The Assessor's job is to determine the actual value  of the properties in a municipality. The Council's job is to set the rate, calculate and send out the tax bills and collect the taxes.

The Municipalities Act says that all municipal councils may impose a real property tax.

The Council of a municipality must impose a business tax on anyone conducting business in the community. The tax is also based on the assessed value of the business property and land. The tax is payable by the owner and/or the tenant of a business.

After all the real property has been assessed, the Council uses the information to set the mil rate. The mil rate is then used to establish individual tax bills.

Mil Rate Calculation
Each year, Council, during its budgetary process, approves the amount of revenue required to operate the municipality. From this amount they subtract the known revenues, such as grants, licences, permits and so on. The remainder represents the amount of money to be raised by property taxes. The amount to be raised is divided by the total value of all the property in the municipality and multiplied by 1000 to decide the tax rate also known as the "mil rate". The calculation expressed as an equation is as follows:

• It is payable by individuals and companies who are using real property for business purposes. Businesses with no fixed address also are required to pay business taxes. The amount is based on a percentage of their gross revenue. Insurance sales persons are possible examples.
• It is based on the assessed value of that portion of the property used for commercial purposes. For business tax purposes, the Municipal Assessment Agency will assign market value to the area used for business purposes. This value is called the "Tenant's Portion". The Tenant's Portion is calculated by the Assessment Agency and appears in the last column of the Assessment Roll.
• Vacant space in a commercial building is not subject to the business tax.
• The business tax rate is set by the municipal council and may vary from one class of business to another. The rate is expressed in "mils". All businesses in a class, such as drug stores, must be taxed at the same rate.
  
  The basic formula for calculating the business tax is:
  
  

  Tenant's Portion x Business Tax Rate 1,000 = Business Tax

  
  The following samples will help to illustrate how business and property taxes work for commercial enterprises: In all the sample situations the following information is the same:
  
  Building Value = $75,000
  Land Value = $25,000
  Total Value = $100,000
  
  Business Tax Rate = 5 Mils      Property Tax Rate = 8 Mils
  
  
  • Situation 1:
    
    Bob Smith owns and operates a business using 100% of the building.
    
    

    Property Tax Payable Bob Smith	Business Tax Payable Bob Smith
    $100,000 x 8 1,000 = $800	$100,000 x 5 1,000 = $500

    
    
  • Situation 2:
    
    Martha Jones owns a building but only uses 50% of it to operate her business. The remaining portion is vacant.
    
    Her business tax is calculated on the "Tenant's Portion" or the assessed value of the portion of the property used for business.
    
    

    Property Tax Payable Martha Jones	Business Tax Payable Martha Jones
    $100,000 x 8 1,000 = $800	$50,000 x 5 1,000 = $250

    
    
  • Situation 3:
    
    John Marsh owns a building and operates a business out one half of it. He leases the remaining 50% to Alice Malone.
    
    John is still liable for all the Property Tax and business tax on the assessed value of his half of the property. Alice must pay business tax on the assessed value of her area used for business.
    
    

    Property Tax Payable John Marsh	Business Tax Payable John Marsh	Business Tax Payable Alice Malone
    $100,000 x 8 1,000 = $800	$50,000 x 5 1,000 = $250	$50,000 x 5 1,000 = $250

    
    
  • Situation 4:
    
    Janice Platt owns a commercial building and the whole building is leased for business purposes by Frank Smart.
    
    Frank pays the business tax and Janice is responsible for the property tax.
    
    

    Property Tax Payable Janice Platt	Business Tax Payable Frank Smart
    $100,000 x 8 1,000 = $800	$100,000 x 5 1,000 = $500

    
    
  • Situation 5:
    
    Martin Tessier owns a commercial building and leases one half of it to Gerald French. The remainder of the building is vacant.
    
    Gerald pays business tax on the assessed value of his area used for business. Martin pays property tax on the total value. There is no business tax levied on the vacant portion of the building.
    
    

    Property Tax Payable Martin Tessier	Business Tax Payable Gerald French
    $100,000 x 8 1,000 = $800	$50,000 x 5 1,000 = $250

    
    

• property that belongs to the Governments of Canada and Newfoundland
• property that belongs to a municipality or its agents
• churches and other places of worship, buildings and land, in active use (this includes and the rectory or other principal place of residence of the clergy if that house is owned by the church. Privately owned homes of the clergy are NOT exempt.).
• cemeteries operated by the church or not-for-profit organizations
• hospitals, buildings and land, including student residences.
• public schools, colleges and universities, buildings and land, including student residences and recreational facilities
• any property exempted by an Act of the Legislature

• Council, on a vote of two thirds of the councillors in office, may grant an exemption, remission or deferment of taxes and interest on taxes, either in whole or in part, to anyone who applies for it. Council may set the period of time that the exemption is in effect and the conditions that the applicant must meet to be eligible. An applicant must be able to prove their need for special consideration.
• People applying for the exemption or deferment must do so once a year. Council must be satisfied that there is continuing need for this special consideration.
• Productive farm and woodland including any buildings used in farm or wood production. People wishing to be exempted must apply, in writing, each year to the appropriate Minister responsible for those special areas.