Michigan Bills Target Assessment Practices for Big Box Stores

Posted by Written on November 05, 2015 at 01:50 PM

Michigan lawmakers from both parties introduced bills this week aimed at stopping a common valuation method they say gives “unfair property tax breaks” to big box stores. According to the Detroit Free Press, local governments across the state say they are losing millions of dollars in taxes because big box stores are unfairly getting their assessments slashed by using the "dark store" theory in appeals. However, big box store owners uphold this is an appropriate valuation method, arguing that since they wouldn't sell their stores to other retailers, assessors should look at sales of stores that have gone out of business and are vacant, since that's the only way they would ever come on the market. The 'dark store' approach to determining value has been upheld by the Michigan Tax Tribunal and state courts.

In a press release from the Michigan Retailers Association, they say the legislation unfairly singles out one type of property for special treatment by assessors, violating the uniformity provision of the Michigan Constitution. The MRA argues that changing local property assessment practices on large retail stores amounts to "assessor overreach" and an unconstitutional tax increase. In addition, they warn that allowing assessors to assess retail property differently would create a slippery slope that could extend similar unconstitutional treatment to other types of businesses, including manufacturers. The MRA says the bills would send "a chilling message to potential investors that Michigan is not open for business. It is a step backwards from the strong progress Michigan has made."

For the full article from the Detroit Free Press, click here.

For the Michigan Retailers Association’s press release, click here.

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Categories: Michigan, Big Box, Real Property, Retail

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