Close the Dark Store loophole
The state of Wisconsin needs to look out for little guys when it comes to property taxes rather than continually kowtowing to mega-billionaires.
In 2019 city of Medford residential taxpayers got the short end of the stick when the city’s attorneys reached a settlement with Walmart to reduce the retail giant’s assessment from the previous $8.3 million down to its current assessment of $6.4 million and to refund Walmart dating back to 2017 when the company first contested its assessment.
The drop resulted in a direct tax shift from the multi-billion dollar retail giant to area taxpayers to the tune of about $40,000 a year. To put this in perspective, last year Walmart reported earnings of $587 billion, while the median household income for the Medford area was just about $41,000 last year.
With the terms of the previous agreement running out, Walmart has come back to the city looking to unload even more of its property tax obligations onto the backs of local homeowners. As a reminder, local property taxes pay for things such as police protection, snow removal and road maintenance — all things Walmart directly benefits from as does every other resident and property owner.
At last week’s board of review meeting, the city waived Walmart’s appeal directly into circuit court rather than go through the step of a hearing. The assessment will likely drag on for months and end up being settled in court.
Medford is not unique in being singled out by Walmart, nor is Walmart the only mega-retailer seeking to shift its tax responsibilities onto the backs of residential property owners. Retail giants such as Lowes, Menards and others have taken municipalities to court around Wisconsin arguing their taxes should be lower. The common denominator to all of these cases is the so-called Dark Store loophole that exists in Wisconsin’s tax code. Under the dark store loophole successful retailers can claim their property tax assessment is too high because there is a vacant store in the surrounding region. While some, such as here in Medford, were due to store closures such as the former Kmart building, others around the state have been caused by retailers moving into newer, bigger locations.
The outcome of Medford’s current tax battle with Walmart will be heavily influenced by a case between Lowes and the city of Delavan scheduled to be heard by the Wisconsin Supreme Court later this month. It will likely be spring 2023 before a decision is announced.
The court’s action is the result of direct cowardice on the part of the Wisconsin State Legislature to follow states, such as Indiana, and close the loophole. Despite broad bipartisan support for efforts to close the loophole, the influence-peddlers at the Wisconsin Manufacturers and Commerce have made it a mission to see that never sees the light of day.
Rather than leaving it up to the courts to make law, members of the Wisconsin legislature need to put constituents first and take action to close the Dark Store loophole.
Members of The Star News editorial board include Publisher Carol O’Leary, General Manager Kris O’Leary and News Editor Brian Wilson.
