WEST BEND — The dark store
loophole has gained increasing attention as companies like Menards
file lawsuits and state politicians vow to press the issue
legislatively. There are proponents for closing the so-called
loophole, but others are adamant that this is not the appropriate
action to reach the desired outcome.
State Sen. Duey Stroebel, R-Cedarburg, said the dark store issue
affects all communities and is pervasive across the state.
“Communities like West Bend have suffered when large retailers
challenge their property tax bills,” he said. “These legal
challenges have increased property tax bills for homeowners and led
to costly litigation throughout the state.”
His solution is changing the legal code.
The dark store loophole is a legal argument big-box retail chains
like Walmart, Target and Menards use to drastically reduce their
property taxes by assessing active stores as if they were vacant.
The practice has resulted in the loss of millions of dollars in
taxable value to communities in Wisconsin and other Midwestern
states. “By passing legislation to close this loophole, we can get
back to the balanced property tax distribution that existed before
the courts created this loophole and avoid future litigation,”
It is important to do so now because damage has already been done,
he said, and the sooner it is corrected the better.
“The current loophole shifts an increasing share of the property tax
burden onto homeowners,” he said.
There was a public hearing on the bill last session in the Assembly
and the Senate, so this issue is not new at the state level.
“After my colleagues in the Senate heard from community leaders and
others, they voted unanimously to advance this bill out of
committee,” Stroebel said. “I hope we can have the same dialogue
this session and ultimately have this bill signed into law.”
While closing the loophole has gained support, there are opponents
to that as well. Greg Luce from the La Crosse Tea Party is opposed
to such legislation.
“It is my position that the supposed ‘dark store loophole’ is really
just property owners fighting back against over-taxation,” he said.
“Big government liberals are fighting to continue looting property
owners unfairly to finance their social-engineering schemes, and
playing the average homeowners against ‘evil corporations’ is their
This comes down to assessing value, he said. Homes are not valued
differently based on whether there are occupants or if they are
vacant — that would be ridiculous, Luce said. Similarly, he said
commercial properties should not be valued based on this criteria.
“Commercial properties should be assessed based on quantifiable
parameters like square footage and zoning, not occupancy,” Luce
said. It also will not have the desired outcome many hope for, he
“This scheme by big government liberals to stick it to big
corporations simply won’t reduce the cost of living for area
homeowners,” he said. “Corporations don’t pay taxes, their customers
pay the taxes built into the cost of their products.”
Thus, companies like Menards, which was recently involved in a
lawsuit with the city of West Bend; Walmart, which filed a similar
suit against Delafield; or any other of that nature, will just pass
the cost along to the consumer, he said.
“Walgreens or Menards simply increase the cost of their products so
that they achieve the proper margin for their business model,” Luce
said. “And those customers that think they will benefit from
eliminating the dark store loophole are simply paying the tax
difference in the cost of their purchases at these stores.”
This is not the solution most people are looking for, he said; it is
not the means to the end goal.
“I know people want improved roads and infrastructure, and
politicians are promising that they should get big corporations to
pay for it,” Luce said. “But the answer lies in reining in frivolous
government spending, not looting the producers.”