A referendum question to close a pair of property tax loopholes will be on the Nov. 6 general election ballot.
Monroe County voters, along with voters in 16 other counties, will weigh in on the “dark store and “Walgreen” loopholes. Critics contend the loopholes lead to tax breaks for large retail outlets while shifting taxes to other taxing entities such as homeowners.
JoAnn Cram, Tomah city clerk, said unless the state legislature closes the loopholes, other property owners could pay up to eight percent more in taxes.
The dark store provision allows a large retailer such as Walmart to have the value of its building assessed as if it’s empty, Cram said.
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“If a store cost $14 million, they say the value should be $7 million, and the loopholes allow them to do that,” she said. “So we lose $7 million (of assessed value) and the other taxpayers have to pay for that ... and more big box stores are trying to jump on that bandwagon.”
As a result, the stores pay a smaller share of property taxes and continue to utilize more city services, which shifts the tax burden onto other properties.
The Walgreens loophole stems from a 2008 Wisconsin Supreme Court ruling which allows national pharmacies and other businesses who lease their stores to claim the value of those properties are less than half of the purchase price for tax purposes. Nearly 300 pharmacies in Wisconsin can take advantage of the loophole, and other commercial and manufacturers are starting to use it.
Cram said the efforts to close the two loopholes continually get stalled by the state Legislature.
Senator Jennifer Shilling, D-La Crosse, shares Cram’s concerns and wants to see the loopholes closed.
“This issue is impacting communities across the state, and it’s one of the reasons we saw a jump in property taxes this year,” she said. “It’s disappointing that despite broad bi-partisan support, Republican Senate President Roger Roth killed the bill twice in the Senate. Democrats are committed to restoring tax fairness and closing the dark store loophole next session.”
Meghan Flynn can be reached at firstname.lastname@example.org.