Bills to Counter Property Tax Reduction Strategies Generate Day-Long Testimony

Local government leaders from across the state testified in the state Capitol June 29 in support of a pair of proposals (Assembly Bill 386 and Assembly Bill 387–see also previous post) that would change how “big box” stores and certain national pharmacy chains are assessed for property tax purposes in Wisconsin.

Speaking before the Assembly Ways and Means Committee, local government officials argued the bills would ensure businesses aren’t getting special treatment, and are paying their fair share of taxes.

“Big box” stores have successfully employed a strategy to lower their own property taxes in which they argue that their successful, operating stores should be assessed for property tax purposes based the value of similar vacant or “dark” stores. These retail chains argue their buildings should be assessed solely on the brick and mortar and not what is inside the building.  Using this so-called “dark store” strategy, a store that does millions of dollars of business annually will claim it is worth no more than a vacant store that does no business at all.

Officials who testified said that when big box stores successfully use this strategy to pay less in property taxes, the tax burden is shifted onto home owners and smaller businesses. They added that individual municipalities–which are solely responsible for assessing property and contesting assessment appeals–were sometimes unaware that this strategy was part of a concerted regional or national effort or lacked the resources to fight the disputed assessment, causing the municipality to settle these disputes. That, in turn, resulted in all the underlying taxing jurisdictions, including school districts, and to have to refund “excess” property taxes to these retailers.

The WASB provided testimony to the Assembly Ways & Means Committee on both bills which is linked below: