A Business Improvement Area (BIA) tax assessment is a value placed on any space occupied or used by a person for the purpose of operating a business that is situated in a Business Improvement Area. The assessment is used for taxation purposes only and does not reflect the profitability of a business.
The BIA administration determines the annual revenue required to pay for revitalization initiatives within the BIA. This revenue requirement (budget) is approved by City Council. The business assessment is used to determine each business's share of the total tax requirement for the BIA.
Business assessments reflect the typical net annual rental value of similar businesses in an area.
All businesses, including professional corporations located on commercial or industrial property within a Business Improvement Area are assessable. An assessment notice is sent to the owner of the business regardless of whether the person owns or rents the space.
A person having a lease may choose to sublet certain areas to another person; however the lessor may be assessed and taxed for the entire area.
To estimate the typical 'net annual rental value' of the space a business occupies, the City considers the commercial and industrial rental market across Edmonton.
Questionnaires are mailed to property owners, managers and agents each year and interviews may be conducted with tenants and agents. This rental information forms the database for the mass appraisal of business space.
Assessors analyze net rents paid for various types of space and establish typical net annual rental rates. Business assessments are calculated by multiplying the total leased or occupied area (square footage) by the net annual rental rate for the type of space.
The assessment (square footage multiplied by the net annual rental rate) shown on the assessment notice is multiplied by the tax rate set by City Council.
The result is the tax you owe.
Area x Net Annual Rental Rate = Business Assessment
Business Assessment x Tax Rate = Business Improvement Area Tax
Net rent is the typical annual rental value of similar space in an area, exclusive of all operating and occupancy costs.
The net annual rental value is based on an analysis of the rental market last July 1. Actual rents may differ due to timing of lease arrangements or varying rates within the market. Business Improvement Area assessments are based on typical annual rental rates for properties like yours, not your actual rent.
Properties are usually rented on a net rent basis (rents are set based on market value). Ratepayers can easily compare their assessments for consistency with other businesses.
With fluctuating operating costs, particularly utilities for older properties, net rent provides a current, fair and equitable way to distribute the Business Improvement Area tax.
Rental rates are reviewed and updated every year.
If you have concerns regarding your assessment, please contact us to discuss it with a Business Improvement Area (BIA) assessor first. The assessor could make any necessary corrections and issue an amended notice.
If an assessor is unable to resolve your concerns, you may wish to appeal your assessment by filing a complaint with the by the deadline shown on your assessment notice. Information about the complaint process, including the filing fee, is included on the back of your assessment notice.
It is important to note that you can file a formal complaint on your BIA assessment but not on the BIA tax rate and amount of taxes.
Each year, City Council determines how much Business Improvement Area (BIA) tax revenue needs to be collected in each BIA to realize the projected costs of revitalization activities in those areas of Edmonton.
The penalty rates for unpaid Business Improvement Area taxes are as follows:
4% April 3
1.25% per month May 1 to December 1
Current year's taxes (other than supplementary taxes and taxes being paid under the Property Tax Monthly Payment Plan):
Prior year's arrears:
1.25% per month on the first day of each month (January through December inclusive)
Other current year charges:
1.25% per month commencing on the first day of each month following the due date for payment.