America's Property Tax Advisor

Michigan Big Box Retail Bill Advances


Michigan lawmakers return to work in September to address unfinished business including legislation to curtail "dark stores" tax appeals for big box retail.


Dark stores valuations use closed or sold store comparisons to determine the value of newer stores, often resulting in lower assessed values and tax bills for retailers.


HB 5578


Before the Legislature's summer recess, the House overwhelmingly passed House Bill 5578 and referred it to the Senate Finance Committee. The bill amends the Tax Tribunal Act to explain criteria applicable to valuations that consider comparable properties and probable use.


HB 5578 is one of several proposals introduced in the Michigan House and Senate within the last year to deal with dark stores appeals. It is the only measure passed by one body in Michigan and poised to be taken up by another sometime this fall.


Michigan Chamber Opposes Bill


The Michigan Chamber of Commerce is speaking against HB 5578. President and CEO Rich Studley said the issue is "much more complicated" than how it's been portrayed by local government advocates.


As the Michigan Chamber website states: "Michigan cities have been over-assessing property tax on large retailers and now want to legitimize their one-sided approach to valuing property by rigging the system in their favor. Michigan taxpayers have a right to fair and accurate assessments and an unbiased appeals process. Manipulating the assessment and appeals process will negatively impact all taxpayers."


Studley explained, "My sense is that a lot of what is driving this bill is the desire on the part of local government officials for more revenue. While it's not surprising that government officials would like more revenue, I'm not sure changing how property is assessed is the best way to go about that."


The proposed Michigan legislation comes on the heels of a new law passed in Indiana. It establishes a valuation method known as market segmentation that seeks to prohibit dark stores methodology by assessing property based on where it falls in a specific market class.