Tax Increment Financing (TIF)

• Statutory - 65 ILCS 5/11-74.4-3
• Regulations - Part 525
  

The department distributes state sales tax collections to municipalities that have tax increment financing (TIF) districts for either state sales tax, state utility tax, or both that produced an incremental growth in retail sales, or gas and electricity consumption. Funds are prorated to each municipality based on its share of the overall TIF net state increment.

Overall TIF funding is 0.27 percent of net state sales tax revenues. Funds are allocated quarterly to all eligible TIF municipalities. Each TIF district is subject to the following reduction in order to determine the net state sales tax increment (the maximum amount available to each municipality for each TIF district):

• 80 percent of the increment up to and including $100,000
• 60 percent of the increment exceeding $100,000 but not exceeding $500,000
• 40 percent of all amounts exceeding $500,000

For each quarterly distribution, each eligible municipality receives a prorated share of the available distribution amount.

For more information about the Property Tax TIF Program, contact the Department of Commerce and Economic Opportunity.