Tax Increment Financing

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Tax Increment Financing ("TIF") is a financing method by a local government to subsidize small businesses for redevelopment and improvement projects in community. TIF is another type of a government's investment in a business that potentailly flourish and increasing value of surrounding real estate, which bring profits back to the government in a form of sales and property taxes produced by the new business. This is one kind of market strategy for economic development by attracting businesses that might not otherwise take place. Therefore, TIF usually focuses on areas that are considered underdeveloped.


Example

In 2010, Charlottesville City Council used the TIF to draw a county business into the city. Since the end of 2010, Architect Bill Atwood has been developing the multiple-use Waterhouse project (ongoing as of May 2011). Atwood collaborated with the City officials to attract businesses into the new building by providing tax incentives and financial supports. One business is Worldstrides, which has maintained its base in Albemarle County, considers relocating itself to Waterhouse with the financial incentives by the City.


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References


Web. City panned for using funds to lure firm from Albemarle, Rachana Dixit, Daily Progress, Lee Enterprises, July 31 2010, retrieved May 9 2011.

Web. Using tax incentive, WorldStrides moving from county to city, Rachana Dixit, Daily Progress, Lee Enterprises, August 31 2010, retrieved May 9 2011.

Web. TIFS: a Template for Development in the 2010s, Kenneth E. Powell, Washington Times, Media General, April 22, 2011, retrieved May 9, 2011.



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