This week, municipal leaders from communities
throughout Wisconsin and I,
testified before the Senate
Committee on Revenue, Financial Institutions and Rural Issues,
on Senate Bills
291 and
292 relating to property tax assessments and closing the
"Dark Store loophole." At the Assembly hearing in June, more
than 55 individuals, representing cities, towns, counties,
villages, and school districts, testified in favor of these
proposals.
Senate Bills 291 and 292 have wide bipartisan
support--50 percent of legislators in both houses are cosponsors
of these proposals--and were introduced at the behest of local
units of government, school districts, and other political
subdivisions that want to halt additional tax shifts from large
retail stores to homeowners and small businesses. The litigation
and tax refund costs associated with what is commonly referred
to as the "Dark Store Theory," could devastate our local units
of government and as such, it is imperative that a workable
solution is formulated.
These proposals, quite simply, clarify the best
practices as proscribed by the Wisconsin Property Tax
Assessment Manual. Moreover, they seek to provide clarity
and direction to the Board of Review and courts when determining
the value of property. The intent of these proposals is to
prevent further potential tax shifts by ensuring assessments are fair
and equitable for all taxpayers.
Senate Bill 292, provides that, for property tax
assessment purposes, to determine the value of a property using
generally accepted appraisal methods, an assessor must consider
all of the following as comparable to the property being
assessed:
1. Sales or rentals of properties exhibiting the
same or similar highest and best use with placement in the same
real estate market segment.
2. Sales or rentals or properties that are
similar to the property being assessed with regard to age,
condition, use, type of construction, location, design, physical
features, and economic characteristics.
What is more, Senate Bill 292 provides that a property is not
comparable to the property being assessed if the seller has
placed significant deed restrictions on the highest and best use of
the property or if the property is "dark" and the property being
assessed is occupied. Senate Bill 292 defines "dark" property
as, "property that is vacant or unoccupied beyond the normal
time period for a property in the same real estate market
segment."
The second proposal, Senate Bill 291, provides
that, for property tax purposes, real property includes any
leases, rights, and privileges pertaining to the property that
transfer with the property shall be used in determining the
value of that property. Ordinarily, the best information for
assessing a property's fair-market value for property tax
purposes is a recent arm's-length sale of the property. This is
true in Wisconsin for all properties except single-tenant retail
facilities, which have relied on the Wisconsin Supreme Court's
2008 ruling in Walgreen Company v. City of Madison, to
convince courts that their assessed values should be less than
half of the actual sale price of the property. A recent example
of this occurred when the Wisconsin Court of Appeals relied on
the aforementioned case to affirm that a single-tenant retail
facility in Appleton should be valued at $1.8 million,
significantly lower than the city's $4.4 million assessment,
which was based on the actual sale price of the property. Appleton, a
result, must now issue a $350,000 tax refund to the
single-tenant retail facility.
Testifying on Senate Bills 291 and 292.
Ozaukee County Fairgrounds bill
This week, I also testified before the Assembly
State Affairs Committee and Senate Government Operations,
Technology and Consumer Protection Committee, on
Assembly Bill 450 relating to: retail sales of alcoholic
beverages at the Ozaukee County fairgrounds.
Beginning in 2012, the Ozaukee County Board
received approval from the Department of Revenue to permit
licensed vendors to sell liquor on the premises of the Ozaukee
County fairground for special events. The Department of Revenue
made their decision to issue "Class B" permits to
concessionaires based on the following state statutes:
s.125.51(5)(b)2. "The department shall issue a
"Class B" permit to a concessionaire that holds a valid
certificate issued under s.73.03(50) and that conducts business
in an operating airport or public facility, if the county or
municipality which owns the airport of public facility has, by
resolution of its governing body, annually applied to the
department for the permit. The permit authorizes the sale of
intoxicating liquor for consumption by the glass and not in the
original pack or container of the premises."
In 2012, the county designated concessionaires
and applied for and received the necessary permits. Ozaukee
County has operated under these permits since 2012 with no
reported problems or complaints. Unfortunately, the Department
of Revenue has recently interpreted Chapter 125 of Wisconsin
state statutes differently than in 2012, resulting in Ozaukee
County being prohibited from selling liquor and wine in the
exposition center at the Ozaukee County fairgrounds. This
decision will adversely affect future events held at the Ozaukee
County fairgrounds.
Assembly Bill 450, quite simply, continues the
practice that permits the Ozaukee County Board to approve
licensed vendors to sell liquor and wine at the Ozaukee County
fairground buildings. This proposal has been vetted with the
Wisconsin Tavern League and they have signed off, recognizing
that permittees must be located and licensed in Ozaukee County.
Testifying with Ozaukee County officials on Assembly Bill
450. |