State Sen. Janis Ringhand
Op Ed

Close the Dark Stores Tax Loophole

Would GOP legislators rather raise property taxes for others than lose political donations?

By - Feb 8th, 2018 05:00 pm


Earlier this week, Senate Majority Leader Scott Fitzgerald (R-Juneau) and Assembly Speaker Robin Vos (R-Burlington) declared that legislation to reign in the “Dark Store” property tax scheme will not be addressed in the final weeks of the legislative session. I have joined more than 60 legislators from all parts of Wisconsin to introduce two bi-partisan bills to reign in the Dark Store problem.

Simply put, failure to address the Dark Store tax scheme will lead to property tax increases for homeowners throughout Wisconsin.

Here’s how Dark Store tax scheme works. Big Box retailers have a developed the “Dark Store Theory” to lower the value of their commercial property and shift their property tax burden onto local homeowners. Using the Dark Store theory, corporate tax lawyers argue that new, fully operational Big Box stores be assessed at the same value as the empty, abandoned store they have left behind.

The corporate attorneys then seek massive property tax refunds from municipalities and threaten to sue if their request is rejected. They know that the deep pockets of the Big Box chains can extend a lawsuit for years and pressure the municipalities to settle for far less than the Big Box chain would pay under normal circumstances. This increases property taxes for homeowners, often by hundreds of dollars a year.

Make no mistake, by shifting the property tax burden, the Big Box chains are sticking it to local homeowners. From my vantage point, it seems that the only people who believe the Dark Store tax scheme is fair are the lawyers who developed the scheme, the lobbyists defending the scheme and the Big Box corporations who are making both rich.

Many say that as partisan legislative leaders, Majority Leader Fitzgerald and Speaker Vos are merely making a political calculation. They would rather risk raising the property taxes for thousands of homeowners throughout the state than stand up to some of their biggest political supporters.

The Dark Store legislation that I have co-sponsored are two of the most bi-partisan pieces of legislation to be introduced this session. Legislators from all parts of the state, Republican and Democrat, have joined to oppose the Dark Store tax scheme.

The Dark Store legislation has been unanimously approved by the Senate Committee on Revenue, Financial Institutions and Rural Affairs and would likely pass by wide margins, if only Senator Fitzgerald and Speaker Vos would allow them to come to a vote. But the lobbyists for the Big Box chains know that they only need the support of Majority Leader Fitzgerald, Speaker Vos and Governor Walker to stick it to homeowners and keep the Dark Store tax scheme in place.

State Senator Janis Ringhand (D-Evansville) is a former mayor, small business owner and community banker. She serves on the Senate Committee on Revenue, Financial Institutions and Rural Affairs.

Categories: Op-Ed, Politics, Real Estate

4 thoughts on “Op Ed: Close the Dark Stores Tax Loophole”

  1. Terry says:

    Republicans stole our voting rights through partisan gerrymandering and destroyed democracy itself in Wisconsin. Businesses like Menards and Kwik Trip support republicans financially. That is their right. However we are then left with no solution but to boycott such businesses. I prefer my voting rights to cheap household goods or crappy coffee.

    Dump Walker 2018
    Dump all republicans 2018

  2. A Bus Driver says:

    I agree with you 100% They are a bunch of treasonous traitors that only want to fill their bank accounts.

  3. Mike says:

    The only thing wrong with this article is that it is 100% inaccurate. For one, the senator doesn’t know who started the “Dark Store” theory – it was the assessors. It was developed to protect themselves from the gross over valuation of this property type. These stores are not “abandoned”. No different that selling a house, these stores are being sold because the location may not work for the retailer. While the Senator states that these big bad corporations are saying that their properties are worth the same as a vacant building and wants you to believe that this is inaccurate, it’s not inaccurate. The fact is that ALL owner occupied real estate (including a single family home) is sold vacant. We do not tax the real estate AND business for property tax purposes, we simply value the real estate. We determine what the property is worth by looking at other properties that have sold (just like a single family home). Adjustments are made to those sales to account for quality of construction, location, age, etc. so vacant or occupied, appraisal methodology should arrive at the same value. If I build 2 identical stores right next to each other, common sense says that they should have the same value. If the tenant of one of those properties makes a million dollars a year and the tenant in the other building makes a hundred, the value of the bricks and mortar remains the same. If one of those properties goes vacant, they are still worth the same because the real estate market has demonstrated that the market will pay “X” for that property based on sales of like kind property. Why don’t these buildings sell for much even when they are new? Simply because there are very few buyers for 100,000 to 200,000 SF of single tenant retail space. Supply and demand. These properties cost more to build than they are worth and that is fine because the user wants a custom building to fit their business plan. If they determine that the location is not working for them, they take a huge loss on the real estate. i.e. If a Vikings fan built a custom Vikings themed home in Green Bay, they may pay far more than a standard home would cost. The price of the customization is incurred buy the owner who knows that they will not recoup these costs in a sale, but they aren’t building it to sell – they are building it to enjoy. If they sell it, they take a huge hit. The senator is obviously speaking to something she has little knowledge of. How do I know? I am a Senior Accredited Assessor.

  4. A Bus Driver says:

    Dump Walker 2018
    Dump all republicans 2018

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