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What is a TAD?

A Tax Allocation District is a clearly designated geographical area identified by a local government for redevelopment. The areas are generally underdeveloped, often due to infrastructure or environmental problems.

TADs are typically used to:

• Revitalize blighted areas.
• Reuse old industrial or military facilities.
• Restore environmentally contaminated areas.
• Promote economic growth in underdeveloped areas.

If the area is approved by the local government, tax allocation bonds may be issued and the proceeds used to finance improvements to redevelop designated areas. Following redevelopment, the property will generate increased tax revenues. The increased tax revenues (incremental taxes) are then placed in a special fund and used to pay the interest and repay the principal on the bonds. This technique, known as tax increment financing, has been widely used around the country. The term "tax allocation district," however, is specific to Georgia.

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