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Home My WebLink AboutCS 08/00' 28 ,�oFP,� �� REPORT TO COUNCIL FROM: Gillis A. Paterson DATE: April 17, 2000 Director, Co�porate Services & Treasurcr REPORT NUMBER: CS 08-00 SUBJEC7': Property Tax Refund Applicntions in respect of the frozen Assessment Listing (FAL) (via Section 447.26 and Section 442 of the hfuiilcJpal Acf.) RECOMMENDATION: That report CS 08-00 of thc Director, Corporate Serviccs & Treasurer be rcceivcd for information nnd that: I. The Council of thc City of Pickering not consider the tax refund applications in respect of thc Frozen Asscssmcnt Listing (FAL). ORIGIN: Dircetor, Corpora►c Scrvices & Trcasurcr AUTHORITY: Thc Municipal Act, R.S.O. 1990 as amcndcJ, Scctions 442, 447 anJ Part XXI(.1 &.2 FINANCIAL IMPUCATIONS: (f approved, there woulJ be no curtent financial implications. EXECUTNE SUMMARY: Not Applicable. BACKGROUND: Bill 79 (The Faimess For Property Tnxpayers Act 1998) limited property tax increases to budgetary changes plus u property tax refortn increase of 10 per ccnt in 1998; 5 per ccnt in 1999 und a further 5 per cent in 2000 for the industriul, commercial nnd multi-residential rcalty tax classes. One of the key components of the Bill 79 tax calculation is thc frozcn nsscssmcnt listing (FAL) vulue for each property. The FAG property value is the basic building block Ihat °s used to calculutc thc 1997 tnxcs for cach properiy that in tum is uscd �o set thc upper cupping limit. The FAL vnluc is calculutcd as follows: (1997 realty assessment )'+' (1997 Business usscssment )+ OT —(vucuncy assessmcnt rolatcd chunges) + (additions/cxpnnsions to thc property) minus (delotions/demolitions.) ! . � Repori to Council CS 08-00 Datc: April 17, 2000 29 Subject: Property Tax Refund Applicutions in Respect of thc Frozen Asscssment Pagc 2 Listing (FAL) (via Scction 447,26 and Scction 442 of the Muntcrpa! Ac�.) Changes to property assessment such as an increase or decrease in vacancy for the yea�s 1998, 1999 and 2000 has to be restated from a 1997 perspective so that lhe property change can be applied to lhe FAL. The FAL vnlue is muintained by the Ministry of Municipal Affairs throu�;h the Ontario Property Tax Analysis (OPTA) system. Infortnation regarding property chunges such as vacancy shifls and additions are provided by the locnl assessment office to OPTA. Curtent Situntion Around March l", 2000, thc City of Pickering received approximalely 50 tax retund applications Crom various property owners or their tax agents appealing the 1998 and 1999 frozen assessment lisling (value) used in the calculntion of their 1998 and 1999 taxes. (The application deadline for appealing the 1998 und 1999 FAL was February 29, 2000.) The appeals or applications were bazed on Section 447.2G of the Municipal Act that states an application may be made to Council in respect of thc frozen assessment 1(stlng (FAL) by any person who is overchareed by reason of: "(a) a gross or manifest error that is a cicrical error, the transposition of tgures, a typo�raphical crtur or similar type of crror ...; or (b) an ertor in judgment in a detertnination undcr Scction 447.8, subsection 447.10(2) or (3), scction 447,11, a regulation undcr subscction 447.1G(5), paragraph 3 of scction 447.21, puragraph 2 of seclion 447.22 or paragraph 2, 3 or 4 of scction 447.23. " Section 447.2G of the Municipal Act allows the applicant to apply for a propeny tnx refund due to a FAL crtor by using thc traditional tar rcfund lool Scction 442 of thc Municipal Act. Thc dcaJline for Council lo cithcr rcjcct, acccpt, ncglcct or omit Scction 442 applications is April 30'h. It is intcresting to notc that cvery tax rcfund application was baseJ on the above Sections but not one application statcd what the crror was or what thc FAL valuc should be! (Aaachmenr one is a sumple letter recci��ed jrom u �ar ngcn�.) It is s�atT's opinion that thc majoriry of the upplicntions wcre of a defcnsivc nature. By filing a property tax refund application (due to a FAL error), the property owncdtax agent now has thc option of filing an appeal with thc Asscssment Rcvicw Board (ARB). Process ARer rcceiving the numerous FAL appcals, taxalion staff contactcd Municipal Tax Equiry Consultants (the City's tax consultants) to nssist in dcveloping a stratcgy of proccssing the various appeals. A lettcr was sent to each tax consullant asking for the following infortnation: • A letter from each property owner authorizing the lax agent to act on behalf of tlic property owncr. • Asking for informntion from the tax agent to substnntiate the basis of thcir application that their was an aUegcd error on the FAL. • The tax agent to reply back to the City of Pickering by March 31, 2000 with the abovc requested infortnation. City of Pickering tex�tion staff prcpared thc following information an a property basis that was sent to each tex agent: 1. FAL for 1998 and 1999. 2. 1997 Mill Ratea 30 Report to Council CS 08-00 Datc: April 17,1000 Subject: PropeAy'fax Rafund Appiications in Respcct of thc Frozen Asscssment Page 3 Listing (FAI.) (vin Section 447.26 nnd Section 442 of thc Municipul�lc�.) 3. 1998 & 1999 Twc Rates 4. 1998 & 1999 Cupping Tax Factars (Approximntely, 60 hours of staff time wes spent preparing the tax packages for the tax agents. Before the information wns sent, taxution staff conducted various quality integriry chccks to ensure thut the FAL und tux calculations were correct.) The tax information was sent to the tax agent to assist them in trying to find if there was in fuct a PAL error. The appltcut(on for taz refund due to FAL error Is slmllar to an assessment appeal nnd therefore, the burden of proof rests wit6 the tax payer to pr�ve N•here the error is. Tuxatlon staff have waited as long us possible to prepure this report in consideratlon of the Aprll 30'h deadltne. The strategy was to provide as much time as possiblc for the tax a;ems/property owners taking into consiJeration Pickering Council's schedule. As of April 18, 200U, we have only hcard from one property owncr. Wc have asked our tax consultant to investigate thc tax ogent's claim that there was a FAL error. Our prcliminary discussion and investigation indicates that the Assessment Depanment may have made an assessment crror but not direcUy linked to the FAL. If there is an assessmcnt ertor, wc would revise the tax calculations and any tnx refunJ would be processed through the truditional tax Iegislation tools of cither Scction 442 or 443 of thc Municipal Act. Rccommendation one providcs a neutral position from thc perspcctive of the FAL tax refund applicntions. Bccausc the City of Pickcring has not yct rcccivcd any information from thc tax agent or property owncr detailing uny PAL crror, taxation staff are not in u position to cithcr recommcnd to Council to eithcr reject or accept thc tax rcfund applications. Scction 442 subsection 15 of Ihc Municipal Act, allows thc property owncr or thcir ngcnt to file a written noticc of appcal to the ARB (by Muy 14) regardless of whethcr council has omitted, ncglected or refuscd to dcal with thc lax refund application. Thercforc, bascd on NO informutlon being received, it appcars thnt Recommcndation onc is the only option nvnilable. ATTACHMENTS: I. Samplc Lettcr - Refund of Taxcs Application Prepazed By: Approved / Endorsed By: � `�?%�05� ��—�—� Stan Karwowski, Gillis A. Paterson, Munagcr of Finance Director, Corporate Scrvices & Trcnsurer GP:vw Attachment Recommendcd for the consideration of Pickering City Council � �� „ . i..� o as J. nn C ief Adm� ' tive 0 cer ' i,�=" -, i_ _ . �� ;. , _ ATTAGHMENT#�TOREPART#� pS 00 Attachment One 31' Sample Letter From Tax Agent Requestiag Refund of Ta:es � ' . . RE°FE� �/E KFRIIy p� Febniary 25, s000 . . . ��e � 9 ?OOp . . �R��SERVI , PickerinB . ' �.4 r Deer SIr/Medame: Re _ Pleaza be edvised thet ,, representt the abovaceptioned • property, respective of Asseument md Municipal tax matters. As e reult of ihe new Assessment and Municipal tax system, , is filing a Drotective � eMlication under Sxtions 442, 443 and / or 447.5 - 447.26 of the Municipal Act for 1998 end 1999. Please note, t6nt ualee� otherwiae requated, thie letter � the applfcaHoo. 'Rie protective applicadon will ellow an oppoAunity to review the correctness of tho Froun Assessment Listing, ihereby verifytng the substantilHon of 1998 and 1999 realty tnx bills as received by our clienis. is also taking t6is opportunity W edviso the Municipality that on behalf of our client, we will bc requaUng a copy of the FAL far each of the properties that we reprcscnt A Letter oF Authorustion is availnble upon rcquest. A copy of tliia letter has been forwerded W the ownedoccupmt of the abovacapdoned property. thanks you for your co-opaadon in tlils marier. Wo aro positive that any end all di6ercnces can be emicably reconciled. Should any questions erise, pteese do not hesitato W ca11. 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