January 2013 Inside this issue: GM’s Report Member Spotlight Events Recap Photo Gallery
CHAMBER at a glance
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Calendar of Events 7
a publication of the Brandon Chamber of Commerce
PRESIDENT’S MESSAGE Property Tax Is it a Fair Tax for Business?
D
id you know that businesses in Manitoba pay more than double the amount of property tax on the same value of property as a residential owner? Why would anybody think this is fair? There is no justification why this is the case. Residential properties use more services the city provides, but businesses are left, apple to apples, with the lion's share of the bill. To compare, in 2012 Brandon residential and farm taxpayers paid property tax to the Brandon School Division (Special Levy) and to the City of Brandon (Municipal Levy) at mill rates of 15.379 and 19.070 respectively. Comparably, a commercial entity paid property tax toward the Brandon School Division (Special Levy) and the City of Brandon (Municipal Levy) with the same respective mill rates of 15.379 and 19.070, but also paid a portion towards Provincial School Funding (Education Support Levy) known as the ESL portion at a mill rate of 11.360. The residential properties’ combined mill rate was 34.449 in
2012, where the combined mill rate of a commercial property was 45.809. Let's do the math. As mentioned, residential and commercial entities both use the same mill rates in regards to the Brandon School Division and the City of Brandon levies they're taxed on. However, that's where the similarity ends as portioning enters the equation. A residential property is portioned at 45% of the assessed value and then is multiplied by the mill rates to determine the amount owing. On a commercial property, a 65% portioning factor is used and then multiplied against the set mill rates to determine that amount you would pay for property tax. Now if you're doing the math, let's take a $200,000 residential property and compare it against a $200,000 commercial property. Residential – $200,000 portioned at 45% gives you $90,000 multiplied by a combined mill rate of 34.449
Nate Andrews, Chamber President
equals approximately $3100 in total tax paid. Subtract $700 for the Manitoba Education Property Tax Credit and you're left with a $2400 bill. The Commercial property – $200,000 portioned at 65% gives you $130,000 multiplied by a combined mill rate (Provincial, Brandon School and City) at a combined mill of 45.809 equals approximately $5955 per year. The commercial entity with the same property assessment of $200,000 pays approximately 2.48 times the amount of property tax. Governments love property taxes, because in contrast to sales and income taxes, (which can fluctuate with the economy), property taxes (Continued on pg 6)