Minnesota first authorized tax increment financing (or TIF) in 1947. A number of general and special laws enacted between 1947 and 1974 expanded the abilities of local governments to use TIF. Between 1974 and 1979, the number of active TIF districts expanded rapidly, and in 1979, the authority granted under prior TIF laws was consolidated and modified with the enactment of the Minnesota Tax Increment Financing Act (Laws 1979, ch. 322).
Following rapid expansion in the use of TIF and increasing legislative scrutiny, the legislature undertook a series of reforms from 1988 to 2000. In 2001, general property tax reform reduced the property tax classification rates applicable to most property included in TIF districts, reducing the amount of increment generated by then active districts. The legislature has made occasional, more modest changes to TIF since 2001.
The graphs below display the inflation-adjusted amounts of increment generated by TIF districts and the share of the statewide property tax base captured by TIF from 1974 to 2025.
Tax Increment in Real Dollars (1974-2025)
TIF Captured Value as a Percentage of Taxable Market Value (1974-2025)
March 2026