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Criminal Justice & Legal System

Local governments could recoup millions from appeals court ruling

Local governments say the "dark store" approach to valuing big-box stores has cost them dearly.
Daniel Incandela
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flickr http://j.mp/1SPGCl0
Local governments say the "dark store" approach to valuing big-box stores has cost them dearly.

Local governments are cheering a state Court of Appeals decision that could mean millions of dollars in property taxes. Big box retailers like Lowes, Menards, and Meijer have successfully argued that assessors should look at vacant stores to determine their value. The strategy has led to dramatically lower taxes. 

Critics say it’s a tax dodge that’s not fair to other taxpayers who have to pay more in fees and tax millages.

“The burden is going to be on the residents and small business owners to pick up those millages, so if the millages increase, that’s where the tax shift will occur," said Steve Currie with the Michigan Association of Counties. 

Currie says local governments have also been forced to cut police and fire, road repairs, and close libraries from the tax decisions. 

Retailers say the fight is not over.

“All they did was send the case back to the Michigan Tax Tribunal to gather additional evidence,” said Tom Scott with the Michigan Retailers Association. “So no one knows really what the final outcome is going to be. That’s still to be determined.”

The case pitted Menard’s against the city of Escanaba in the Upper Peninsula. Menard’s could appeal the decision to Michigan Supreme. The Legislature is also working on a bill to close the loophole.       

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