St. John's is eliminating its Business Occupancy Tax. What does that mean?

Last night, Councillor Danny Breen announced what the City has been planning, on and off, for the past twenty years: the elimination of the Business Occpancy Tax, or the tax that any business pays for occupying space in the city.

Right now the City charges two types of "Non-Residential" tax: Business Realty and Business Occupancy. Property owners pay the former, and business owners pay the latter. (You and I pay Residential Property Tax.) 

The Business Occupancy Tax owed by a business is based on the square footage being used, as well as the value of the property that the space is in. In other words the bigger the space you use, the higher the tax. And if you are in a high-value building, the tax is higher still.

This has been deemed inequitable and difficult to administer, so they're dropping the Business Occupancy Tax and increasing the Business Realty (property) tax rate. This means that businesses will not directly pay a tax to the city for occupying space, but will likely see a new fee from their landlords who are now paying a much higher tax.

The City is also changing the tax collection frequency from twice-yearly to quarterly, and in arrears. So in other words, now property owners will pay taxes every three months (with 30 days grace) for the three months that have past.

If you're wondering what will happen if a property owner has vacant space, and thus can't charge a business for its increased tax, the city has an answer: Commercial property owners will be able to request exceptions to their rate if business space in their property was vacant for all or part of any payment period.

Want to learn more?

Written by Dave Lane at 22:26
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