Nobody enjoys paying taxes. But a new report suggests that some big box retailers have figured out a way to cut their local property tax bills significantly, in a way that winds up shifting the burden to everyone else.
It's called "dark store theory," and it involves pressing local governments to assess corporate property like big box stores and warehouses based on what the facilities would be worth if they were vacant and on the market, as opposed to busy, profitable businesses.
Among the companies pursuing the strategy: "Walmart, Home Depot, Target, Kohl's, Menards and Walgreens," along with many others, according to The New York Times, which says the strategy "started to gain traction in a few states in the mid-2000s, but has snowballed in the last year."
Successful assessment appeals have a domino effect, some analysts say, because each corporate victory drives down not only their own assessments, but the comparative value of other properties as well.
The ultimate tax savings is significant: $100 million over four years in Michigan, and perhaps $2.6 billion a year total in Texas, according to government officials. But ultimately, it means either cutting services, or increasing the taxes of local residents--and the smaller businesses that the big companies compete with. Maybe businesses like yours.
Here's what else I'm reading today.
- The Trump administration says it's changing the law to let the IRS issue refunds
- Great Again! Tesla starts building its China Gigafactory
- Amazon Go stores bring in 50 percent more revenue than regular ones
- Billionaire pays $1 million to get Twitter followers and become internet famous
- Starbucks moves away from the era of Howard Schultz
- Finally, the app you've been waiting for (not really)
- Netflix had a brilliant response to Hulu's show winning a Golden Globe
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