Dark Store Tax Loophole 

The Issue:  The “Dark Store” strategy of property tax assessment is looming large over communities throughout the state of Wisconsin and unfortunately could soon be coming to your city or village.  In fact, it may already be there.

In essence, the Dark Store strategy is a tax loophole being used by Big Box retailers and other national chains to lower the amount they pay in property taxes. Retailers such as Lowe’s, Target, Meijer, Home Depot, Menards, Walgreens, and CVS are arguing that the market value of their thriving store should be based on the sales of similar size “comparable” properties that are vacant and abandoned.

What? You mean a fully operational store, like a new Target, gets to pay the same property taxes as a closed, empty and “dark” K-Mart down the street? Yes, that’s exactly what the retailers are fighting for and it’s what is starting to happen more and more frequently.

Some courts in Wisconsin have upheld this “Dark Store theory” and cut property tax assessments in some cases by as much as 50 percent – resulting in a tax shift to homeowners or a cut in local services. These rulings could result in a shift of millions of dollars in tax burden across Wisconsin unless the loop hole is closed by the legislature.  

The Solution: Follow the lead of the Indiana state legislature and pass legislation in Wisconsin closing off these tax strategies and stopping the tax shift to home owners. Pass legislation clarifying that leases are appropriately factored into the valuation of properties and prohibiting assessors from valuing thriving big box stores the same as abandoned buildings in a different market segment.

New Store


Empty Store


Should this new thriving store be valued for property tax purposes like the abandoned store?

  That’s what many big box chains are successfully arguing to reduce their property taxes.  The result is that other taxpayers like you have to pick up the slack.  Not fair, is it?  Tell your legislator to do something about it.  Support legislation banning the dark store tax strategy.

Dark Store Resources

Dark Store Issue Briefing

Dark Store Model Resolution calling on the Legislature to pass legislation Closing Tax Loopholes Causing More of Property Tax Burden to Shift from Commercial to Residential. (This downloads to your computer as a Word document.) 

Dark Store Resolutions

City of Brookfield
City of Delavan
City of Lake Geneva
Village of Wales

  1. 'Dark store' cases could cost millions in taxes

    February 13, 2017 HOWARD - An aggressive move by some major retail chains is putting homeowners in parts of Brown County and a number of other areas of Wisconsin at risk of a property tax jump in the coming years. Doug Schneider , USA TODAY NETWORK-Wisconsin
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    Fighting the “Dark Store Loophole”

    February 13, 2017 With a resolution recently adopted by the Milwaukee Common Council, the city joins municipalities across the state, and nation, in a fight against a legal loophole allowing large corporations to massively reduce their property taxes. By Graham Kilmer for Urban Milwaukee
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    Boxed In

    “Boxed In” is a 2016 documentary by Northern Michigan University Professor Dwight Brady, an Emmy Award winning producer, and 14 NMU students. Read on...
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    Retailers seek tax cuts with 'dark store' theory

    By Rick Romell January 14, 2017Milwaukee Journal Sentinel Milwaukee Journal Sentinel
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    Cities brood over 'dark store' tax lawsuits

    By Nate Beck December 26, 2016 Photo by Joe Sienkiewicz/USA TODAY NETWORK-Wisconsin USA Network-Wisconsin
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    How Big-Box Retailers Weaponize Old Stores

    Shannon Pettypiece December 8, 2016 Photo by Alamy BloombergBusinessweek
  10. Brookfield sends message to combat big retail loopholes

    By Geoff Bruce December 7, 2016 Photo by Geoff Bruce/New Media Group Brookfield Elm Grove Now
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    Dark store theory: The move big box retailers are making that could cost you big bucks

    By Brittany Shannon Fox 6 News December 4, 2016 Photo by Brittany Shannon Fox 6 News
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    West Bend asks governor, legislators to close tax loopholes

    By Ralph Chapoco November 2, 2016 Photo by John Ehlke/Daily News Daily News
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    Big-Box Stores Battle Local Governments Over Property Taxes

    BY Liz Farmer | SEPTEMBER 2016 Photo by Flickr/Brutal Social Governing
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    Should Lowe's 'dark store' strategy in Texas concern D-FW taxpayers?

    Maria Halkas September 12, 2016 Photo by Daniel Acker/Bloomberg News Dallas News
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