Big-box retailer continues its fight for fair property tax assessments

| Jul 13, 2021 | Big-box retail

As readers of our Minnesota Commercial Property Tax Appeals Blog know, we have repeatedly detailed the fight waged by businesses for fair and accurate assessments of commercial properties. As part of our coverage of the topic, we have examined the efforts of big-box retailers such as Walmart fighting against overvaluation of their properties in Anoka, Martin, Winona and Washington counties.

Of course, these kinds of battles aren’t limited to Minnesota. The world’s largest employer faces discriminatory assessments in many places, including Oshkosh, Wisconsin, about four hours east of Minneapolis.

Lawsuit filed

Walmart recently filed a lawsuit against Oshkosh, arguing that its supercenter there isn’t worth nearly as much as the city assessor thinks. Walmart argues that the property is worth $10.4 million, not the $13.1 million value determined by the city.

The Oshkosh Examiner reports that this is the third year in a row that the big-box retailer has filed a lawsuit against the city. The 2019 lawsuit was settled out of court, while a status conference will be held soon in 2020’s suit.

‘. . . significant rebates . . . ’

The newspaper notes that Lowe’s and Menards have in recent years “won significant rebates from the city” in similar fights over commercial property assessments.

City officials say the big-box retailers “are taking unfair advantage of the assessment process” with their “dark store” arguments, the Examiner reports. “Dark store” theory holds that because big-box buildings are tailored very specifically for particular retailers, the customized structures would have low values if the retailers moved out and left the stores dark.

Proponents of dark store theory argue that these properties should be assessed by comparing them to vacant properties.

‘. . .  significant property tax reductions . . . ‘

The League of Wisconsin Municipalities says big-box retailers are exploiting two loopholes “to demand, and receive, significant property tax reductions.”

The first “loophole” allows assessments based on comparisons to vacant stores and the second is based on a 2008 lawsuit. The Wisconsin Supreme Court’s decision, in that case, prevents assessors from considering “rent in determining the value of certain types of retail income property.”

We’ll update you as developments in the Oshkosh case occur. Please check back.