Governor Bullock announced the closure of dine-in food service and alcoholic beverage businesses, and other activities that pose enhanced risks to curtail the spread of COVID-19.
The directive permits food delivery and take-out.
The updated directive is in effect until April 10, 2020.
You can find the complete text of the governor’s directive below.
The Department of Revenue is responsible for periodic revenue distributions to local and tribal governments.
For the upcoming revenue distributions, the department has put into place processes to ensure these distributions occur regardless of any COVID-19 impact to the state or department.
The upcoming revenue distributions and applicable dates are as follows:
The Tax Cuts and Jobs Act (TCJA) was enacted on December 22, 2017. The TCJA, in part, makes significant changes to the taxation of foreign-sourced income earned by U.S. corporations and their foreign subsidiaries. The following provides guidance on the treatment for Montana Corporate Income Tax purposes of Internal Revenue Code (IRC) §§ 965 (deemed repatriation of foreign dividends); 951A and 250 (global intangible low-taxed income [GILTI] and the GILTI deduction); and 250 (Foreign-Derived Intangible Income [FDII]). This guidance applies to the 2017 and subsequent tax years.
The TCJA requires a mandatory “deemed repatriation of deferred foreign earnings” as Subpart F income. IRC §965 requires certain foreign corporations to add to Subpart F income the greater of their accumulated post-1986 deferred foreign earnings and profits, and deficits of certain foreign corporations (IRC §965 Inclusion Income). These taxpayers are then able to deduct a portion of the IRC §965 Inclusion Income (IRC §965 Deduction). While the deemed repatriation is required to be reported in the 2017 tax year, a taxpayer may make a federal election to pay the liability over eight years. Corporations that have IRC §965 income must include an IRC §965 Transition Tax Statement (Transition Tax Statement) with their federal return.
All taxpayers must treat IRC §965 Inclusion Income as Subpart F income for Montana purposes and attach federal Form 965 (Transition Tax Statement) to their Montana return. Any §965 income recognized as IRC §78 gross up for federal purposes will also be recognized as §78 gross up income for Montana purposes.
To properly reflect the §965 inclusion income on the Montana return for taxpayers who file on a water’s edge basis, add the total amount of income reported on line 1 of federal Form 965 on Montana Form CIT page 3, line 2i “other additions.” §15-31-325(4), MCA, allows a corresponding deduction as a foreign dividend deduction on Montana Form CIT, page 3, line 3g “other reductions” totaling 80% of the §965 inclusion income added back for Montana purposes.
However, if any of the §965 inclusion income included in “other additions” is received from subsidiaries included in the Montana water’s edge filing, such as those incorporated in tax haven countries listed in §15-31-322, MCA, a 100% deduction of the total amount of inclusion income related to these entities is allowed as an intercompany dividend elimination rather than 80%. This amount should be reported on page 3, line 3g “other reductions.”
Furthermore, if any of the §965 inclusion income included in “other additions” is received by 80/20 companies, a 100% deduction of the total amount of inclusion income related to these entities is allowed rather than 80% pursuant to §15-31-322, MCA. This amount should be reported on page 3, line 3g “other reductions.”
To properly reflect §78 gross up income related to the §965 income on the Montana return for taxpayers who file on a water’s edge basis, add the total amount of income reported on line 4a of the federal Form 965 on Montana Form CIT page 3, line 2i “other additions.” Pursuant to §15-31-325(5), MCA, a 100% corresponding deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included in “other additions.”
The §965 inclusion income is already properly reflected in federal taxable income, line 28 of federal Form 1120. The §965 inclusion income received by members of the Montana water’s edge group will not require a state addback. Pursuant to §15-31-325(4), MCA, a corresponding deduction is allowed as a foreign dividend deduction on Montana Form CIT, page 3, line 3g “other reductions” totaling 80% of the §965 inclusion income received by members of the Montana water’s edge group (figured without regard to any §78 gross up income). This deduction is allowed rather than the amount shown on federal Form 1120, Schedule C, line 15, column c. §78 gross up that is included in the calculation of §965 inclusion income must be removed from the §965 deduction allowable for Montana purposes, as the gross up deduction is calculated elsewhere as described below.
However, if any of the §965 inclusion income is received from subsidiaries included in the Montana water’s edge filing, such as those incorporated in tax haven countries listed in §15-31-322, MCA, a 100% deduction of the total amount of inclusion income related to these entities is allowed as an intercompany dividend elimination rather than 80%. This amount should be reported on page 3, line 3g “other reductions.”
Income of 80/20 companies is excluded from the calculation of Montana taxable income on Montana Form CIT, page 3, line 3e; consequently, §965 inclusion income, including any §78 gross up, received by an 80/20 company is already properly excluded so no deduction is allowed.
§78 gross up income related to the §965 income is already properly reflected in federal taxable income, line 28 of federal Form 1120. This gross up income received by members of the Montana water’s edge group will not require a state addback. Pursuant to §15-31-325(5), MCA, Montana water’s edge filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to §965 income is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by members of the Montana water’s edge group.
To properly reflect the §965 inclusion income on the Montana return for taxpayers who file on a worldwide basis, add the total amount of income reported on line 1 of the federal Form 965 on Montana Form CIT page 3, line 2i “other additions.” A corresponding deduction is allowed as an intercompany dividend elimination on Montana Form CIT, page 3, line 3g “other reductions” totaling 100% of the §965 inclusion income added back for Montana purposes.
If any of the §965 inclusion income is received from subsidiaries that are not included in the Montana worldwide filing, see instructions for Limited Combination filers below.
To properly reflect §78 gross up income related to the §965 income on the Montana return for taxpayers who file on a worldwide basis, add the total amount of income reported on line 4a of the federal Form 965 on Montana Form CIT page 3, line 2i “other additions.” A 100% corresponding deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included in “other additions.”
The §965 inclusion income is already properly reflected in federal taxable income, line 28 of federal Form 1120. The §965 inclusion income received by members of the Montana worldwide group will not require a state addback. A corresponding deduction is allowed as an intercompany dividend elimination on Montana Form CIT, page 3, line 3g “other reductions” totaling 100% of the §965 inclusion income received from members of the Montana worldwide group (figured without regard to any §78 gross up income). This deduction is allowed rather than the amount shown on federal Form 1120, Schedule C, line 15, column c. §78 gross up that is included in the calculation of §965 inclusion income must be removed from the §965 deduction allowable for Montana purposes, as the gross up deduction is calculated elsewhere as described below.
§78 gross up income related to the §965 income is already properly reflected in federal taxable income, line 28 of federal Form 1120. This gross up income received by members of the Montana worldwide group will not require a state addback. A deduction is allowed to Montana taxpayers filing on a worldwide basis for 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to §965 income is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by members of the Montana worldwide group.
If any of the §965 inclusion income is received from subsidiaries that are not included in the Montana worldwide filing, see instructions for Limited Combination filers below.
To properly reflect the §965 inclusion income on the Montana return for taxpayers who file on a separate company, domestic or limited combination basis, add the total amount of income reported on line 1 of the federal Form 965 that was received by the entity or group of entities included in the Montana return. This amount should be reported on Montana Form CIT page 3, line 2i “other additions.” A corresponding deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling only those amounts reported on line 3 of the federal Form 965 that are associated with the entity or group of entities included in the Montana return.
However, if any of the §965 inclusion income is received from subsidiaries that are included in the Montana limited combination filing, a 100% deduction of the total amount of inclusion income related to these entities is allowed as an intercompany dividend elimination rather than the amount reported on federal Form 965.
To properly reflect §78 gross up income related to the §965 income on the Montana return for taxpayers who file on a separate company, domestic or limited combination basis, add the total amount of income reported on line 4a of the federal Form 965 that is received by the entity or group of entities included in the Montana return, on Montana Form CIT page 3, line 2i “other additions.” A 100% corresponding deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included in “other additions.”
The §965 inclusion income is already properly reflected in federal taxable income, line 28 of federal Form 1120. The §965 inclusion income will not require a state addback. A corresponding deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling only those amounts reported on federal Form 1120, Schedule C, line 15, column (c) that are received from the entity or group of entities included in the Montana return (figured without regard to any §78 gross up income). This deduction is allowed rather than the amount shown on federal Form 1120, Schedule C, line 15, column c. §78 gross up that is included in the calculation of §965 inclusion income must be removed from the §965 deduction allowable for Montana purposes, as the gross up deduction is calculated elsewhere as described below.
However, if any of the §965 inclusion income is received from subsidiaries that are included in a Montana limited combination filing, a 100% deduction of the total amount of inclusion income related to these entities is allowed as an intercompany dividend elimination rather than the amount reported on federal Form 1120, Schedule C.
§78 gross up income related to the §965 income is already properly reflected in federal taxable income, line 28 of federal Form 1120. This gross up income will not require a state addback. A deduction is allowed to Montana taxpayers for 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to §965 income is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by the entity or group of entities included in the Montana return.
Beginning with tax year 2018, the TCJA created this new category of foreign income under IRC §951A. GILTI requires the U.S. owner of a CFC to potentially include a portion of the CFC’s earnings in the U.S. owner’s federal taxable income. As deemed income to the U.S. owner, GILTI is comparable to Subpart F income. The TCJA also created a deduction related to the GILTI under IRC §250 (GILTI deduction).
For Montana Corporate Income Tax purposes, Montana considers GILTI a foreign dividend that is included in the owner’s federal taxable income. All taxpayers must attach federal Form 8992 (U.S. Shareholder Calculation of GILTI) and federal Form 8993 (§250 Deduction for FDII and GILTI) to their Montana return. Any GILTI recognized as IRC §78 gross up for federal purposes will also be recognized as §78 gross up income for Montana purposes.
The GILTI is already properly reflected in federal taxable income, line 28 of federal Form 1120. No state addback is required. Pursuant to §15-31-325(4), MCA, a corresponding deduction is allowed as a foreign dividend deduction. The allowable deduction totals 80% of GILTI received by members of the Montana water’s edge group, figured without regard to any §78 gross up income included in the federal calculation. The deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions.” This deduction is allowed rather than the amount shown on federal Form 1120, Form 8993, Part IV, line 9. §78 gross up that is included in the calculation of GILTI must be removed from the GILTI deduction allowable for Montana purposes, as the gross up deduction is calculated elsewhere as described below.
If any of the GILTI is received from subsidiaries included in the Montana water’s edge filing, such as those incorporated in tax haven countries listed in §15-31-322, MCA, a 100% deduction of the total amount of GILTI (figured without regard to any §78 gross up income included in the federal calculation) related to these entities is allowed as an intercompany dividend elimination rather than 80%. This amount should be reported on page 3, line 3g “other reductions.”
§78 gross up income related to GILTI is already properly reflected in federal taxable income, line 28 of federal Form 1120. This gross up income received by members of the Montana water’s edge group will not require a state addback. Pursuant to §15-31-325(5), MCA, Montana water’s edge filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to GILTI is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by members of the Montana water’s edge group.
Income of 80/20 companies is excluded from the calculation of Montana taxable income on Montana Form CIT, page 3, line 3e; consequently, any of the GILTI received, including §78 gross up associated with the GILTI, by an 80/20 company is already properly excluded so no deduction is allowed.
The GILTI is already properly reflected in federal taxable income, line 28 of federal Form 1120. No state addback is required. A corresponding deduction is allowed as an intercompany dividend elimination. The allowable deduction totals 100% of GILTI received from members of the Montana worldwide group, figured without regard to any §78 gross up income included in the federal calculation. The deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions.” This deduction is allowed rather than the amount shown on federal Form 1120, Form 8993, Part IV, line 9. §78 gross up that is included in the calculation of GILTI must be removed from the GILTI deduction allowable for Montana purposes, as the gross up deduction is calculated elsewhere as described below.
§78 gross up income related to GILTI is already properly reflected in federal taxable income, line 28 of federal Form 1120. This gross up income received by members of the Montana worldwide group will not require a state addback. Montana worldwide filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to GILTI is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by members of the Montana worldwide group.
If any of the GILTI is received from subsidiaries that are not included in the Montana worldwide filing, see instructions for Limited Combination filers below.
The GILTI is already properly reflected in federal taxable income, line 28 of federal Form 1120. No state addback is required. A corresponding deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling only those amounts reported on federal Form 1120, Form 8993, Part IV, line 9 (figured without regard to any §78 gross up income included in the federal calculation) associated with the entity or group of entities included in the Montana return. §78 gross up that is included in the calculation of GILTI must be removed from the GILTI deduction allowable for Montana purposes, as the gross up deduction is calculated elsewhere as described below.
However, if any of the GILTI is received from subsidiaries that are included in the Montana limited combination filing, a 100% deduction of the total amount of GILTI (figured without regard to any §78 gross up income) related to these entities would be allowed as an intercompany dividend elimination rather than the amount reported on federal Form 8993.
Any §78 gross up income related to GILTI received from the entity or group of entities included in the Montana return is already properly reflected in federal taxable income, line 28 of federal Form 1120. This gross up income will not require a state addback. Montana filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to GILTI is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by the entity or group of entities included in the Montana return.
For tax years beginning after December 31, 2017, the TCJA created this new deduction for corporations under IRC §250. The deduction relates to certain federal taxable income to which a special federal tax rate is intended to apply. FDII is not considered a foreign dividend for Montana Corporate Income Tax purposes. To claim a deduction for FDII, all taxpayers must attach federal Form 8993 (§250 Deduction for FDII and GILTI) to their Montana return.
FDII is already properly reflected in federal taxable income, line 28 of federal Form 1120. A deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount reported on federal Form 1120, Form 8993, Part IV, line 8 (figured without regard to any §78 gross up income included in the federal calculation) that represents amounts related to those entities included in the Montana water’s edge group. §78 gross up that is included in the calculation of the §250 FDII deduction must be removed from the calculation for Montana purposes, as the gross up deduction is calculated elsewhere for Montana purposes as described below.
§78 gross up income related to FDII is already properly reflected in federal taxable income, line 28 of federal Form 1120. Pursuant to §15-31-325(5), MCA, Montana water’s edge filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to FDII is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by members of the Montana water’s edge group.
If any of the federal FDII deduction is related to entities excluded from the Montana water’s edge group, such as an 80/20 company, the deduction from federal Form 1120, Form 8993, Part IV, line 8 attributable to these entities is not allowed, as the income related to these entities has already been excluded.
FDII is already properly reflected in federal taxable income, line 28 of federal Form 1120. A deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount reported on federal Form 1120, Form 8993, Part IV, line 8 (figured without regard to any §78 gross up income included in the federal calculation) that represents amounts related to those entities included in the Montana worldwide group. §78 gross up that is included in the calculation of the §250 FDII deduction must be removed from the calculation for Montana purposes, as the gross up deduction is calculated elsewhere for Montana purposes as described below.
§78 gross up income related to FDII is already properly reflected in federal taxable income, line 28 of federal Form 1120. Montana worldwide filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to FDII is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by members of the Montana worldwide group.
If any of the federal FDII deduction is related to entities excluded from the Montana worldwide filing, see instructions for Limited Combination filers below.
FDII is already properly reflected in federal taxable income, line 28 of federal Form 1120. A deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling only those amounts reported on federal Form 1120, Form 8993, Part IV, line 8 (figured without regard to any §78 gross up income included in the federal calculation) that represents amounts related to the entity or group of entities included in the Montana return. §78 gross up that is included in the calculation of the §250 FDII deduction must be removed from the calculation for Montana purposes, as the gross up deduction is calculated elsewhere for Montana purposes as described below.
§78 gross up income related to FDII is already properly reflected in federal taxable income, line 28 of federal Form 1120. Montana filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to FDII is included in this allowable deduction. The Montana total gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by the entity or group of entities included in the Montana return.
If any of the federal FDII deduction is related to entities excluded from the Montana domestic or limited combination filing, the deduction from federal Form 1120, Form 8993, Part IV, line 8 attributable to these entities is not allowed, as the income related to these entities has already been excluded.
Unfortunately, some groups and individuals take advantage of Montanans by pretending to be the Montana Department of Revenue or the U.S. Internal Revenue Service. Scam artists over the years have tried many ways to hack into computers or to get money or personal information from Montanans who believe they are responding to legitimate calls, emails, or other inquiries.
While tax scams seem to peak during the tax filing season in the spring, they persist year-round. With technology always changing, scammers are always trying new ways to get your information or your money.
If you are unsure whether a caller is actually from the department, hang up and contact our Call Center at (406) 444-6900. We will be able to tell you if the call originated at the department.
If you are the target of a scam related to federal taxes, you can report them to the Internal Revenue Service.
We do everything we can to protect your refund. Here are three things you can do to help prevent fraud and get your refund more quickly:
It can take up to 90 days to issue your refund.
Learn more about Individual Income Tax Refunds.
Scammers claiming to be with the Department of Revenue have begun “spoofing” the department’s customer service line, (406) 444-6900, in their Caller ID information.
The department does not use robo-callers and does not threaten taxpayers with criminal action.
If you receive one of these calls, please contact the Montana Department of Justice Office of Consumer Protection.
Tax Increment Financing (TIF) is a way for certain districts to use property tax revenue to fund new development. It works by separating taxable value into base and increment values, so that revenue from the base value continues to go to the regular taxing jurisdiction, but as taxes increase over the years, that growth—the increment—go to the TIF to pay for development activities within the TIF district.
The development of TIF districts is authorized by 7-15-4282, MCA.
Tax Increment Financing may be used to pay for a variety of development activities within the TIF district including:
(See 7-15-4288, MCA for more details)
Upon expiration of the TIF, the increment is released back to the local governments and the state. State and local governments use the released increment as newly taxable property for 15-10-420, MCA purposes. Schools treat the released increment as an increase in their tax base and adjust their mill levies accordingly.
TIF districts expire on the the 15th year following its adoption, or upon the full payment of all bonds for which tax increment revenue have been pledged, whichever is later. TIFs may extend their expiration date by securing bonds that pledge post-15th-anniversary-increment as repayment. No term extensions are allowed for bonds secured after the 15th anniversary of tax increment provisions. For example, if a TIF was authorized January 1, 2000, it has until January 1, 2015 (its 15th anniversary) to pass bonds secured by future increment to extend the expiration date. Additional bonds may be passed after the 15th anniversary but these would not extend the life of a TIF.
Please Note:
TIF districts collect the incremental tax revenue from all the local and state mills except the statewide six-mill levy that is used to fund the university system.
Please Note:
All notification and documentation for the creation or amendment of an URD or TEDD must be emailed to DORTIFinfo@mt.gov or mailed to the following address:
Department of RevenueGeneral questions regarding TIF districts can be directed to:
A Tax Increment Finance district is always set up as one or more distinct levy districts.
The department recommends setting up TIF districts through a process similar to applying a special district flat fee. Calculate the base and increment percentage for the district as a whole and then apply the base or increment percentage globally to all of the records in the affected TIF levy districts.
Administering the TIF in this way would avoid tax bills with negative increments. It would also ensure that all properties within the TIF district contribute proportionally to the TIF fund.
The following tables demonstrate this concept.
Base Taxable Value is the taxable value from the year designated as the base year in the TIF district documentation.
| Current Taxable Value | Base Taxable Value | Increment Taxable Value | |
|---|---|---|---|
| TIF Levy District 1 | Current Year Taxable Value | Taxable Value from the Base Year | Current Taxable Value minus Base Taxable |
| TIF Levy District 2 | Current Year Taxable Value | Taxable Value from the Base Year | Current Taxable minus Base Taxable |
| Total TIF District | Sum of TIF Levy 1 & TIF Levy 2 Current Taxable Value | Sum of TIF Levy 1 & TIF Levy 2 Base Taxable Value | Sum of TIF Levy 1 & TIF Levy 2 Increment Taxable Value |
from the table above.| Tax Increment Finance District | Levy District Code | Current Taxable | Base Taxable | Increment Taxable |
|---|---|---|---|---|
| TIF Levy District 1 | T1 | 7,980,687 | 4,581,568 | 3,399,119 |
| TIF Levy District 2 | T2 | 3,201,196 | 2,464,904 | 736,292 |
| Entire TIF District | T1/T2 | 11,181,883 | 7,046,472 | 4,135,411 |
General setup process:
Base taxable value is the total taxable value in the TIF district in the year prior to the existence of the district. Incremental taxable value is the taxable value that exceeds the base taxable value for the district in any year. For example, if in the year a TIF is created, the base year and current year taxable value are equal to $1 million, there would be no incremental taxable value and no TIF revenue.
| TIF Taxable Value | Base Year |
|---|---|
| TIF Revenue | $0 |
| Current Year Taxable Value | $1,000,000 |
| Base Taxable Value | -$1,000,000 |
| Increment Taxable Value | $0 |
| Millage Rate | ×0.500 |
If in the second year of existence of a TIF district, its taxable value grew by $100,000, then the incremental value in that year would be $100,000. If the total millage rate in the TIF was 0.500, the taxes generated from the increment (TIF revenue) would be $50,000.
| TIF Taxable Value | Base Year | Year 2 |
|---|---|---|
| TIF Revenue | $0 | $50,000 |
| Current Year Taxable Value | $1,000,000 | $1,100,000 |
| Base Taxable Value | ($1,000,000) | ($1,000,000) |
| Increment Taxable Value | $0 | $100,000 |
| Millage Rate | ×0.500 | ×0.500 |
If in the third year of the TIF district, the taxable value shrinks to $800,000, due to property devaluation, demolition or removal of structures, or the like, then the incremental value would be negative ($200,000), meaning there would be no incremental value for the third year. When a TIF district’s incremental value is less than zero, no revenue is provided to the district.
| TIF Taxable Value | Base Year | Year 2 | Year 3 |
|---|---|---|---|
| TIF Revenue | $0 | $50,000 | $0 |
| Current Year Taxable Value | $1,000,000 | $1,100,000 | $800,000 |
| Base Taxable Value | ($1,000,000) | ($1,000,000) | ($1,000,000) |
| Increment Taxable Value | $0 | $100,000 | ($200,000) |
| Millage Rate | ×0.500 | ×0.500 | ×0.500 |
If in the fourth year the taxable value of the TIF grows from $800,000 to $1,200,000, due to redevelopment or the like, then the increment would increase to $200,000. If the millage rate was 0.500, the district’s revenue would be $100,000 in this year.
| TIF Taxable Value | Base Year | Year 2 | Year 3 | Year 4 |
|---|---|---|---|---|
| TIF Revenue | $0 | $50,000 | $0 | $100,000 |
| Current Year Taxable Value | $1,000,000 | $1,100,000 | $800,000 | $1,200,000 |
| Base Taxable Value | ($1,000,000) | ($1,000,000) | ($1,000,000) | ($1,000,000) |
| Increment Taxable Value | $0 | $100,000 | ($200,000) | $200,000 |
| Millage Rate | ×0.500 | ×0.500 | ×0.500 | ×0.500 |
Whether a property is in a TIF district should not affect the property tax bill, only the distribution of the tax dollars when they are received.
The example shows two properties of equal value belonging to the same set of taxing jurisdictions, one located within the TIF district and one outside. This illustrates how the TIF district would get applied at the individual property level. The taxes collected are allocated differently, but both properties pay the same amount.
| Taxing Jurisdiction | Mills Levied |
|---|---|
| Total | 500 Mills |
| Local Elemntary | 75 Mills |
| Local High School | 100 Mills |
| City | 99 Mills |
| County | 125 Mills |
| State Wide | 95 Mills |
| University | 6 Mills |
| Property A - In the TIF District | ||
|---|---|---|
| Total Taxes | $1,500.00 | |
| Taxable Value | Base to Taxing Jurisdictions (Taxable Value × Base %) | Increment Value to TIF Fund (Taxable Value - Base) |
| 3,000 | 1,891 | 1,109 |
| Local Elementary | $141.83 | $83.18 |
| Local High School | $189.10 | $110.90 |
| City | $187.21 | $109.79 |
| County | $236.38 | $138.63 |
| State Wide | $179.65 | $105.36 |
| University | $18.00 | $0.00 |
| Total | $952.15 | $547.85 |
| Property B - Not in the TIF District | |
|---|---|
| Total | $1,500.00 |
| Taxable Value | All to Taxing Jurisdictions |
| 3,000 | 3,000 |
| Local Elementary | $225.00 |
| Local High School | $300.00 |
| City | $297.00 |
| County | $375.00 |
| State Wide | $285.00 |
| University | $18.00 |
