in Pewaukee recently filed a lawsuit against the village
under the dark store theory, asking for its 2017
property tax assessment to be cut in half.
Hannah Weikel/Freeman Staff
WAUKESHA — Mayor Shawn Reilly is drawing attention to
pending litigation statewide brought by big box stores
under the dark store theory by promoting state
legislation that would promptly end tax reductions for
Reilly and other municipal leaders in Wisconsin have
rallied behind Senate Bill 291 and 292, which would
invalidate the dark store argument that has, for several
years, led to local governments issuing tax refunds to
businesses like Menards, Target and Walgreens across the
Under the dark store theory, big box stores are able to
argue that their businesses should be assessed the same
as if they were a vacant property. After a 2008 U.S.
Supreme Court decision, chain drug stores are also able
to pay property taxes at half of the actual fair market
issue, Reilly said in a press release, is not only that
the stores’ tax avoidance strategy has allowed them to
greatly reduce their property taxes; it has also
increased the property tax burden on small businesses
and homeowners in those municipalities.
businesses in Waukesha used the dark store strategy this
year to file lawsuits, resulting in over $30,000 in tax
refunds, according to a city property tax settlement
document. Those businesses, Farm & Fleet and Target,
have received tens of thousands in property tax
reimbursements since 2015.
Requests for comment sent to the corporate headquarters
of Menards, Woodman’s and Walmart on Tuesday morning
were not returned before deadline.
Scott Gosse, village administrator in Pewaukee, said
Walgreens and Menards have come forward in the past to
challenge their assessments. He said the community
reimburses the property owner, but then files paperwork
with the Wisconsin Department of Revenue that then
distributes the refund between other local taxing
districts like schools and technical colleges.
more big box stores in Pewaukee filed lawsuits Monday
morning, requesting their 2017 property tax assessments
be cut in half, according to court documents.
Menard, Inc., with its property in Pewaukee assessed at
$14.4 million, is asking to be assessed at no more than
$6.1 million. CJM & W Investment Company, owner of
Walmart, asks that their property in Pewaukee be
assessed at no more than $9.8 million, instead of its
current assessment of $16.6 million.
of these cases are mediated and settled out of court.
“Stores should not receive an unfair property tax break,
especially when the result is a continued unfair tax
shift to constituents,” Reilly said.
Reilly joined other state officials Monday in
designating Dec. 11 as Dark Store Day to raise awareness
about the issue and call for state legislators to
schedule a vote in January on SB 291 and 292.
“Both of these bills have broad bipartisan support and
will easily be passed if a vote is scheduled,” Reilly
said in a statement.
Gosse said Pewaukee adopted a resolution earlier this
year asking state legislators to support the law change,
but the similar bills have faced stiff opposition from
Wisconsin Manufacturers and Commerce.
press release from June 2017, WMC offered their
testimonial against closing the dark store loophole,
which they said would make it easier for aggressive
assessors to raise property taxes on businesses.
According to the WMC, some assessors in Wisconsin have
already tried to increase property values up to 500
percent to make additional tax revenue.
“Wisconsin already has some of the highest property and
income taxes in the country. It’s disappointing and
frustrating that lawmakers seek to worsen this crushing
burden for businesses by allowing local governments to
tax lease income through the property tax,” said WMC
Senior Director of Government Relations Jason Culotta in
a June statement.
Wichgers: Legislation would ‘even the playing field’
Chuck Wichgers, R-Muskego, co-sponsored both bills after
his constituents in municipal government told him about
the burden reduced tax assessments would in turn have on
small business and residents.
Wichgers said he also weighed the wishes of big box
stores and commercial properties before supporting the
legislation, but decided the impact on those
corporations wouldn’t be detrimental if the bills pass.
He said the bills would “even the playing field.”
291 would close the gap in Wisconsin’s property
assessment laws that allow businesses like Walgreens and
CVS to claim that their property value isn’t what it
appears to be, he said.
292 would stop national big box stores from challenging
their assessed property values based on the dark store
Wichgers said his goal is to make the property tax
burden as fair and equitable as possible in Wisconsin.
<<EARLIER: Reilly supports bills against 'dark store'
<<EARLIER: Ozaukee County supports axing
dark store loopholes
<<EARLIER: Shedding light on dark store