Standards for First Nation Tax Rates Laws Average tax bill calculation – FNTC uses the “average tax bill” as a means to determine the real dollar impact a First Nation tax rate will have on taxpayers. It is a critical tool in reviewing First Nation tax rates laws. The FNTC is examining the use of a median “representative taxpayer” whose actual tax bill can be compared from year to year. This would simplify the average tax bill calculation for tax administrators. It would also provide a better tool to track real changes in the average tax bill. Justification for exceeding tax-rate limits – Currently, First Nations can exceed tax-rate limits provided there is justification. Currently, section 7 of the Standards outlines circumstances for justification, and these include: special projects, incremental growth, local infl ation growth, changes in assessment methods, and taxpayer support. The FNTC is considering a revision to the justifi cation rationale so that there are three types of justification: • significant increases to the cost of hard local services (e.g., water, sewer, fi re, etc.); • rate consistent with the First Nation’s reference jurisdiction transition plan; or • taxpayer support within the affected class. Reference jurisdiction rates-setting – Used by many First Nations to establish rates for the year, reference jurisdiction rates-setting involves mirroring the tax rates of an adjacent reference jurisdiction. FNTC is examining a procedure for those First Nations wishing to move to reference jurisdiction rate-setting. The procedure would entail a transition plan, taxpayer notification, and consultation.