Homeowners and small business owners are working hard to make ends meet. The overwhelming majority play by the rules and are the backbone of our local communities.
But a 2008 Wisconsin Supreme Court decision has allowed big-box retailers to reduce their tax liability and push it onto homeowners and small businesses. Under the “dark store” loophole, big-box, corporate retailers such as Walgreens and Walmart sue municipalities to have their property value assessed as if the stores were vacant or abandoned.
The dark store loophole is already harming Wisconsin families. In Appleton, city residents have shelled out $300,000 in legal fees and $802,000 in property tax refunds to four big-box stores utilizing the dark store loophole. This includes a $79,000 refund to Target and a $385,600 refund to Walgreens in recent years. Statewide, nearly 60 municipalities paid property tax refunds to big-box stores, and more than 100 communities are currently being sued. Communities without the budget to take on these legal challenges are at a disadvantage, and perhaps likely to settle even if they believe their assessment is correct.
The dark store loophole is affecting northwestern Wisconsin, too. Walmart and Menards sued the city of St. Croix Falls in 2017 looking for property tax adjustments. If the cases are successful, the companies could receive refunds of close to $100,000.
Hudson homeowners are estimated to see an average property tax increase of $374 – or 9 percent – if the dark store strategy is fully implemented, according to the League of Wisconsin Municipalities.
I have heard from local officials, small business owners, and residents about the dark store loophole. Large corporations like Foxconn are already getting massive tax incentives that make it hard for Main Street businesses to compete. And with Wisconsin ranking last in the nation for business startup activity three years in a row, we need to re-think our approach to level the playing field and provide opportunities for our middle-class families.
Governor Tony Evers’ budget proposes to close the dark store tax loophole. A bipartisan coalition of legislators have supported efforts to address this loophole in the past, but proposals were never scheduled for votes in the state Senate. However, with a new governor and legislative session, perhaps there is an opening to take on this issue and side with our local governments and taxpayers.