Discount center: As the “retail apocalypse” rolls on, many cities are struggling to make up for the lost tax revenue they’ve come to expect from brick-and-mortar businesses. As it turns out, some surviving big-box retailers—like Walmart and Target—have found a way to trim their own expenses in a way that only amplifies cities’ budgetary pain. And they are focusing their efforts on a forum that few residents might notice: property tax assessments.
It’s called “dark store theory,” and it’s essentially a novel argument that bustling big boxes should be taxed more like vacant “dark” stores. That means tax assessments value these open, functioning outlets as it they were the shuttered “ghost boxes” that have become increasingly common on the fringes of towns and suburbs. With appeal after appeal, retail giants are succeeding in persuading tax assessors and judges to accept these lower valuations.
CityLab’s Laura Bliss went to the epicenter of this theory, Wisconsin, to meet the mayors, assessors, and lawyers dueling over dark stores. Since 2015, the Badger State has seen 230 appeal cases in 34 counties, many as repeat appeals on the same properties. These appeals can add up to millions in tax refunds across towns. In the wake of yesterday’s Amazon HQ2 news, here’s a different story about the shifting fortunes of the retail landscape, the creative ways big companies avoid taxes, and the handouts towns keep offering to lure them in. Read Laura’s report: After the Retail Apocalypse, Prepare for the Property Tax Meltdown
