Accessing new taxation revenue: evaluating policy alternatives for British Columbia's cities

This study explores how British Columbia can provide more financial autonomy to its cities by granting them access to more diverse taxation revenue sources. Three types of taxes are considered as policy alternatives: a municipal general sales tax, a municipal personal income tax and a municipal corporate income tax. Several implementation methodologies are also evaluated: tax rate setting authority, tax collection and tax revenue distribution. The evaluation relies on key informant interviews, case studies of U.S. cities that have already implemented the cited taxes and a review of previous literature. This study recommends that granting cities access to a local sales tax is the most practical first step in providing cities with more financial autonomy. However, access to a more diversified set of taxes, including corporate and personal income taxes, should be considered as next steps in granting city governments more flexibility to diversify their revenue sources.