Toronto’s Third Party Sign Tax – Have You “Signed Up"?

Owners or managers of properties with third-party signs erected on them should be aware that in December, 2009, City Council passed a new Sign By-law and third-party sign tax (“Sign Tax”) which came into force on April 6, 2010 (with strong opposition from owners and sign companies). However, some property owners and property managers may not be not clear about how the Sign Tax works and what affect it can have on the value of their property and the cash-flow.

The Sign Tax applies to all “owners” of third-party signs. These are signs (on the ground, wall and/or roof) that advertise a business, goods or services not available at that property where the sign is and that also have a sign face area greater than one square metre (for a general overview of the Sign By-law, Download the PDF published by the Waterfront Business Improvement Area). This obviously does not apply to pylon, roof, wall, or canopy signage at a property that advertises business, goods or services offered by tenants operating at the property.

If you own or manage property with a third-party sign that attracts Sign Tax, then the person responsible for paying the Sign Tax is the person who owns and controls what goes on the sign i.e. the “sign copy”. If the person who controls the display of sign copy is not the same person as the person who owns the sign itself (i.e. the structure), then the “owner” for purposes of liability for the Sign Tax is the person who controls the display of the ads on the sign.

All owners of third-party signs in the City were required to provide a complete inventory of their signs to the Chief Building Official by January 31, 2011 and then receive their tax bill for the Sign Tax by March 31, 2011, with payments due July 1, 2011. If you have a third-party sign that was only permitted after April 6, 2010 the initial Sign Tax is payable on the issuance date of that third-party sign permit.

So, how much is the Sign Tax per sign? That depends on what sign class the sign is in pursuant to the By-law. There are 5 Classes of signs and what class a sign falls under depends on the size of the sign and the type of signage on it (i.e. static, mechanical, or electronic copy). Sign Tax currently ranges from $1,150.00 per sign to $24,000.00 per sign.

Going forward, the sign owner must, by January 31 of every year provide certain information to the Chief Building Official of Toronto who assesses the Sign Tax by March 31 of each year. If an owner does not pay it when due as a result of fraud or wilful default, the By-law provides for a penalty of up to twice the Sign Tax otherwise payable with interest at 15% from the payment date.

For the complete article view the document below.