Rhinelander allocates funds to fight “Dark Store” loophole
BY NAOMI KOWLES
FOR THE STAR JOURNAL
Rhinelander’s Finance, Wage and Salary Committee voted Tuesday to send $1,200 to the League of Wisconsin Municipalities (LWM) to assist the organization in their campaign to legislate solutions to the “Dark Store” and Walgreens tax loopholes. The funds were requested in a letter to local governments throughout the state from Jerry Deschane, the executive director of the LWM.
The “Dark Store” tax loophole is a legal argument used by major Wisconsin retailers to allow their store’s property tax value to be comparable to empty stores. In 2017, the city of Rhinelander settled a lawsuit with Menards with a refund of almost $16,000, in response to the retailer’s claim that the total assessed value had been overestimated by more than $50,000; a claim based on the “dark store theory.”
“The dark store theory enables retailers to pay lower taxes on stores by arguing that their stores are similar in value to vacant (i.e. “dark stores”) stores–even if those stores are in different parts of the state,” city attorney Carrie Miljevich explained at the time of the suit.
Both Rhinelander and Oneida County have passed resolutions in the past advocating for a solution to the legislative loophole; a loophole that according to the LWM can force increases to property taxes for homeowners by an average of 8 percent.
“Walgreens and CVS stores use a different, but related strategy, to argue that the assessed value of their properties should be less than half of actual sale prices on the open market,” the LWM explains on their website. “The two have already sued more than 100 Wisconsin communities, claiming the rent they pay for their newly-constructed, highly visible corner locations doesn’t accurately reflect its fair market value for property tax purposes.”
According to the letter, the League Board has directed the LWM to form an “issue advocacy campaign” to get the problem addressed by the Legislature.
Council president George Kirby made the motion to contribute the $1,200. “We have to step up…the League is lobbying for anyone who has a Walgreens in their town,” he noted. “We got to support them.”
Finance director Wendi Bixby recommended the money be drawn from administrative legal fees.
“It really affects everyone in the city,” council member Steve Sauer said.