructure
improvements necessary for business construction, expansion, or
renovation. Without a mechanism in place such as a TIF to fund
these necessary infrastructure improvements, a business may chose to
locate or expand in another community. Businesses want to locate in
a “town with a Plan”.
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