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The Business, Entrepreneurship & Tax Law Review

Abstract

Tax Increment Financing (“TIF”) is an economic development tool used by local municipalities to lure investment to areas that would not normally receive any. The process starts by having a local municipality or developer propose a redevelopment plan for a particular area. This area must fall into a statutory definition to be eligible for TIF and a “but-for” analysis is required, along with a proposal to a TIF commission. They then will move to approve or disapprove the proposal; if approved, the plan can be implemented for a defined duration. During the implementation, the purpose is for the investment plan to create property tax appreciation that will lead to higher tax revenue, thereby justifying the financing method.

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