Tax Increment Financing

Ohio Development Services Agency

Program Type:

Tax Increment Financing

Eligible Geography:

Ohio

Summary:

Tax Increment Financing (TIF) is an economic development mechanism available to local governments in Ohio to finance public infrastructure improvements and, in certain circumstances, residential rehabilitation. Payments derived from the increased assessed value of any improvement to real property beyond that amount are directed towards a separate fund to finance the construction of public infrastructure defined within the TIF legislation. Its objective is to finance public infrastructure improvements and, in certain circumstances, residential rehabilitation. A local political jurisdiction may exempt from real property taxes the value of private improvements up to 75 percent for a term of up to 10 years. Local governmental bodies seeking to offer greater amounts of assistance under the TIF must first obtain the concurrence of the affected board(s) of education. With the concurrence of its school board(s), a local political jurisdiction may exempt the value of improvements up to 100 percent for a term of up to 30 years. A TIF is legislatively created upon a declaration by a municipality, township, or county that private improvements to one or more parcels of real property within their respective jurisdictions serve a public purpose. Local jurisdictions seeking to establish a TIF project must enact legislation that (a) designates the parcel(s) to be exempted from taxation, (b) declares improvements to private property within the specified area as serving a public purpose, (c) delineates the public infrastructure improvements to be made that will directly benefit the parcel and (d) specifies the equivalent funds to be created for those redirected monies. Only those public infrastructure improvements directly serving the increased demand arising from the real property improvements to the parcel(s) or an Incentive District are eligible for TIF financing.

Eligible Recipients:

Local Government; For-Profit Business

Eligible Recipients Detail:

TIFs are implemented at the local level and may be created by a township, municipality or county.

Eligible Purpose:

General Infrastructure; Last Mile Connectivity; Building Connectivity; Anchor Institution Connectivity

Eligible Purpose Detail:

Local private improvements to one or more parcels of real property in any local jurisdictions that serve a public purpose. Private improvements may include the construction, expansion, and demolition of buildings, remediation, or other forms of site development. Residential projects are generally not eligible for TIF unless located within a blighted area of an impacted city.

Other Eligibility Criteria:

For any municipality, township, or county with a population (based on the most recent federal census) of 25,000 or more, an Incentive District TIF can be created only if the value of real property located within all Incentive Districts, including the proposed Incentive District, will not exceed 25% of the jurisdiction’s total real property valuation. Communities with a population of at least 25,000 that are considering creating an Incentive District TIF after January 1, 2006, must compute the following valuations: a) for property located within the proposed TIF, determine the taxable value of the property during the preceding tax year; and, b) determine what would have been the taxable value of property located within an Incentive District TIF during the preceding tax year that would have been taxable but for the fact that the property was located in an Incentive District TIF. Finally, divide the sum of a) and b) by the total taxable value of real property located in the jurisdiction for the preceding tax year. If the result of this calculation does not exceed .25, the proposed Incentive District TIF can be created.