Dark Store Bills Reintroduced in Michigan Legislature | News, Sports, Jobs

JENN HILL

Michigan lawmakers will make another attempt to close a “dark shop” According to her, a tax loophole has cost municipalities an estimated two billion dollars in lost tax revenue over the past few decades.

Rep. Jen Hill (D-Marquette) said a bipartisan group of lawmakers has introduced a package of legislation to fix the problem. The initiative also includes Democratic Reps. Julie Brixie of Okemos and Mai Xiong of Warren, and Republican Rep. Greg Markkanen of Hancock.

In a news release Wednesday, Hill said the main benefit of the bill is that it ensures a fair property tax assessment for large retailers, thereby returning lost revenue to Michigan’s communities. Dark store loopholes allow retailers to reduce their property tax debt by arguing in court that their stores should be taxed based on the sales prices of vacant, often restricted, stores, Hill said.

It is a significant problem for the Upper Peninsula and communities across Michigan, while other states such as Wisconsin and Maine have taken action to address it. In Michigan, legislative changes were supported in previous sessions but failed to reach the governor. Both the Michigan Retailers Association and the Michigan Chamber of Commerce have spoken out against previous efforts, claiming the bills are aimed at “long-standing principles for real estate valuation.”

“The lawyers have developed a very successful legal argument to significantly reduce property taxes for which citizens and small businesses cannot qualify,” said Markkanen. “This is a legal argument that has been used across the country with varying degrees of success. It has been particularly successful in the state of Michigan, where rural communities have been disproportionately affected. It is time to close this legal loophole in Michigan.”

GREG MARKKANEN

House bills 5865-68 would prohibit retailers from using vacant, property-restricted stores as comparables, require plaintiffs to submit appraisals during appeals, and establish standards for the Michigan Tax Tribunal’s independent determination of true cash value to ensure it is done in accordance with generally accepted appraisal principles, the press release said.

“Residential communities across the Upper Peninsula have been unfairly burdened by the dark store loophole for far too long, and the loss of public revenue has ruined local services. Our legislation will ensure that big-box retailers pay their fair share of property taxes, just like every other business and homeowner.” said Hill.

Marty Fittante, CEO of InvestUP, a regional business organization for the Upper Peninsula, said a solution is long overdue.

“Our communities in the Upper Peninsula are powered by small businesses. Unfortunately, many of our locally based businesses are severely disadvantaged under current law because large national retailers can receive unjustified and unfair property tax breaks,” Said Fittante. “We are grateful for this bipartisan effort to ensure that all retailers are treated equally and that small, local retailers have a chance to compete,” he added.