Independent taxation under the Indian Self Government Enabling Act
The provincial Indian Self Government Enabling Act assists First Nations in the implementation of independent real property taxation on reserve lands by providing for the province to fully vacate its taxing authority over non-member occupiers so that the First Nation can tax on its own.
To start the process of implementing independent taxation under the Indian Self Government Enabling Act, the First Nation delivers a notice to the B.C. Minister of Finance stating:
- that the First Nation intends to enact a taxation law that applies in respect of the reserve lands described in the notice,
- that the First Nation wishes to implement a system of independent taxation without concurrent real property taxation under provincial law,
- whether the intended date of the enactment is before March 1 of the calendar year of the notice, or on or after March 1 of the calendar year of the notice,
- if the intended date of the enactment is before March 1 of the calendar year of the notice, whether the first calendar year for which taxes will be imposed under the taxation law is the calendar year of the notice or the next calendar year,
- if the intended date of the enactment is on or after March 1 of the calendar year of the notice, confirming that the next calendar year will be the first for which taxes will be imposed under the taxation law, and
- whether or not the First Nation wishes to contract with one or more provincial taxing authorities that receive revenue from real property taxation on the reserve lands, and are specified in the notice, for the provision to the First Nation of any services described in the notice.
The notice should be addressed to:
Honourable Mike de Jong
Minister of Finance
PO Box 9446 STN PROV GOVT
Victoria BC V8W 9V6
On receipt of the notice, the minister will acknowledge receipt of the notice and issue a taxation certificate stating:
The minister will also:
- that the minister has received a notice that conforms to section 9 [Notice of intention to implement independent taxation] of the Indian Self Government Enabling Act,
- the name of the First Nation from which the notice was received,
- the date of the notice, and
- the first calendar year for which, according to the notice, taxes will be imposed under the taxation law.
- deliver a copy of the notice and the taxation certificate to each provincial taxing authority that receives revenue from provincial taxation on the reserve lands,
- request any provincial taxing authorities specified in the notice, and any others the minister thinks ought to be involved, to negotiate with the First Nation for the purpose of contracting with the First Nation for the appropriate services, and
- publish the taxation certificate in the BC Gazette.
Commencement of independent taxation
Independent taxation on the reserve lands will commence under the Indian Self Government Enabling Act once the minister has issued the taxation certificate and the taxation law set out in the notice to the minister has been approved by the First Nations Tax Commission or federal minister responsible for Aboriginal Affairs.
Non-member occupiers of the reserve lands will be exempt from provincial real property taxation from January 1 of the first calendar year for which taxes are levied under the First Nation's taxation law.
It can be a lengthy process for a First Nation to get the required approvals for the implementation of independent taxation on reserve lands. If the First Nation notifies the minister that it intends to enact a taxation law imposing taxes starting with the next calendar year, the advance notice will help ensure a smooth transition to property taxation by the First Nation.
In comparison, a number of issues may arise when notice is given by a First Nation that it intends to enact a taxation law imposing taxes starting with the current calendar year, including:
- The BC Assessment Authority will have already completed the current calendar year's provincial and municipal assessment rolls as of the previous December 31 and it has no authority to create a new assessment roll for the current calendar year specifically for the First Nation's use. For that first year, the First Nation will have to rely on the information contained in the existing assessment roll unless it uses a different assessor.
- It is possible all the required approvals will not be in place by the time the provincial government or municipality is required to send out its property taxation notices for the year. If that is the case, the tax collector will have no authority to withhold issuing taxation notices to the non-member occupiers of the reserve lands, despite the First Nation intending to independently tax those persons.
The Ministry of Finance Property Taxation Branch is responsible for administering receipt of the notice and the certification. Please contact the branch if you have any questions.