FAQs • Clayton County, IA • CivicEngage

What is the difference between a TIF Area and a TIF Tax District?: TIF Area is defined in the ordinance adopted by the city or county. A TIF Area may need to be broken into multiple TIF Tax Districts because of different Consolidated Tax Levy Rates or due to an amendment to the TIF Area, such as happens in an annexation. For more information, please call the Auditor's Office at 563-245-1106.

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Tax Increment Financing (TIF)

1. What is a TIF Area?: A tax increment financing area (TIF Area) is usually created by a city or county for use as an economic development tool. A community college can also create a TIF Area for a new jobs training program. For more information, please call the Auditor's Office at 563-245-1106.

2. What is the difference between a TIF Area and a TIF Tax District?: TIF Area is defined in the ordinance adopted by the city or county. A TIF Area may need to be broken into multiple TIF Tax Districts because of different Consolidated Tax Levy Rates or due to an amendment to the TIF Area, such as happens in an annexation. For more information, please call the Auditor's Office at 563-245-1106.

3. How is a TIF Area created?: A city or county must adopt an urban renewal plan and then an ordinance for the division of TIF taxes. The process prescribes public notice and public hearing requirements. For more information, please call the Auditor's Office at 563-245-1106.

4. What happens to the “base” taxes and the “increment” taxes?: Taxes levied on the base value are distributed by the county treasurer to the Levy Authorities in the same manner as regular (non-TIF) Tax Districts. Taxes levied on the increment value are paid to the TIF Authority. For more information, please call the Auditor's Office at 563-245-1106.

5. Who is the “TIF Authority”?: The TIF Authority is the governmental body that created the TIF Area. Usually a city, it could also be a county, a community college, or a rural improvement zone. For more information, please call the Auditor's Office at 563-245-1106.

6. How much of my taxes go to the city (or county) for debt for the TIF Area?: The amount of increment taxes depends on the relative proportion of base value to increment value in the TIF Area, and also on whether or not the TIF Authority requests all of the available TIF increment taxes in a given year. You can see the distribution of your taxes on your tax bill. For more information, please call the Auditor's Office at 563-245-1106.

7. Do all of the taxes on the increment value go to pay TIF debt?: No. Debt levies for counties, schools, and cities are applied against both base and increment value, as are physical plant and equipment levies for school districts. For more information, please call the Auditor's Office at 563-245-1106.

8. Are my taxes higher because my property is in a TIF Area?: To answer this question, it is useful to assume a situation in which two real estate parcels are exactly the same in the following respects: each has the same valuation, Property Class, tax credits & exemptions, and Consolidated Tax Levy Rate. The only difference between the two is that one is in a TIF Area and the other is not. The result is that both properties will pay exactly the same amount of taxes. The difference in a TIF Area is not how much you pay in taxes, but who receives the taxes. For more information, please call the Auditor's Office at 563-245-1106.

9. What qualifies to be paid from taxes on the increment value?: What qualifies to be paid from taxes on the increment value?
TIF tax revenues are used to repay debt incurred for qualifying urban renewal projects within a TIF Area. Projects are for the purposes and activities listed in Code of Iowa Sections 403.6 or 403.12 and should also be included in city’s urban renewal plan. TIF debt for an urban renewal project can take the form of rebate agreements, internal loans, general obligation bonds, or TIF revenue bonds. For more information, please call the Auditor's Office at 563-245-1106.