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Tax Increment Financing, commonly referred to as TIF, is a public financing method that municipalities in Missouri use to encourage economic development and redevelopment in specific areas. Under Missouri state law, TIF allows local governments to capture the increased tax revenues that result from improvements made to a designated district. These captured taxes are then used to reimburse developers or pay off bonds issued for infrastructure, environmental remediation, site preparation, or other project costs. The goal of TIF in Missouri is to stimulate private investment in areas that are considered “blighted,” underutilized, or in need of revitalization, ultimately boosting local economies and community resources.
Tax Increment Financing can involve complex legal, financial, and procedural issues. Individuals or organizations may need a lawyer for several reasons, including:
Given the unique requirements and procedural steps involved, legal counsel is strongly recommended when navigating TIF matters in Missouri.
In Missouri, the use of TIF is governed primarily by the Real Property Tax Increment Allocation Redevelopment Act found in Chapter 99 of the Missouri Revised Statutes. Key aspects of the law include:
Additional requirements or restrictions may be imposed by local ordinances or voter approval, depending on the municipality.
The primary purpose of TIF is to promote economic growth and redevelopment by encouraging private investment in areas that are struggling or underdeveloped, using future increases in tax revenue to reimburse upfront development costs.
A TIF district must be proposed in a redevelopment plan, reviewed by a TIF Commission, subjected to public hearings, and ultimately approved by the governing body of the municipality or county.
Eligible projects generally include redevelopment or construction in blighted, conservation, or economic development areas, such as urban renewal, infrastructure upgrades, retail centers, and housing developments.
By law, a TIF district typically has a maximum lifespan of 23 years before it must be dissolved, though some exceptions or extensions may apply under specific circumstances.
Property owners within a TIF district continue to pay property taxes at standard rates; however, the incremental increase in taxes derived from higher property values is redirected to fund the TIF project instead of going to general public services.
The Missouri Department of Economic Development oversees TIF reporting, but municipalities are responsible for ensuring funds are used in accordance with state law and are subject to public and governmental scrutiny.
TIF is often used to support private development projects, provided they meet statutory requirements and deliver public benefits such as increased employment, economic activity, or infrastructure improvements.
Community members can participate in public hearings, contact their local representatives, and submit formal comments or objections during the approval process of the TIF plan.
Yes, state law defines eligible uses, including public infrastructure, demolition, land acquisition, environmental remediation, and utility improvements specifically related to the redevelopment project.
While not always required, legal guidance is highly recommended, especially for developers, affected property owners, and anyone seeking to challenge or participate meaningfully in the TIF process.
Several resources and organizations can provide helpful information or support concerning Tax Increment Financing in Missouri:
If you believe that Tax Increment Financing may affect your property, business, or community - or if you are a developer seeking assistance with a TIF application - consider taking the following steps:
Legal advice tailored to your specific situation is invaluable when navigating the complexities of Tax Increment Financing in Missouri.
