The Economic Development Incentive Program is designed as a three-way partnership between an expanding company, the state government and the local municipal government to drive economic development across the Commonwealth. Municipalities located in Economic Target Areas may enter into local real estate property tax exemption agreements with a potentially expanding or relocating business.  These contractual agreements are negotiated and executed at the local level through City Council or Town Meeting vote and are then presented to the Economic Assistance Coordinating Council for final consideration.  
 

What is a Tax Increment Financing (TIF) Agreement?

A TIF Agreement is a local real estate property tax exemption negotiated and executed between a host municipality and an expanding or relocating company.  The business must be making a significant private investment that increases the base assessed value of the property as the tax abatement is given only on the incremental increase in the property value.

Per the M.G.L. 40 § 59,   Tax Increment Financing Agreements:

  • Are located within an Economic Target Area & Economic Opportunity Area.
  • May be associated with an EDIP Certified Project Application, but also may apply as a Tax Increment Financing Only Project.
  • Have a minimum duration of 5 years and a maximum duration of 20 years.
  • Have an incremental real property (and personal property tax if the municipality so chooses) tax exemption between 5% and 100%.

see printable TIF Agreement Mechanics pdf format of tif agreement mechanics

 What is a Special Tax Assessment (STA)?

A STA is a local real estate property tax exemption negotiated and executed between a host municipality and an expanding or relocating company.  A STA exempts a percentage of the total property tax liability of the real property of a parcel. 

Per M.G.L. 23A § 3E, Special Tax Assessments:

  • Are located within an Economic Target Area & Economic Opportunity Area.
  • Have a minimum duration of 5 years and are structured with the following exemption schedule:
   Year of AgreementTax Assessment
    Year 1100% tax abatement on the real property of the parcel
    Year 275-100% tax abatement on the real property of the parcel
    Year 350-100% tax abatement on the real property of the parcel
    Year 425-100% tax abatement on the real property of the parcel
    Year 5- onward (as negotiated)0-100% tax abatement on the real property of the parcel