By Jason Arndt
Whenever big box retailers such as Walmart use the dark store loophole to avoid paying higher taxes, residents and small businesses pay the price, which has caused most state municipalities to urge lawmakers to stop the practice.
The City of Burlington, which has not experienced any big box retailers employing the strategy, could consider joining the dozens of other municipalities in the campaign after the Common Council discussed the issue at the Oct. 2 Committee of the Whole meeting.
The campaign is a joint effort between the Wisconsin League of Municipalities, Wisconsin Counties Association and Wisconsin Towns Association
Collectively, the three agencies contend big box retailers use the loophole to pay the same tax assessment on their properties as closed and vacant retail properties in unfavorable areas.
They are urging state lawmakers to pass legislation to close the loophole.
According to City Attorney John Bjelejac, the big box retailers’ argument is they do not want tax assessors to take a thriving business district into consideration when evaluating the property, which is a contentious issue.
“It is a tough issue before us because big boxers, they are saying to the world value real estate,” he told the Common Council.
Bjelejac, who supports the resolution, believes the city could receive considerable backing from other municipalities and the three agencies tasked with the campaign.
Shifting the burden
City officials reported the current law creates a burden on taxpayers, noting a study consisting of 12 municipalities.
The study indicates if the loophole continues, the average resident would see an 8 percent increase in property taxes.
Currently, Wisconsin homeowners pay a higher share of property taxes compared to neighboring Minnesota, which has its residents paying 50 percent of the property tax levy.
In Wisconsin, however, homeowners assume 68 percent of the statewide levy.
The dark store loophole also forces residents to pay higher taxes for municipal services, like the police department, which often spends more time at big box retailers enforcing crimes, like shoplifting.