Tax Incremental Finance (TIF) - Terminations

​Secs. 60.23(32), 60.85, 66.1105, and 66.1106, Wis. Stats.

For more information, review the TIF Termination web page.

1. When does a municipality terminate a Tax Incremental District (TID)?


2. What should the municipality provide to the Wisconsin Department of Revenue (DOR) when a TID terminates?


3. What is the last year a municipality receives an increment for a terminated TID?


4. If a municipality adopts a TID termination resolution, does the municipality need to pay DOR an administrative certification fee?


5. Can a municipality terminate an existing TID and then create another TID in the same year?


6. When a municipality terminates a TID, what happens if there are still debts?


7. How does the municipality divide excess funds among the overlying taxing jurisdictions?


8. How long does the municipality have to return the excess funds?


9. What if a municipality terminated a TID and has some outstanding expenses to pay before disbursing any extra funds to the other overlying tax jurisdictions?


10. If a municipality adopts a TID termination resolution and notified DOR, can it rescind the termination resolution so it can adopt an affordable housing resolution?


11. What happens to the TID's personal property aid and exempt computer aid when the TID terminates?


12. When does a municipality receive the one-time levy limit adjustment? How is this calculated?

1. When does a municipality terminate a Tax Incremental District (TID)?
   
   

   The municipality must adopt a termination resolution when one of the following occurs:

   • All project costs have been recovered
   • TID reaches its maximum life or extended life date
   • Municipality decides to terminate the TID early for any other reason
   
   


2. What should the municipality provide to the Wisconsin Department of Revenue (DOR) when a TID terminates?
   
   

   1. Within 60 days of adopting the termination resolution or by April 15, whichever is earlier, email tif@wisconsin.gov:

      • Adopted TID Termination Resolution
      • Completed Final TID Accounting Submission Date Agreement (Form PE-223)
   
   

   2. Within six months of adopting the termination resolution:

      • Provide the assessor and real property lister a list of the property for removing the TID number
      • Verify the TID number is removed from all property in the correct tax/assessment roll year
      • Complete the Final Audit; save a copy in the Municipal TID records
      • Electronically file the Final Accounting Report (Form PE-110) using My DOR Government Account
   
   


3. What is the last year a municipality receives an increment for a terminated TID?
   
   

   The date the municipality adopts the termination resolution determines the last year it receives an increment for that TID. For more details see the TID Termination Timeframes table.



4. If a municipality adopts a TID termination resolution, does the municipality need to pay DOR an administrative certification fee?
   
   

   The answer depends on the date the local legislative body adopts the termination resolution:

   • On or before April 15 — municipality does not pay the administrative certification fee that year
   • After April 15 — municipality must pay the administrative certification fee that year​
     
   
   


5. Can a municipality terminate an existing TID and then create another TID in the same year?
   
   

   Yes. If the municipality is over the 12% value limit, the local legislative body must adopt the termination resolution before adopting the creation resolution for another TID. The municipality must remain below the 12% value limit after terminating a TID, to create another TID.

   If the municipality is under the 12% value limit, the local legislative body can adopt a creation resolution for a new TID if the municipality remains below the 12% value limit (including the new TID). The termination resolution for an existing TID can occur at any time in the same year.



6. When a municipality terminates a TID, what happens if there are still debts?
   
   

   The municipality is responsible for any remaining debt.



7. How does the municipality divide excess funds among the overlying taxing jurisdictions?
   
   

   According to state law (sec. 66.1105(6)(c), Wis. Stats.), the municipality must return excess funds based on each taxing jurisdiction's portion of the total tax rate. DOR recommends basing the distribution on the most recent tax levy proportions without the tax increment. Column A of the Tax Increment Worksheet (PC-202) may be used for this calculation. Contact lgs@wisconsin.gov for further assistance.



8. How long does the municipality have to return the excess funds?
   
   

   State law does not provide a specific deadline for distributing excess funds to other taxing jurisdictions. However, the TID's final audit must be completed within one year of the termination resolution. DOR recommends distributing the excess funds when the final audit is completed.



9. What if a municipality terminated a TID and has some outstanding expenses to pay before disbursing any extra funds to the other overlying tax jurisdictions?
   
   

   It is the municipality's responsibility to determine proper administration in this situation. For example, a municipality may set up a temporary escrow account to cover the final expenses. This allows the municipality to complete its final audit.



10. If a municipality adopts a TID termination resolution and notified DOR, can it rescind the termination resolution so it can adopt an affordable housing resolution?
    
    

    The answer depends on whether the termination deadline has passed and whether the TID has reached its maximum life. Municipalities must certify a TID as active or inactive by April 15 under state law (secs. 66.1105(6)(ae) and 60.85(6)(am), Wis. Stats.). Both the termination and rescission must be in the same year based on this deadline. See the TID Termination Timeframes table.

    Rescinding a termination resolution is possible when all items below apply:

    • TID did not reach its maximum life (or extended life) date
    • Municipality paid the administrative certification fee for the year to keep the TID active. If the fee is paid, DOR considers the TID active.
    • April 15 deadline has not passed; the TID number is still coded on the current year assessment/tax roll parcels
    
    

    Rescinding a termination resolution is not possible if any of the items below apply:

    • TID's maximum life (or extended life) date has passed
    • Administrative certification fee deadline has passed and the fee was not paid. Since the fee was not paid, DOR considers this TID terminated.
    • April 15 deadline has passed; the TID number is removed from the current year assessment/tax roll parcels


11. What happens to the TID's personal property aid and exempt computer aid when the TID terminates?
    
    

    Effective with the 2022 payments, based on 2021 Act 61, when a TID receiving these aid payments terminates, DOR transfers the payments to the overlying jurisdictions (ex: municipality, county, school district, technical college).



12. When does a municipality receive the one-time levy limit adjustment? How is this calculated?
    
    

    In the year after the TID's termination year (see TID Termination Timeframes​), a municipality may use a one-time levy limit increase. The levy limit adjustment appears on the Levy Limit Worksheet the same year as the TID's termination year. For example, for a TID with a 2023 termination year, the 2023 Levy Limit Worksheet for taxes payable in 2024 reflects the increase.

    The calculation is the TID's final increment value divided by the municipal TID equalized value without the TID increment, times 50% equals the increase percentage. The final increment and municipal equalized value used in the calculation are from the last year the TID had an equalized value, set the year before the termination year.

    Note: If the municipality has more than one TID with the same termination year, the TID increment values are combined. A TID with a negative increment decreases the total increment used in the calculation.

    Contact lgs@wisconsin.gov for more information.