County Board Wants Legislature to Close Big Box Tax Loophole

The Door County Board of Supervisors passed a resolution at its March 28 meeting to urge the Governor and Legislature to close a loophole that allows big box stores from taking advantage of what is known as the “dark store tax loophole.”

According to the League of Wisconsin Municipalities (LWM), which issued a briefing on the strategy being used by large chain stores, “A carefully orchestrated wave of 100s of lawsuits in Wisconsin is forcing assessors to slash the market value of thriving national retail stores.”

According to LWM, tax attorneys for big box chains are using the “dark store theory” to argue that the assessed value of a new, thriving store should be based on the comparable value of vacant or abandoned buildings of the same size. They site examples of where this has already taken place in Appleton with a CVS assessment and two Walgreen’s assessments in Oshkosh. In both cases, the cities lost in court and had to pay large assessment refunds to those chain stores.

The LWM briefing says this is not a problem only in Wisconsin and points out that courts in Michigan have upheld the dark store theory and cut property tax assessments for the big box stores, shifting the tax burden to the homeowners.

The solution, WLM suggests, is to follow the lead of the Indiana Legislature, which closed these tax assessment loopholes.

Door County Corporation Counsel Grant Thomas explained to the board that the corporations are winning because they have chosen the correct cases to litigate.

But one county board supervisor seemed not to understand the problem and thought this was an open attack on all big box stores. He felt the resolution to close the loophole showed “a lack of economic understanding” and that supporting such a resolution would drive Door County’s big box stores to Algoma.

“If you drive them out, that would be going backwards,” Ken Fisher said. “There’s a reason they’re winning in courts – because they’re right.”

Fisher was joined by Don Sitte and Linda Wait in rejecting the resolution, which passed 18-3.

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