County supports axing dark store loopholes

News Graphic Staff

April 20, 2017

OZAUKEE COUNTY — The Ozaukee County Board this month urged the state to pass legislation that would block the use of “dark store theory” for commercial tax assessments.

Dark store theory, used by national retail and pharmacy chains, bases a property assessment on similar properties that are sold vacant, thus severely cutting the property’s value – and the taxes it pays. A newly opened Meijer would be assessed for taxes the same as an abandoned “dark store.”

Lawsuits have begun popping up in Wisconsin as retail chains such as Walgreens, Lowe’s, Target and others sue municipalities to have their assessments cut and taxes refunded, according to the resolution approved by the county board. Because such buildings are built to specifications of a particular store, they are often not useful to anyone else and the abandoned properties sell for significantly less than the value of the property and construction on it.

When the commercial assessments, and therefore taxes paid, are cut, additional tax burden is shifted to residential property owners who already carry 70 percent of the state’s tax levy, according to the resolution.

The County Board’s resolution asks the government to pass legislation specifying that property leases are relevant to assessment for such stores, and comparable sales assessments should use only properties that similarly exhibit their best use and value, not abandoned properties of deteriorated value.

Similar legislation has been passed in Indiana and Michigan in the past two years.

Local legislators Rep. Rob Brooks, R-Saukville, and Sen. Duey Stroebel, R-Cedarburg, are expected to bring dark store legislation forward in the coming weeks.