'Dark Store' Bills in Limbo as Macy's Sues Grand Chute

Another national retail chain is using a legal loophole to challenge a small Wisconsin town over its tax assessment. Meanwhile, legislative proposals to address the issue remain in limbo three months after being introduced by GOP lawmakers. ‘Dark Store’ Bills in Limbo as Macy’s Sues Grand Chute

August 22, 2017

Abandoned Building

Earlier this month, Macy’s Inc. sued Grand Chute, claiming the town’s $11.4 million property assessment on its store there was too high. The luxury store chain said its store was worth only $7 million, which would reduce its tax bill from $211,200 to about $130,100. Sears has also sued Grand Chute over the tax assessment of its store there.

Other large chain stores, including Walgreens, Menards, Target, and Lowe’s, have successfully challenged and slashed their local property tax assessments numerous times throughout the state in recent years. They have argued the value of their operating stores should be based on the substantially lower tax assessments of empty big-box stores. This so-called dark store loophole is based on a 2008 Wisconsin Supreme Court case that municipalities say artificially lowers the value of operating stores and unfairly shifts large property tax burdens to homeowners and smaller business. Municipalities also say the assessment challenges are creating large legal costs.

Legislative proposals to close the loophole, Assembly Bills 386 and 387 and Senate Bills 291 and 292, were introduced in early and mid-June, and a version of each bill received a public hearing a few weeks later. AB387 and SB291, sponsored by GOP Sen. Duey Stroebel and Rep. Rob Brooks, both of Saukville, would require big-box stores to be assessed at their “highest and best use.” AB386 and SB292, sponsored by GOP Sen. Roger Roth, of Appleton, and Brooks, would prohibit tax assessments on operating stores from being based on nearby rundown or abandoned properties.

But there’s been no other progress on the bills in about two months, in part because of the summer-long legislative stalemate on a new 2017-19 state budget. The budget plan remains unfinished because of differences between majority Republicans in the Assembly and Senate on tax, education and transportation funding issues. And in recent weeks, legislators have turned their attention to a proposed $3 billion corporate welfare package for Foxconn, a Taiwanese electronics manufacturer, to build a factory in southeastern Wisconsin.

The other drag on the bills might be opposition from a host of special interests led by Wisconsin Manufacturers & Commerce (WMC), the state’s largest business organization and a traditional election-time ally of most Republican legislative and statewide candidates. More than a dozen groups and businesses have used the time to line up against the proposals because they could cost major retailers hundreds of thousands of dollars more in taxes that are now paid by small businesses and residents.

In addition to WMC, the other groups and businesses that are opposing one or both of the bills are:

Americans for Prosperity

Aggregate Producers of Wisconsin

Alliance of Wisconsin Retailers

CVS Health

Marathon Petroleum

Metropolitan Milwaukee Association of Commerce

Outdoor Advertising Association of Wisconsin

T. Wall Enterprises

Union Pacific Railroad



Wisconsin Hotel and Lodging Association

Wisconsin Independent Businesses

Wisconsin Property Taxpayers

Wisconsin Grocers Association