Effective Tax Rate Replaces the Mill Rate
Saskatchewan (OIC 30/2023)
February 17, 2023
On February 8, 2023 the Lieutenant Governor in Council amended The Cities (Local Tax Tools Limit) Regulations under the Cities Act by way of Order in Council.
The amendment included replacement of Section 15.1 with a new effective tax rate limit. Beginning in the 2023 tax year, when setting the mill rate factors, minimum tax and base tax on applicable classes and subclasses of property, a council limited to a ratio of 7:1 between the ratio of the highest effective tax rate applicable to a class or subclass of property to the lowest effective tax rate applicable to any other class or subclass of property must not be greater than 7:1 as calculated by the following formula:
HETR / LETR
HETR is the highest effective tax rate and LETR is the lowest effective tax rate applicable to any class or subclass of property.
After considering all tax tools, mill rate factor, base tax, and minimum tax, the effective tax rate for a particular class or subclass of property is obtained by dividing the total municipal property tax levy for that class or subclass by the total taxable assessment for that same class or subclass.
The effective tax rate (ETR) limit replaces the previous mill rate factor (MRF) limit. The Mill Rate Factor is calculated by taking the total revenue required from taxation for each taxing authority divided by the total taxable assessment in the geographical region under the taxing authorities jurisdiction to arrive at the mill rate for each authority, per $1000 of taxable assessment.
Total revenue required ÷ (Total taxable assessment x 1000) = Mill Rate
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