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Captured Tax Capacity <br />Original Tax Capacity <br /> <br />This document provides a primer on the use of tax increment financing (TIF) for Minnesota cities. It is <br />intended to provide a basic understanding of the concepts related to the use of TIF. <br /> <br />Original Tax Capacity <br /> <br />The tax capacity (taxable) value of the parcels within a tax increment financing district at the time the district <br />is created. Also known as the "base" value. While this amount is typically frozen over the life of the TIF <br />district, certain factors may change the Original Tax Capacity. These factors include, but are not limited to, <br />changes in the classification of the property. <br /> <br />Captured Tax Capacity <br /> <br />The difference between the current tax capacity of parcels within the TIF district and the Original Tax Capacity. <br />This value is captured by the City and serves as the basis for producing tax increment. <br /> <br />Original Tax Rate <br /> <br />The total property tax rote for all jurisdictions (with taxing authority over property in the District) at the time <br />the TIF District is created. <br /> <br />Tax Increment <br /> <br />Property tax revenues created by Captured Tax Capacity multiplied by the lesser of the current tax rate or the <br />Original Tax Rate. <br /> <br />EHLERS & ASSOCIATES, INC. 3060 Centre Pointe DHve, Roseville, Minnesota 55113 651.697.8500 <br /> <br /> <br />