Steven Walters
The State of Politics

Growing Concern Over Dark Store Loophole

Shift of property taxes from retail stores to homeowners worries many Republicans.

By - Apr 23rd, 2018 01:02 pm


The “dark store” controversy now ranks with the failure to pay for long-term highway construction as the most difficult issues facing the governor and legislators seeking reelection in November.


*More than half of all legislators – including the Senate president and the assistant Assembly majority leader – cosponsored bills to limit the “dark store loophole,” but they died in the final hours of the legislative session.

*The City of Franklin sent Lowe’s a check for $25,000, reimbursing the retail giant for past property taxes the chain argued were based on unfairly high assessments. Franklin will refund Lowe’s another $35,000, Democratic Sen. Chris Larson said last week.

*A Rock County senator, Democrat Janis Ringhand, says every Janesville homeowner pays $560 more in property taxes as a result of the dark store loophole.

*The League of Wisconsin Municipalities says more assessment challenges are being filed citing “dark banks.”

*Boston and Younkers stores will close statewide, ultimately lowering commercial property values in Milwaukee, Madison and 11 other municipalities. Sam’s Club stores closed in Madison and West Allis.

What is the dark store controversy? Increasingly, retail chains, their lawyers and lobbyists are arguing that the assessments of open – and even thriving – stores must reflect the much lower value of closed, or “dark,” stores.

As Lowe’s, Walgreens, Wal-Mart, Menards and other retailers win those appeals – in court or in fights with local assessors who must follow court rulings – property taxes are being shifted from commercial properties to homeowners, according to some of the more than 70 legislators who sponsored bills to stop that shift.

Those bills, whose Republican sponsors included Senate President Roger Roth, of Appleton, and Assistant Assembly Majority Leader Robert Brooks, of Saukville, would have said assessments of open stores could not be based on “dark property …vacant or unoccupied.”

Instead of bringing the bills up for votes, Assembly and Senate leaders vowed to create a Legislative Council study committee on the issue. Its members have not yet been announced.

Ringhand, who twice tried to force Senate debate on the bill only to watch GOP senators kill something they had cosponsored, said homeowners have a lot to lose when retailers, banks and other businesses don’t pay their fair share of property taxes.

“The expansion of the dark store loophole should concern every municipality,” Ringhand said. “Expanding [it] to include banks and restaurants would lead to massive property tax increases for homeowners in communities of all sizes.”

That also worries Jerry Deschane, executive director of the League of Wisconsin Municipalities. “One of our greatest concerns is that enterprising tax lawyers have started trying to expand the dark store argument to dark banks and even dark fast food,” Deschane said, adding:

“So far they’ve been unsuccessful but there are big dollars involved… Dark store and Walgreens loopholes are already on track to shift their taxes to others and pushing residential and small business taxes up by 8 percent statewide. If we start to see more dark business tax breaks, that increase will be even higher. “

But Don Millis, the veteran attorney who successfully lobbied against the dark store bill on behalf of Wisconsin Manufacturers & Commerce, said Ringhand and Deschane want to change what has “been the law in Wisconsin for nearly a century.”

In a 1922 ruling, the state Supreme Court “held that the proper measure of value of a property is what it would sell to another – not what it is worth to the current occupant, not necessarily what it cost to construct and not considering the current owner as a potential buyer,” Millis said.

The dark banks argument is not new, Millis added. He said he has often appealed assessments using “the sale of vacant branch banks to value-occupied bank branches. Assessors have considered these sales, [and] adjusted assessments accordingly …  The same is true of restaurants, hardware stores, warehouses, factories, even homes.”

“What Jerry calls dark stores, dark banks, dark [fill-in-the-blank] has been the practice and the law in Wisconsin for decades,” Millis said.

Millis made one more point: Commercial and manufacturing assessments increased as a share of property values statewide from 20.7 percent in 2008 to 22.8 percent in 2017. In that same period, residential property values fell from 73.8 percent of property values statewide to 72 percent.

“The sky has not fallen,” Millis insists.

Steven Walters is a senior producer for the nonprofit public affairs channel WisconsinEye. Contact him at

More about the Dark Store Loophole

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3 thoughts on “The State of Politics: Growing Concern Over Dark Store Loophole”

  1. Kurt says:

    Check out the property taxes on a 1 bed 1 bath condo in the Third Ward (then take a big breath of the toxic sewer air…coming with greater strength as the weather warms).

  2. Sam says:


    That isn’t remotely true. If you own a condo in the Third Ward and don’t like it, feel free to sell and move some place else. If you don’t, the market for condos in the Third Ward would show you that taxes and the “toxic sewer air” aren’t deterring buyers.

  3. Kurt says:


    I know I steered away from the topic here. I know the condo market in the Third Ward is fine. I’m a bit obsessed with how bad it smells in my neighborhood once the warm weather kicks in and I have the habit of taking every conversation and making it about the repairs needed on Jones Island.

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