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Lawmakers to make major push to end property tax discounts for big box stores

Aug 10, 2015

A Walmart Superstore
Credit Wikimedia

A bipartisan group of state lawmakers say they’ll make a major push in the fall to end special property tax discounts for big box stores.

The stores are able to appeal property tax assessments to the Michigan Tax Tribunal to get a more favorable calculation of what they owe.

But state Rep. John Kivela (D-Marquette) says the tribunal treats the buildings as if they’re vacant to give the stores a big discount. He says that’s unfair to locally-owned businesses who can’t get the same discounts.

“We’ve got these big box stores - like the Lowes and the Menards, Home Depots, Walmarts, Targets – that are contesting their taxable value and getting significantly reduced tax rates, going from 60 to 70 dollars a square foot to 25,” said Kivela.

“We’re saying the tribunal has to follow the same rules that the locals have to follow so we come up with the same numbers.”

Kivela and local officials say the practice is costing communities millions of dollars every year.

The Michigan Court of Appeals last year made it easier for big box stores to challenge their property tax bills.

As part of the legislative effort to crack down on the special discounts, lawmakers plan to introduce legislation to stop big box stores from refusing to sell old buildings to other retailers. National chains can purchase deed restrictions to prevent competing stores from moving in to their former locations.

Kivela says the practice creates blighted buildings that are holding back development in retail districts.

“They’ve fundamentally controlled now the zoning and the planning of that community with their checkbook to stave off competition. Is that right?” said Kivela.

And he says it complicates the property tax assessment issue because chains are able to use the vacated properties as comparisons for the value of other stores that are currently in use.