Area communities reveal how much they're losing under Wisconsin's dark store loophole

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APPLETON, Wis. (WBAY)- We've been looking into the state's dark store loophole and Action 2 News has uncovered just how much it's costing taxpayers here in Northeast Wisconsin.

The loophole is designed to give big box retailers a break by allowing an operational store to be assessed based on the value of a closed property.

In some communities it's led to hundreds of thousands of dollars being paid back in property taxes, and ongoing legal battles, all of which could cost you.

Governor Tony Evers said just this week he will offer a proposal to close the dark store loophole in his upcoming budget address which will take place before the end of this month.

However, it's unclear if Republicans who control the state legislature will actually be on board.

"It's a fairness issue," said Appleton Mayor Tim Hanna.

According to Hanna, the dark store loophole has already cost the city about $300,000 in legal fees and more than $802,000 in property tax refunds given back to four companies.

This includes $385,633 for Walgreens; $335,036 for CVS; $79,128 for Target; and $2,313 for KFC.

"It's going to cost individual homeowners more. They're going to pay more for the same services because the commercial class of property is paying less," said Hanna.

It's not just Appleton.

Oshkosh Mayor Steve Cummings told Action 2 News $307,000 was given back to Walgreens and more than $100,000 to Lowe's in order to settle property tax lawsuits.

In Fond du Lac, City Manager Joe Moore said Menard's was refunded a tax credit of $28,412.98 just recently after they, too, used the loophole.

Grand Chute has refunded $678,457.51 between 2013 and 2017. This was split almost equally among Sears, Macy's and Fleet Farm.

Plus, the town has pending lawsuits right now with Walmart and Sam's Club.

Grand Chute Town Chairman Dave Schowalter said, "They pay double tax in Minnesota right next door than what they pay over here, and now they want to reduce it more."

Schowalter wrote a column in a recent town newsletter warning residents about the potential for rising taxes because of the loophole.

He specifically calls out state Senator Roger Roth, who sponsored legislation to close the loophole which never received a vote.

Efforts in the state Assembly met the same fate.

"We have rules set up in the Senate to make sure that bills that are on the calendar have adequate time for the public to understand what's happening, and we would not violate those rules, but I'm a firm supporter in this," responded Roth, an Appleton Republican, when asked by Action 2 News about Schowalter's column.

Senator Dave Hansen says the legislation should have been given a vote.

"It is beneficial to the top one percent but detrimental to the rest of us," said Hansen. The Green Bay Democrat added, "They do not need the dark store loophole."

One organization against eliminating the loophole is Wisconsin Manufacturers and Commerce.

In a statement, WMC Senior Vice President of Government Relations Scott Manley said, "Taxpayer funded lobbyists have pushed this legislation in an effort to cover up overly aggressive and illegal assessments of small businesses, retailers and manufacturers. This policy would raise taxes on local businesses, raise costs for consumers and should be rejected."

Hanna was among those who spoke in favor of closing the loophole during a hearing in Madison last year.

"It's about who funds campaigns. There were more sponsors on these bills than needed to actually pass the bills, but neither one of them could get to the floor. It's about politics," he said.

Senator Roth told Action 2 News he will reintroduce his bill this session.

However, Republican leadership hasn't indicated if they will do the same in the Assembly.



 
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