Tax Increment Financing (TIF)
Tax Increment Financing, or TIF, is a financial tool primarily used to encourage development and address blight. TIF is a mechanism for capturing the future tax benefits of new development in order to pay for the present cost of that development. Tax increment financing can be requested for property tax, sales tax, or both. Each taxing entity (county, library, school district, etc.) must approve or deny the use of TIF. El Paso County can only approve TIF requests pertaining to El Paso County’s portion of property and/or sales tax.
The portion of the property taxes that are produced by the levy at the rate fixed each year is referred to as the base amount. The portion of the property taxes in excess of the base amount due to new development is referred to as the increment amount. If approved, the increment amount may be allocated to the project each year for the duration of the TIF district (up to 25 years).
The portion of the sales taxes collected in the project boundaries is referred to as the base amount. All or any portion of sales taxes in excess of the base amount is referred to as the increment amount. The taxing entity can negotiate what percentage of increment sales taxes may be allocated to the project for the duration of the TIF district.
El Paso County’s TIF Process
On 20 September 2018, the El Paso County Board of County Commissioners adopted Resolution No. 18-367, which established a County policy for the review of requests for the use of County Tax Increment Financing (TIF) in any new, amended, or modified urban renewal plan. El Paso County receives TIF requests within the process and purview of the Urban Renewal Authority (URA). A request must be formally sent to the County by the URA requesting the increment allocation of new property and/or sales tax. El Paso County then has 120 days to respond to request, following the internal process below: