Legislators need to fix ‘dark store’ tax values

We need our state legislators to end the uncertainty and pass into law a fair and equitable tax policy that closes a major loophole allowing so-called “big box” stores to drastically reduce their property tax burden.

Under what has become known as the “dark store” property valuation assessing theory, big box retailers have been winning arguments that their stores should be taxed at the value of what vacant stores like them are selling for around the state.

The theory is that deed restrictions on such properties limit what can be done with them by prospective buyers. For that reason, some sit vacant and sell for far lower prices than their true cash value when occupied by retailers.

In a case involving an Upper Peninsula Menards store and the city of Escanaba, the Michigan Tax Tribunal settled a 2014 property value dispute between the two, ruling in favor of Menards and assessing the store’s value at less than city officials believed. The city appealed the decision and in 2016 the Michigan Court of Appeals decided in favor of the city, setting up a now-looming battle in the Michigan Supreme Court.

Not only would a decision in favor of the big box stores result in reduced budgets for local municipalities who provide fire, police and other necessary public services, but it sets a precedent for other types of businesses to argue their assessed values.

We agree with organizations like the Michigan Townships Association and the Michigan Municipal League, which say this issue is about taxpayers paying their fair share.

According to the Michigan Municipal League, before the dark store decision, big box stores in Michigan were assessed on average about $55 per square foot.

Now, though, such stores like Lowes, Menards, Target, Sam’s Club and Wal-Mart average about $25 or less per square foot in Michigan. In other parts of the country, the same stores have nearly three times the value.

We urge our state legislators to fix this discrepancy now and make tax policy fair for all residents and businesses within this state.

Please contact your legislators and let them know how you feel.

— Petoskey News-Review

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