This tax was designed nearly a century ago and was based on classifications which are outdated and no longer make sense. The tax is impossible for taxpayers to understand and it is expensive to administer. Businesses have long been asking for the elimination of this arbitrary and outdated tax. BOT is determined by taking the assessed value of the part of a property used by a business, multiplied by a percentage rate specific to the type of business. The commercial mill rate is applied to the result, generating the tax.
BOT is paid by the business operating out of a property, rather than the property owner.
The percentages applied to various businesses range from 25 to 75 per cent. For example, in the same building, the BOT percentage applied to a professional office would be 50 per cent, while that applied to an insurance company would be 75 per cent. When the BOT was devised in 1904, the different rates applicable to different kinds of businesses were intended to be a proxy for the amount of personal property owned. These classifications are no longer current and the BOT no longer makes sense. Municipalities will be empowered to decide whether or not to recover equivalent municipal revenues from any or all property classes, in the form of realty tax on property owners.