Big stores are using a loophole, trying to reduce taxes
CINCINNATI (WKRC) - With schools and social service agencies scraping for every tax dollar they can get, some of the nation's biggest retail chains find a way to reduce the taxes they have to pay.
It's legal, but critics say it stinks. It's called the “dark box” theory.
Take, for example, a store that’s open, busy and anything but empty. The dark box tax theory says that, for tax purposes, the store should be treated as if it was vacant.
Walmart, Lowes, Meijer and other similar stores have lots of customers and lots of dollars, but many of those companies are trying to get lower taxes under a loophole that critics call “dark box.”
The chains are claiming their property tax appraisal for active, successful stores should be set as if the store was closed.
“Well, obviously what they're looking at is something that may happen in the future, but isn't happening now. Accordingly, it's not real and we're fighting it,” said Dusty Rhodes, the Hamilton County Auditor.
All properties are given a value by the county auditor, including private houses.
Think your value is too high? You can appeal to the board of revisions.
If your house gets a reduction, the impact on the county is small, but if big box values are reduced, that's less money for schools and social services.
For example, the Walmart in Fairfax was appraised at $12.9 million. The store filed for $9.2 million. The board of revisions made a small reduction… to $12.5 million.
Multiply this by hundreds of stores around the nation and you're talking millions of tax dollars. :
“There's a cottage industry growing up around attorneys who file for these stores and try to get these lower values for retail establishments,” said Rhodes.
An effort by the Colerain Lowe's to lower its appraisal was rejected by the board of revisions.
The Meijer store in Oakley got some reduction, but not all it wanted.
Now, the dark store theory is moving from big boxes to medium boxes. Two Walgreens in the county have requested lower appraisals.
Auditor Rhodes expects fast food stores are next;
“Smaller stores like that are going to file these one after the other and you'll have to be on your toes to fight them,” said Rhodes.
The auditor says members of his office will fight against appraisal reductions for big stores, when those cases to go the board of revisions.
That board may not have final say. Its decisions can be appealed to a state agency and then to the courts.
Local 12 has reached out to many of the aforementioned stores. Their responses will be posted into this article when they are available.
Meijer responded with the following statement:
Meijer works very hard to keep our prices low for our customers. One of the ways we do that is to make sure we pay a fair and equitable amount of property tax for our stores.