Helping a business pay their municipal property tax

BARRHEAD-A County of Barrhead business will get a little more time to pay a fairly substantial 2020 tax bill.

At their Oct. 6, councillors unanimously approved a recommendation by the administration to enter into a tax instalment agreement with a business that was only identified by its tax roll number. As of Sept. 30, the company owed $203,096.26.

The municipality has been working with the company since June to address their concerns with the assessment as well as working with them to help them find a way to become current in their taxes.

"COVID has impacted their company significantly. They have had a significant loss in revenue and layoffs which is why they are having trouble paying their taxes," she said, noting in the last five years the company always paid their taxes in full and on time.

Through their negotiations with the company, Oyarzun noted that they agreed upon four possible scenarios to help them get up to date with their taxes. Although the company had its preference, she said they were amenable to any of the options.

Coun. Marvin Schatz asked if there was anything besides COVID and the economy, such as a large increase in their taxes, that impacted their ability to pay?

Oyarzun said she did not believe so, noting after the assessor re-evaluated the property, their assessment was lowered resulting in a slight reduction of their tax bill over past years.

Under the Municipal Government Act (MGA) the municipality has the authority to cancel, reduce or defer unpaid taxes, enter into a tax payment agreement or seize property and assets under Division 7.

The option councillors selected was monthly payments over 27 months, from October 2020 to December 2022 for the back taxes. The company is also required to enter into the municipality's Tax Installment Payment Plan (TIPP) and remain in the program until their taxes are paid in full. Council also agreed to waive approximately $65,000 in late penalties that will have incurred by Dec. 31. It should be noted that penalties will be applied to the balance owing throughout the payments made in 2022. The municipality estimates that if the company keeps their taxes current through the TIPP the municipality is effectively waiving $50,000 in penalties.

Coun. Ron Kleinfeldt asked what their ability was to pay the owed amount.

"That's a tough question for them to answer," she said, noting their financial situation is improving "There has been some improvement in their industry, but are they back to pre-COVID levels, no. But they are hopeful that the injection of lots of provincial and federal monies through stimulus packages will help clients that could potentially use their services."

Coun. Darrell Troock said he wasn't concerned about the penalties, adding it was more important to work with the company to ensure that they can pay the taxes owed.

"Keeping the employment and everything that comes along with it, so it behoves us to make their lives the best we can," he said. "But on the same token, we have to protect the tax dollars because we need them."

Troock added he is also inclined to work with this company because of their history of paying taxes promptly and willingness to work with the municipality.

Barry Kerton, TownandCountryToday.com