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What is the difference between a value increment and a tax increment?
Value increment – difference between the Tax Incremental District's (TID's) base value and current value. It is the property value that generates the tax increment.
Tax increment – taxes levied by all overlying taxing jurisdictions on the value between the TID's base value and current value. The municipality that maintains the TID receives the taxes and must use the funds to pay for the approved project costs.
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Who certifies the value increment annually?
The Wisconsin Department of Revenue (DOR) certifies the annual value increment by August 15 each year. DOR certifies the increment only if the municipality pays a $150 administrative fee for each active TID by April 15. If the fee is not paid, DOR will not certify the municipality's increment for that year.
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When does the municipality receive its first tax increment on a new creation?
The date the municipality adopts the creation resolution determines when it will receive its first increment. The
TID Creation Timeframes table explains the timing of the first tax increment.
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Does residential development in a TID produce value increment?
Yes. All taxable property that increases a TID's value becomes part of the increment.
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If personal property is located within a TID, is the personal property value included in the TID base value? In the TID current value?
2023 Act 12 exempted personal property from taxation, effective January 1, 2024. Starting in 2024, a TID’s current year value does not include personal property.
TIDs created in 2023 and before include taxable personal property in the base value. A municipality may request DOR remove the personal property value from a TID’s base value. Email the Personal Property Adjustment Workbook to tif@wisconsin.gov. DOR will review and adjust the base value. For more information review the
TIF Base Value Adjustment due to Personal Property Exemption web page.
TIDs created in 2024 and later do not include personal property in the base value.
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If a municipality received enough increment to pay the debt incurred for the district, can the excess increment be used for additional projects?
Yes. A municipality may use excess increment for additional projects if the expenditure period has not expired; however, only projects in the approved plan may be paid with TIF funds. If the project is not in the approved plan, the municipality must complete a project plan amendment and email the required documents to tif@wisconsin.gov.
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If a TID terminates after April 15, is an increment still added to the tax levies in December?
Yes. If the municipality terminates a TID after April 15, DOR will certify a value increment for that year. The tax increment for that year must be levied and collected. See the
TID Termination Timeframes table for more information.
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Should a municipality collect the entire final tax increment in the TID's last year if it is not all needed?
Yes. A municipality must collect the entire final tax increment to maintain equal taxation. State law (sec
66.1105(6)(c), Wis. Stats.), requires the municipality to return any surplus to the TID's overlying taxing jurisdictions.
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Can a municipality choose not to levy the increment on the tax roll?
No. Wisconsin's constitution has a uniformity clause, which requires uniform property taxation. By not levying the increment, the taxpayers in that municipality would be taxed at a different rate (for school, technical college, or county) than the other taxpayers.
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How is the tax increment calculated using the tax rate?
Step a) First, a municipality must determine the tax rate per $1,000 of property value.
Example: The tax rate is $23.73. This amount is then apportioned to the taxing jurisdictions for that municipality.
| Taxing Jurisdiction | Tax Rate | Percent of Total Rate |
|---|
| County | 3.81 | 16.05% |
| Municipality | 9.52 | 40.12% |
| School District | 10.36 | 43.66% |
| Technical College | 0.04 | 0.17% |
| Total | $23.73 | 100% |
Step b) Multiply the tax rate by the value increment DOR certifies to determine the actual dollars available to pay eligible project costs.
Example: This is a TID with a 2020 creation year. Changes to the increment value or tax rate result in a different tax increment.
| Year Assessed | Year Tax Increment Received | Increment Value | Tax Rate Percent | Tax Increment |
|---|
| 2020 | 2021 | 0 | .02373 | 0 |
| 2021 | 2022 | 1,500,000 | .02373 | 35,595 |
| 2022 | 2023 | 1,500,000 | .02401 | 36,015 |
| 2023 | 2024 | 1,800,000 | .02401 | 43,218 |
Every municipality with a TID must complete the Tax Increment Worksheet (Form PC-202) each December to calculate the actual tax increment based on the municipality's levy amount. See the detailed example in the
TIF Manual, How TIF Works.
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How does the Wisconsin Department of Revenue (DOR) notify a municipality of its increment value?
Each year (on August 15 and October 1), DOR posts TIF reports that list each TID's value increment to our website.
Posted reports:
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How long are DOR reports available?
DOR maintains statewide TID reports for 7 years. All available reports are posted on our website. It is the municipality's responsibility to save information on its TIDs.