Large retailers are using a legal tax loophole to challenge their property tax assessments, the latest one affecting the city of Rhinelander.
The city was notified January 11, that Menards has filed a claim of excessive assessment and is seeking a $51,000 refund for its Rhinelander store. The loophole being used successfully in other states is called the Dark Store loophole.
Jerry Deschane is the Executive Director of the League of Wisconsin Municipalities.
He describes the loophole...
"...they argue that even though their store may have cost $10 million to build and maybe on a thriving retail corner, they're arguing that because their building is so unique, the only thing you can use as a comparable for tax purposes is an abandoned retail store. That's where the name 'dark store' comes from...."
Deschane says the big box retailers have been successful in court challenges in other states and the loss in property tax revenue is concerning to most municipalities....
".....these big commercial properties come into town and make a positive difference for the commercial sector, but one of the consequences is they have a big tax footprint. Ten, twenty, thirty, forty, fifty, sixty thousand dollar tax refunds are not out of the question....."
In the Menards claim in Rhinelander, they state the city's assessment of the property is $8.4 million while they say the fair market value is at most $5.9 million, and are asking for a refund. Deschane says their group is working with the Wisconsin legislature to change the law.
