Five major retailers won a five-year-old tax assessment appeal lawsuit against the city of Prince Albert, leaving taxpayers to pay an astonishing $652,000 in lost tax revenue.
Of 15 commercial properties in Prince Albert in 2017, only Walmart, JYSK Canada, Canadian Tire Corporation, Sports Check and Marks Work Warehouse challenged tax assessments at the Court of Appeals level.
After several decisions through appeals bodies such as the Board of Reform (BOR), the City of Sask (SMB) and the Court of Appeals (COA), the company finally decided on a cost-approach valuation methodology for commercial property valuation. You have successfully challenged the method of application. in Saskatchewan.
City councilor Prince Albert Vanessa Vaughan said in a press release, “The city’s assessors have applied the rules fairly and accurately as set forth in the law and guide.” We have followed the assessment process and are now dealing with the burden of significant losses.”
The city of Prince Albert issued a press release on Thursday claiming that in recent years, major companies have begun hiring professional tax accountants to aggressively challenge cities across Canada. These business strategies have introduced great uncertainty to local government financial planning, as they can take years to complete.
Mayor Greg Dionne said, “The valuation system is set up to allow property owners to appeal, and it is the owner’s right to go through the process.” “It is incredibly disappointing. These businesses are among the most profitable in Prince Albert. As a result of their appeal, the customers who support them, the residents, have to pay more.” With the notable exception of Canadian Tire, these companies offer little, if any, support to our community.”
Malcolm Jenkins, an associate dealer of Prince Albert Canadian Tires, said he was unaware of the appeal by Canadian Tire headquarters when he was contacted on Friday, but believed it was standard procedure across large retailers. Said there was
The Daily Herald attempted to contact the headquarters of Walmart, JYSK Canada, Sports Check and Canadian Tire Corporation but received no response by press time.
The city said it has tax tools available to prevent other taxpayers from having to continue to absorb the impact of decisions that benefit large retailers.
“The Property Tax Ordinance for this category of commercial property was adjusted in 2020 to protect $430,000 in income in 2020. This is a measure that has already helped stabilize the City’s finances. These tools will be reviewed over the next few years to equitably address future revenue impacts,” the media release said.
At the city council meeting on Monday, the city’s elected officials will raise funds from Fiscal Stabilization for $829,553 from 2017, combined with the impact of appeals from those appeals and other outstanding commercial appeals. We will discuss a report from City Councilor Vanessa Vaughan recommending that
The five major retailers that have been granted permission to appeal will have their commercial property taxable valuations reduced after a final decision. This translates to a $652,000 reduction in local tax revenue for the City of Prince Albert.
According to the report, the valuation principles for these five cases were fairly and accurately applied by the city’s evaluators as set forth in statewide laws and guides. However, the COA found these appeals erroneous.
Also in 2019, there were 18 outstanding commercial real estate appeals awaiting hearing at the SMB level. After reviewing the board’s records based on these decisions, appellants recently withdrew their appeals.
City law requires refunds to be made once a decision has been received. The first impact on five properties will result in the local government receiving a refund of $652,165. The rest of the tax revenue loss is for unresolved small business complaints that are still awaiting hearing. Total potential municipal tax revenue loss is $923,213.76.
“Administration should make the public aware that in the past the city council has challenged valuations of multinational corporations that profit from our community, which has implications for property taxes. Some of these companies also contribute to their communities,” the report said. “However, it is worth noting that the appeal is correctly legislated and the risk of the appeal being dismissed is part of the process.”
The report said the appeals process could take years to complete, creating significant uncertainty in local government financial planning.
The City of Prince Albert budgeted $100,000 for the 2022 Revision Commission appeals, and now has $93,661 left in the account. The balance of $829,552.76 will be covered by Fiscal Stabilization.
March 2020, Tax Tools and Communications Follow-up to Assessment Appeal Risk Report describes five commercial tiers created to provide the ability to use tax tools to adjust property mill rate factors that impact taxation. provided information on the development of Loss of revenue due to valuation appeals. In this way, the loss of tax burden can be recovered from the property appealed rather than passed on to the local or small commercial operator.
The intent of the 2020 City Council’s Assessment of Appeal Risk Report was that the property tax ordinance would generate an additional $430,500 from the commercial tier set aside for these potential losses. These extra taxes flowed into fiscal stabilization as part of the surplus at the end of the year.
The intention, according to Vaughan’s report, was to budget an additional $430,000 in the following year to cover these potential appeal losses, but given the uncertainty about the outcome of the appeal. As such, additional revenue was used to fund other budget priorities for 2021 and 2022.
The report concludes by stating that tax tools available in commercial-phase methods will be revisited in the future to address the revenue impact these losses have had on local government operations.
Large Retailer Wins Tax Appeal Against City of Prince Albert
Source link Large Retailer Wins Tax Appeal Against City of Prince Albert