Concerns Rising Over Dark Store Loophole
Sixteen counties around
possibility of legislation to close a Dark Store loophole in state law. While
the question – our area is seeing some issues related to bigger stores
exploiting the opportunity to obtain lower property taxes.
Allen Buechel explains that companies will have their operating locations
assessed as if they are closed.
Buechel says “it
could be a different company store that is closed, and those things happen. But
then they can use that for a comparable when it comes to assessing property.
That’s the comparable they use, not an operating store.”
Despite the topic not being on local ballots, Buechel believes that action needs to be taken to address the issue.
He tells us “what we’re trying to do is say ‘let’s stop this and set the standard where it
ought to be’ and then that will eliminate the opportunity for these companies
to appeal. Right now they hire attorneys who represent these companies – and
they go from one store to the other, and they have been very successful. So
that’s why we’re concerned, because this is just a growing situation.”
Buechel tells us the lower taxes for larger companies is forcing municipalities to lean more on smaller businesses and property owners to foot more of the tax income. In 2017, residential properties accounted for 68-percent of
the roughly $11 billion paid in gross property taxes.
He says as companies continue to appeal, there is more concern than just having them pay lower tax rates.
Buechel points out that “the problem is, from the start of the appeal process – if two years later the store is rewarded the reduced assessment, then they can go back to the time this whole thing started – so then, not only do they get a lower tax bill next year, they get a refund on the one or two years from the interim.”
Buechel says he is not very optimistic about the loophole being closed, even if voters push for the legislation to be introduced.