"Economic Development Incentive Program"
Benefits to Certified Projects: 5% State Investment Tax Credit for qualifying tangible, depreciable investments 10% Abandoned Building Tax Deduction for costs associated with renovating an abandoned building (building must be at least 75% vacant for previous two years) and a municipal tax incentive - Special Tax Assessment or Tax Increment Financing.
Tax Increment Financing (TIF) - Massachusetts' version of Tax Increment Financing allows municipalities to provide flexible targeted incentives to stimulate job-creating development. The TIF Plan, completed by the municipality, describes proposed public and private investment in the TIF Zone, and is agreed upon by the municipality and all the private owners in the TIF Zone. The municipality and the prospective Certified Project candidate agree to a property tax exemption based on a percentage of the value added through new construction or significant improvement for a period of no less than five and no more than twenty years. The real estate taxes generated by the new increased assessed value, is then allocated by the percentage to one or more of three categories. Each category, if necessary, may change from year to year. The categories are: an exemption from real estate taxes, payment of the real estate taxes, and payment of a betterment fee in lieu of real estate taxes to finance related infrastructure. The percentage of allocation is calculated in a formal, negotiated agreement between the municipality and the Certified Project candidate. TIF serves to pass the tax savings on to property owners for use in project development, while ensuring that the development risk is borne by those parties as well.
District Improvement Financing (DIF)- Recently enacted legislation in Massachusetts established, District Improvement Financing or "DIF". A town or city can use this program to finance infrastruture improvements in a section of a community by dedicating a portion or all of the taxes resulting from increased property values to fund tax-exempt revenue bonds.