"Big-box retailers and other businesses around the U.S. in recent years have been battling with local governments to get the assessed value of their stores lowered so that they can pay less in property taxes," Bill Lucia reports for Route Fifty. "In some cases, where their appeals are successful, cities and counties can end up owing the companies sizable tax refunds. The localities are also forced to grapple with the long-term effects of the lost revenue, which can mean shifting tax burdens onto others or service cuts."
Property-tax cuts particularly hurt public schools, which depend heavily on such revenue for funding, and can make a big difference in small-town budgets. In Franklin County, Missouri, for example, Walmart wants the county government to halve the assessed value of its two stores there. The county had appraised the properties at more than $24.8 million, but Walmart claims the value is just over $14 million, Monte Miller reports for The Missourian in Washington, Mo. Walmart and other large retailers are pursuing the same strategy in stores all over the country.
Businesses that seek such a reassessment are employing a tax-avoidance strategy some call "dark-store theory." Essentially, "this involves retailers and others appealing property tax assessments on the grounds that their active stores should be valued in line with similar property that is vacant," Lucia reports. "The thinking goes that even though a big-box store may be valuable to its current owner, it’s worth far less on the resale market. Among the reasons that this argument can gain traction is that the stores are often built for a business's specific needs and aren’t easily repurposed, and because there’s a growing abundance of empty retail space available around the country."
Indiana state Rep. Lisa Beck filed a bill this week that aims to help communities who lose tax battles with big-box stores. The bill would allow local governments and school districts to get zero- or low-interest loans to help them cope with the loss of revenue, Lucia reports.
Property-tax cuts particularly hurt public schools, which depend heavily on such revenue for funding, and can make a big difference in small-town budgets. In Franklin County, Missouri, for example, Walmart wants the county government to halve the assessed value of its two stores there. The county had appraised the properties at more than $24.8 million, but Walmart claims the value is just over $14 million, Monte Miller reports for The Missourian in Washington, Mo. Walmart and other large retailers are pursuing the same strategy in stores all over the country.
Businesses that seek such a reassessment are employing a tax-avoidance strategy some call "dark-store theory." Essentially, "this involves retailers and others appealing property tax assessments on the grounds that their active stores should be valued in line with similar property that is vacant," Lucia reports. "The thinking goes that even though a big-box store may be valuable to its current owner, it’s worth far less on the resale market. Among the reasons that this argument can gain traction is that the stores are often built for a business's specific needs and aren’t easily repurposed, and because there’s a growing abundance of empty retail space available around the country."
Indiana state Rep. Lisa Beck filed a bill this week that aims to help communities who lose tax battles with big-box stores. The bill would allow local governments and school districts to get zero- or low-interest loans to help them cope with the loss of revenue, Lucia reports.
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