America's Property Tax Advisor

Kansas Supreme Court Rules Against
Dark Store Theory


In a unanimous decision, the Kansas Supreme Court reversed a Board of Tax Appeals ruling involving 11 Walmart and Sam's Club "big box" stores in Johnson County that saw their valuations nearly double from 2015.


The Board of Tax Appeals concluded the County's valuations were too high because they improperly relied on unadjusted sales and rental income data from other properties subject to build-to-suit leases. A common name for the theory that the Board agreed with is the “dark store theory.” Walmart argued that the value of the business itself should not be factored into the property value, saying the stores should be assessed as if they are empty buildings, or dark stores.


The Kansas Supreme Court effectively overruled the dark store theory and sent the case back to the lower court to re-examine the county’s evidence.