How Tax Increment Financing Works in Bedford
Tax Increment Financing, commonly known as TIF is a legislation enacted program enabled by state law and must operate within the parameters established by the state government. Under TIF, landowners may be granted property tax exemptions for a portion of the tax increment. The amount of tax relief applies only to the new value created by the investment on a site, not any portion of assessed value that existed on the property prior to the new development. The property owner must commit to specific job growth over the term of the TIF agreement. If the goals are not met, the TIF is nullified. A municipality may enter into a TIF Agreement with a landowner for a maximum term of 20 years.
During the past 10 years, Bedford has had TIF agreement with 4 companies; Anika Therapeutics, FujiMicrodisk, iRobot and Mabbett & Associates.
TIF provides a direct upfront benefit to a developer in the form of tax relief. The money saved on taxes helps pay the project’s construction costs. Depending on the size and location of the project, developers utilizing TIF benefits can also often access other state financial incentives such as Investment Tax Credits, Abandoned Building Tax Deductions and Research and Development Tax Credits.
TIF Application forms and additional information are available on the Massachusetts Office of Business Development Website.
Once the TIF Application is completed, the developer meets with the Town of Bedford to review the TIF agreement. Once the agreement is finalized, the Bedford Selectmen then vote to approve or disapprove the TIF. If the TIF is approved by the Selectmen, then it goes to Bedford Town Meeting for approval.
The length of time to approve a TIF depends on the time of year. Bedford Town meeting are normally held in March and October of each year. After Town approval, the state’s Economic Development Coordinating Council (EDCC) must give final approval. The EDCC meets four times a year.
For more information on moving to or expanding in Bedford, please contact The Bedford Chamber of Commerce.
This article is intended as a guide only. The contents do not constitute legal advice and should not be relied upon as such.