FAQs

Montana law allows local governments to borrow against future property tax dollars in localized areas that are in critical need of infrastructure. This tool is called tax increment financing, or TIF. In these specific areas, counties can use TIF to build infrastructure that supports value-adding enterprises.

One of the few areas where TIF is allowed is called a Targeted Economic Development District. TEDD is a designated area adopted by local ordinance that must be zoned for uses in accordance with the Growth Policy and has a development plan in place that supports multiple tenants but is deficient in infrastructure improvements necessary to actualize the development plans. Once an area is designated a TEDD, tax increment from that area can be accrued in a separate account during the duration of the TEDD (initially 15 years with option to extend up to 15 more years to pay back debt service) to be used toward infrastructure improvements in the district.

The Montana Department of Revenue calculates TIF by subtracting the current year taxable value by the base year taxable value to establish the incremental taxable value. The incremental taxable value is then multiplied by the current year mill levy (minus the exempt mills) to calculate the amount due as tax increment to the TEDD.

A special district is a unit of local government authorized to perform specific functions, such as water/wastewater, road maintenance and parks. The special district can levy taxes or fees from properties in the district to pay for the cost of these operations.