America's Property Tax Advisor

More Challenges to Dark Store Assessment


Wisconsin is the latest state to seek laws prohibiting the dark store methodology of big box retail. Dark store valuations use the sale prices of closed stores to determine the value of operating stores, often resulting in lower assessed values and tax bills for retailers.


The Indiana Legislature approved two laws restricting dark store methodology, and a proposal was recently introduced but not passed in Michigan.


Tax Shift Concerns


Officials with the League of Wisconsin Municipalities say they are concerned about the possible tax shift that could occur if the dark store valuation model is adopted statewide by commercial property owners.


"If all, or even a great majority of commercial property owners start challenging their tax bills by employing a similar strategy, it could reduce commercial property values across the state by up to 50 percent," Curt Witynski, the league's assistant director said.


Lobbying Efforts


The league has been working for the past two years to get legislation introduced to prevent assessors from valuing big box retail based on comparable vacant stores.


Language was drafted last year but a bill was never introduced. Specifically, the league sought:


  • A motion clarifying that for property tax assessment purposes, real property includes licenses and leases pertaining to the land and improvements.

  • A separate bill addressing the dark store strategy being employed by big box national retail chains.


For the next legislative session, the league proposes rolling legislation into the budget bill as part of a broader tax reform package.