Commercial base tax is forthcoming
by Phil Ambroziak
All’s fair in love and taxes.
That’s why City of Meadow Lake officials have taken the first steps necessary in eventually introducing a new tax system designed to level the playing field for all commercial and industrial businesses operating within the municipality.
During the July 14 meeting of city council, approval was given to a motion calling for city staff to notify commercial, industrial and hotel/motel property owners of a new base tax per commercial lot system that will be introduced in 2015.
“For a number of years, a base tax has been charged to residential properties in an effort to even out the allocation for lower and higher assessed properties,” explained city manager Diana Burton. “It moves away from the typical situation where you’re taxed based on the assessed value of your home with the justification being everyone – no matter what their house is worth – uses the same services such as roads, sewer and water, police and fire.”
The new system, which introduces a similar formula for commercial, industrial and hotel/motel properties, differs only in that residential property owners must pay a base tax on both their land and on any improvements made to the land such as the development of a house or some other structure. Commercial property owners will only be required to pay the land tax because, according to Burton, it becomes too complicated when dealing with businesses that span more than one commercial lot.
“The resolution was passed to notify business owners of the base tax, however the amount of the tax itself has yet to be determined,” she said.
As of last week, Burton added, efforts were still being undertaken to get the word out about the impending change.
“The city treasurer will be sending letters out soon,” she noted.
Burton also said the change could result in a tax savings for some business owners.
“It could reduce the amount the higher-assessed businesses currently pay,” she said. “But, the people who will likely see an increase are those who own vacant commercial lots or who own commercial properties assessed at a lower value.”
According to Tony Vandenberg, owner of the Woodland Inn on 9th Street West, this is good news.
“If they’re looking to increase the amount paid in taxes on vacant lots or some of the more poorly kept businesses in town while reducing the amount for people who actually keep their businesses looking respectful and of good quality, I’m all for it,” Vandenberg said. “Those who invest both time and money into their businesses are the ones who should benefit from lower taxes. Those who refuse to maintain and invest in their businesses should pay more.”
Vandenberg also believes some business owners haven’t been as eager to maintain the condition of their properties because of the potential it brings for paying lower taxes come assessment time. This, he added, is another reason why he’s supportive of the city’s decision to introduce a commercial base tax. But, he said it’s only one potential solution the city could have taken to make things more fair for everyone involved.
“I’d rather see the city look at tax incentives for those businesses in need of improvements,” he said. “Perhaps they could receive a break on their taxes if they use the money to make the necessary improvements that will, in turn, lead to an assessment increase and eventually more taxes for the city. I’d like to see people put money into their businesses and recoup the dollars that way rather than trying to force another tax system down people’s throats which, whether it will work or not, still remains to be seen.”