A tax-allocation district (TAD), also known as

tax increment financing Tax increment financing (TIF) is a public financing method that is used as a subsidy for redevelopment, infrastructure, and other community-improvement projects in many countries, including the United States. The original intent of a TIF program i ...

, is a defined area where real estate

property tax A property tax (whose rate is expressed as a percentage or per mille, also called ''millage'') is an ad valorem tax on the value of a property.In the OECD classification scheme, tax on property includes "taxes on immovable property or Wealth t ...

monies gathered above a certain threshold for a certain period of time (typically 25 years) to be used for a specified

improvement Improvement is the process of a thing moving from one state to a state considered to be better, usually by a change or addition that improves. The concept of improvement is important to governments and businesses, as well as to individuals. Hi ...

. The funds raised from a TAD are placed in a

tax A tax is a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. Tax co ...

-free

bond (finance) In finance, a bond is a type of Security (finance), security under which the issuer (debtor) owes the holder (creditor) a debt, and is obliged – depending on the terms – to provide cash flow to the creditor (e.g. repay the principal (i.e. a ...

where the money can continue to grow. These improvements are typically for revitalization and especially to complete

redevelopment Redevelopment is any new construction on a site that has pre-existing uses. It represents a process of land development uses to revitalize the physical, economic and social fabric of urban space. Description Variations on redevelopment include ...

efforts. Tax-increment financing has attracted much criticism as merely a

subsidy A subsidy, subvention or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy. It ensures that individuals and households are viable by having acc ...

to connected developers. California, where the practice began, has discontinued their use though it will be paying off debt on previous formed districts for years to come. Enactment of a TAD typically requires approval of all

local government Local government is a generic term for the lowest tiers of governance or public administration within a particular sovereign state. Local governments typically constitute a subdivision of a higher-level political or administrative unit, such a ...

s who will be giving-up taxes, thus a project within a

municipality A municipality is usually a single administrative division having municipal corporation, corporate status and powers of self-government or jurisdiction as granted by national and regional laws to which it is subordinate. The term ''municipality' ...

will also require approval of the

county A county () is a geographic region of a country used for administrative or other purposesL. Brookes (ed.) '' Chambers Dictionary''. Edinburgh: Chambers Harrap Publishers Ltd, 2005. in some nations. The term is derived from the Old French denoti ...

commission In-Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of anot ...

(or its local equivalent), and the

board Board or Boards may refer to: Flat surface * Lumber, or other rigid material, milled or sawn flat ** Plank (wood) ** Cutting board ** Sounding board, of a musical instrument * Cardboard (paper product) * Paperboard * Fiberboard ** Hardboard, a ...

of the

school district A school district is a special-purpose district that operates local public Primary school, primary or Secondary school, secondary schools or both in various countries. It is not to be confused with an attendance zone, which is within a school dis ...

, in addition to the

city council A municipal council is the legislative body of a municipality or local government area. Depending on the location and classification of the municipality it may be known as a city council, town council, town board, community council, borough counc ...

and possibly

township A township is a form of human settlement or administrative subdivision. Its exact definition varies among countries. Although the term is occasionally associated with an urban area, this tends to be an exception to the rule. In Australia, Canad ...

board of supervisors (if applicable). This differs from an improvement district, which the property owners agree to pay extra for improvements. That is only an option for an area which is already in good economic health.

Examples

*In the U.S. state of

Georgia Georgia most commonly refers to: * Georgia (country), a country in the South Caucasus * Georgia (U.S. state), a state in the southeastern United States Georgia may also refer to: People and fictional characters * Georgia (name), a list of pe ...

, TAD

legislation Legislation is the process or result of enrolling, enacting, or promulgating laws by a legislature, parliament, or analogous governing body. Before an item of legislation becomes law it may be known as a bill, and may be broadly referred ...

was created in 1985 and is described in the OCGA sectio
36-44-5

External links

Creating a Tax Allocation District For Athens Clarke County
Urban planning in the United States Local taxation in the United States {{tax-stub