Will Attracting More Businesses Reduce Our Property Taxes?

Sudbury's tax base is mostly based on residential taxes, so there is often an argument made that we should attract more businesses to town in order to reduce our residential taxes. Some even make the argument that we should install a sewer along Rt 20 in particular in order to attract businesses, thereby reducing our residential taxes.

Unfortunately, this logic is flawed.

Whether the Sudbury Farms plaza is completely leased out to businesses or sits with empty storefronts -- The taxes that the town receives are basically the same. The lion's share of taxes comes from the property tax, and the landlord pays that tax with full or empty storefronts.

Here are some approximate tax bills for the various shopping areas in town:

Chiswick Park - $20 million valuation - $420,000 in taxes

Whole Foods Plaza - $12 million valuation - $252,000 in taxes

Shaw's Plaza - $12 million valuation - $252,000 in taxes

Sudbury Farms Plaza - $12 million valuation - $252,000 in taxes

Mill Village - $10 million valuation - $210,000 in taxes

The $420,000 in taxes from Chiswick Park comes from about 25 acres of land. The $252,000 from the Sudbury Farms Plaza is based on about 9.6 acres of land.

So, in order to increase our tax revenue from businesses, a large swath of land would have to be converted from rural land into hardscape. And even if we found 25 acres somewhere to convert, the additional taxes would be less than 0.5% of our total revenue.

There's no magic bullet when it comes to revenue from taxes.

As an aside, commercial property is taxed at a higher rate (approximately 50% higher) than residential properties. One might argue that this is passed onto the businesses that lease the storefronts. And perhaps that makes Sudbury a more expensive location for a business.