In Massachusetts, municipal governments are permitted to offer two types of traditional incentives: "Tax Increment Financing (TIF)" and "Special Tax Assessment (STA)."
- Tax Increment Financing (TIF) is a negotiated agreement between a business and the host municipality. The percentage exemption applies to the incremental increase of the accessed value of the parcel, and the agreement may include exemptions on personal property tax.
- An STA is a negotiated agreement between a business and the host municipality that applies to the entire assessed value of a parcel, not just the increment. Current, as well as future local tax revenues, are exempted. An STA's negotiation and approval processes are the same as the TIF process.