Tax Increment Financing (TIF) Districts have been available in Vermont as a public infrastructure financing tool for many years. Vermont’s TIF program has undergone many statutory changes through the years, especially since the introduction of a statewide education property tax.
Generally, a TIF District is established by a municipality around an area that requires public infrastructure to encourage public and private real property development or redevelopment. The property values at the time the District is created are determined and the property taxes generated by that original value continue to go to the taxing entities (municipality and state).
After the municipality creates a TIF District and gets approval by the State to utilize the incremental education property tax revenue for TIF debt, the municipality must get voter approval to incur debt to build public infrastructure. The public infrastructure improvements cause real property development and redevelopment to occur, and, for a limited time, a percentage of the incremental municipal and education property tax revenue generated by the new development and redevelopment may be retained to pay the infrastructure debt, with the revenue from the original value and the balance of the increment going to the taxing entities (municipality and state). After the twenty-year property tax retention period, 100% of the incremental property taxes generated go to the taxing entities.
General Program Information
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TIF Statute and Rule
VSA Title 24, see Subchapter 5
VSA Title 32, see Subsections f-I
TIF District Rule: Adopted May 6, 2015 (pdf)
- Agreed Upon Procedures (AUP) Form (pdf) for exisiting TIF Districts to submit with their annual independent audits.