Dark Store Property Tax Valuation
Adopted at the in 2017
WHEREAS, local governments are primarily dependent on property tax to fund basic services; and
WHEREAS, national chains are increasingly using litigation and novel arguments about how to asses property to dramatically lower the assessed value of their property; and
WHEREAS, the resulting substantial reduction in assessed value has forced some cities to dramatically cut public services, and in other cities it has shifted the tax burden to homeowners and local businesses; and
WHEREAS, chains stores have used the unique nature of their financing and leases to argue that the assessed value of their property for property tax purposes should be half of their actual sale price on the open market; and
WHEREAS, other chain stores are using the "Dark Store" theory to argue that the assessed value of a new store in a thriving location should be based on comparing their buildings to sales of vacant stores in abandoned locations from a different market segment; and
WHEREAS, the scope of these tax avoidance methods have become acute enough in Indiana, Wisconsin and Michigan that there are state legislative efforts to rein them in by ensuring that - 'leases are appropriately factored into valuation, and - comparable sale valuations consider only sales in the same market segment; and
WHEREAS, as the efforts of these chain retailers spread nationwide it has the potential to create a competitive disadvantage for local businesses, raise taxes on local homeowners, and damage local economies,
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NOW, THEREFORE, BE IT RESOLVED, that The United States Conference of Mayors requests the Metro Economies Committee to examine the issue of nationwide chains using litigation to create new means of lowering their taxes and report back to Mayors.