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Tax Increment Financing, commonly called TIF, is a unique economic development tool available to local governments in Ohio. Through TIF, cities, villages, counties, and townships can designate certain areas as TIF districts and use the increased property tax revenue generated from new development in those areas to pay for public infrastructure improvements. Rather than raising taxes or issuing new bonds, TIF channels the "increment" (the increase in assessed value and resulting property taxes) into development-related projects that may include streets, utilities, parking facilities, and other improvements. Understanding TIF law in Ohio is crucial for developers, property owners, municipalities, and residents affected by these projects.
There are several situations where legal assistance is critical regarding Tax Increment Financing in Ohio. Navigating TIF agreements and ensuring compliance with state statutes can be complex. Common scenarios requiring a lawyer include reviewing or drafting TIF agreements, negotiating terms between municipalities and developers, analyzing the impact of TIF on property values and taxes, and addressing disputes related to project implementation or eligible expenditures. Additionally, lawyers can aid in public hearings, help taxpayers understand how a TIF district may affect them, and offer guidance to school districts and other taxing authorities regarding revenue projections and compensation payments.
Ohio law specifically authorizes and regulates TIF through sections of the Ohio Revised Code, chiefly Chapter 5709. At its core, Ohio TIF law allows local governments to grant property tax exemptions for improvements within a TIF district, redirecting the resulting tax increment to a dedicated fund for infrastructure and eligible costs. Some key aspects of local laws include:
Laws and local ordinances may evolve, so consulting with legal professionals is recommended for up-to-date guidance.
Tax Increment Financing is a public financing tool that allows local governments in Ohio to use future property tax revenue increases from new development to fund infrastructure improvements within a designated area, called a TIF district.
City, village, township, and county governments can establish TIF districts under Ohio law. The process generally requires legislative action and public notice, with specific requirements varying by locality and type of TIF.
Most TIF exemptions in Ohio can last for up to 30 years, depending on the type of district and the applicable authorizing legislation.
TIF funds in Ohio are typically restricted to public infrastructure improvements, such as roads, water lines, sewer systems, and parking facilities. The law sets clear limits on eligible expenditures.
Since TIF can affect school funding (which relies on local property taxes), Ohio law generally requires municipalities to notify school districts before establishing a TIF and may require compensation payments to offset lost revenue, unless the school board consents otherwise.
Property owners in a TIF district continue to pay property taxes, but some or all of the tax revenue attributable to increased property values is redirected to pay for infrastructure supporting the development.
Yes, although there are special provisions and limitations on using TIF for residential projects, especially regarding the eligibility of improvements and required notifications to school districts and other taxing entities.
When a TIF exemption expires, all property tax revenues, including those from previously exempted improvements, revert to the standard taxing authorities, such as schools, municipalities, and counties.
TIF district boundaries are public records available from your local city, township, or county offices. You can also inquire with the county auditor or local economic development office.
Challenges can be made during the public notice and hearing process or by filing a legal challenge if procedural or substantive issues exist. Consulting with a legal professional is important to determine the appropriate strategy and deadlines.
If you need more information or wish to further understand Tax Increment Financing in Ohio, consider the following resources:
These organizations offer detailed guidance, information on TIF districts, and assistance for property owners and developers.
If you believe Tax Increment Financing may impact your property, business, or community, or if you are considering a project that may involve TIF, follow these steps:
Early consultation with legal counsel can help prevent costly mistakes and ensure your interests are protected throughout the Tax Increment Financing process.
