On the docket: Michigan legislature and the ‘Dark Store’ theory.
The dark store theory is a heavily discussed matter within the past year or so. The ‘dark store’ name derives itself from the idea that a fully functioning big box store is valued at that of (or even less than in some cases) a ‘dark store,’ a store that is no longer in business; is vacant, empty and unattended to.
A loophole exists within legislation in which big box stores (chain stores like Target, Wal-Mart, Lowes, Menards, etc…) pay property taxes not true to the assessed value of the land they are built on, or the vacant buildings they take over. This loophole is legal, so it is important to highlight that big box stores are not breaking the law; they are simply following the rules. In some cases, the property tax is valued at less than the value of the land without any building on it; less than what the dirt on the land is actually valued as.
Take for example, a plot of land valued at 12 million dollars. The property tax on this plot of land would be based off of the 12 million dollar assessed value. The loophole grants the assessed value of big box stores to be LOWER than, in this case, the 12 million dollar figure, thus creating a situation in which the store pays LESS in property tax than it ideally should. If the value doesn’t come in low initially, the store can appeal it and eventually be reassessed to a lower value. In the event this occurs, the city or town will have to issue a tax refund to compensate for the lowered tax value. Where does this money come from? Take a guess, you’re probably right.
Moreover, the stage is set so property values could fall near or around the big box stores, creating a perfect concoction of money loss and economical strife. Other taxpayers in the community end up taking on this large burden. How does a city make up for this loss in funds? Budget cuts and elimination of government funded entities like schools, libraries, parks, police and fire departments to name a few.
The ‘Dark Store’ theory and Marquette:
In Marquette alone, the Peter White Public Library has had to cut back operating hours due to budget cuts. Budget cuts preempted by a tax refund, paid by Marquette Township, to Lowe’s for an appeal of its true cash value; a reassessment of its property value. The people that run Lowe’s are smart, using all resources available to make doing business easier. Who can blame them?
On September 24, 2016 at 10:30 a.m. the Marquette County Citizens for Fair Share and Save MQT/ Save MI will be visiting Lowe’s in Marquette to “formally request a meeting with company executives.” Anyone who would like to participate is welcome to join the group in the parking lot of Lowe’s at 10:15 a.m. on the 24th.
On a lighter note, the B.R.I.T.E. Store initiative works to shine light on local businesses that support their local economies. B.R.I.T.E. stand for Businesses Recognizing the Importance of Tax Equality. High five the owners of local B.R.I.T.E. businesses!
What do you think? We’d really like to know! Watch the documentary as well. It provides good information and may clarify some of the points mentioned above. -Kalli
Thompson, K. (2016, August 28). A Call to Action. The Mining Journal. pp. 1A, 9A.
CloseMichiganLoopholes.org: ‘B.R.I.T.E. Stores’
UPMatters.com: ‘Marquette County Commissioners address dark store issue’
ILSR: Institute for Local Self-Reliance: ‘For Cities, Big-Box Stores Are Becoming Even More of a Terrible Deal’
MLive.com: ‘’Dark store’ tax assessment practice hurts local governments’
Upper Peninsula ABC 10: ‘Legislators aim to solve ‘Dark Store’ tax issues’
YouTube: ‘Boxed In’ documentary produced by Dwight Brady and Northern Michigan University students
The images pictured above depict the vacant JCPenney store in the Westwood Mall, Marquette, MI. This particular store may or may not represent low property tax values. The images are merely used to depict what a vacant big box store looks like.