WalMart Wants Tax Refund Due To 'Dark Store Theory'

Feb 21, 2018

Credit Wikimedia Commons

MINOCQUA – Wal-mart is contesting the property assessment of its Minocqua store, contending the property is worth much less and thus it’s due a refund of thousands of dollars it paid in property taxes.

The Minocqua Town Board disallowed the claim Tuesday, setting in motion a possible legal fight. The town’s insurance carrier, Employers Mutual Casualty Insurance Companies (EMC) of Brookfield, will cover the costs of legal representation in the event of a lawsuit. EMC recommended assigning the law firm of Hale Skemp in La Crosse to defend the town.

The claim for excessive assessment for the 2017 tax year says, “(T)he property in the City (sic) was assessed at 95.58% of its fair market value as of January 1, 2017, and was taxed at $10.04137 per $1,000 of assessed value.” Wal-mart, challenged the assessment value of $11,252,400 to the board of appeals. But the board of review upheld the amount and the town levied a tax of $112,956. Wal-mart Realty Company’s lawyers contend the fair market value should have been no higher than $8,997,698. Furthermore, the assessment should have been no higher than $8.6 million and a correct tax of no higher than $86,355. Wal-mart wants $26,600 of taxes refunded because of what it contends is over-assessed value of its real property. Assessors set values on commercial properties based on building and land costs and its use.

Wal-Mart, along with other major retail chains such as Menards and Walgreens, contend the valuation of their property should be based on comparable stores in the area that are vacant, rather than those that are occupied and thriving.

They say it’s not in appropriate to assess value based on what’s inside their stores, as well as the building and land. The strategy of using vacant stores – “dark box,” or “dark stores” – to determine valuation has spread across Wisconsin following the 2008 Wisconsin Supreme Court ruling in Walgreens v. City of Madison that the drugstore chain had been over assessed for tax purposes.

Critics of the “dark store theory” of assessments, such as the League of Wisconsin Municipalities, say the tactic shifts a greater portion of the property tax burden onto homeowners and smaller businesses. The only other course of action for municipalities when big box stores get their assessments slashed is to cut services because of less tax revenue.