City Introducing Changes to Commercial Tax System
The City of St. John's is moving forward to blend the Business Realty and Business Occupancy Tax for the 2013 fiscal year, which will result in the elimination of the Business Occupancy Tax. This change to the business tax system will take effect Jan. 1, 2013.
"We are still finalizing the details regarding the bylaw, but I am very pleased to see us finally moving forward with this important project," says Ward 1 Councillor Danny Breen, Chair, Finance and Administration Standing Committee. "This has been 20 years in the making and we have worked with the business community through the Tax Blending Steering Committee to ensure that we addressed their concerns. At the end of the day what we will have is a more streamlined and efficient taxation system for commercial property."
The elimination of the Business Occupancy Tax will require the City to increase its Business Realty Tax to recover revenue previously generated by the Business Occupancy Tax. Provincial amendments to the City of St. John's Act and the City of St. John's Municipal Taxation Act allow commercial property owners leasing property to a business to collect increased fees from their tenants in order to offset any tax increase.
"For the vast majority of businesses this will have little to no effect, as they previously paid both Business Realty Tax and Business Occupancy Tax," says Councillor Breen. "Our objective is to collect the same amount of revenue, but through a more efficient and equitable system."
The key factors which influenced the City's decision to eliminate the Business Occupancy Tax include:
- Eliminating the Business Occupancy Tax makes the commercial tax system more equitable as all business will pay the same mil rate.
- Increased efficiency at City Hall resulting from not having to produce and administer the Business Occupancy tax rolls and tax collections.
- An overall simplified tax system.
An initial letter and pamphlet is going in the mail today to all accounts within the City currently paying Business Occupancy and Business Realty Tax. Once the bylaw has been passed an information package with specific details will also be mailed to these groups.
"I am sure that businesses and property owners in the City have many questions," says Councillor Breen. "We are grateful for their patience and once the bylaw is finalized we will be able to address any questions they may have."
For further information:
Jennifer Mills
Communications Officer
City of St. John's
Phone: (709) 570-2037
Cell: (709) 690-7586
E-mail: jmills@stjohns.ca
Danny Breen
Ward 1 Councillor
Chair, Finance and Administration Committee
City of St. John's
Phone: (709) 576-2332
E-mail: dbreen@stjohns.ca