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Press Release

Matt Bach, Director of Media Relations
Michigan Municipal League
(734) 669-6317; C (810) 874-1073;

Derek Melot, Michigan Association of Counties
(517) 372-5374,

Jenn Fiedler, Michigan Townships Association
(517) 321-6467,


Local Leaders across Michigan Urge Legislature to Close "Dark Stores" Tax Loophole

Loophole Allows Open "Big Box" Stores to Use Vacant Properties to Lower Their Values, Taxes

LANSING, Mich. — A coalition of nearly every county, city, township and public school association in Michigan today urged a state House committee to pass bipartisan legislation that would close a gaping tax loophole that large retailers across the state are quietly using to unfairly reduce their local property tax assessments.

Under the loophole, retailers such as Meijer, Lowe’s, Target, Kohl’s, Menards, IKEA and Home Depot across Michigan are pressing to have their operating “Big Box” stores compared to closed, vacant properties for the purposes of establishing their value. The loophole was created in a 2013 decision by bureaucrats and political appointees to the largely obscure Michigan Tax Tribunal. It has since become known as the “Dark Store” theory of determining tax assessments.

Business-friendly Indiana passed legislation closing a similar Dark Store loophole being used by big retailers to escape having to pay their fair share of local taxes. Wisconsin and Alabama lawmakers are also working on a fix in their states.

Republicans and Democrats in the Michigan Legislature have joined to close the Dark Stores loophole by introducing House Bill 4909 and Senate Bill 524. The House Tax Policy Committee took testimony on the issue today, learning that big retailers across Michigan already have pocketed more than $75 million in local taxes that cities, counties, townships and school districts were forced to refund them under the Dark Store loophole, according to a survey by the Michigan Association of County Treasurers.

“We are asking the Legislature to close a gaping tax loophole scheme being exploited by Big Box stores. This scheme is costing local communities and schools across Michigan millions of dollars and is creating an unfair tax advantage for Big Box stores over local retailers,” said Dan Gilmartin, executive director and CEO of the Michigan Municipal League. “Other states are addressing this issue, and we are grateful to those Republicans and Democrats in the Michigan Legislature willing to join together to solve the problem here.”

In addition to blowing holes in Michigan local government and local school district budgets, the Dark Stores assessments are creating tax advantages for big retailers over mom-and-pop businesses. For example, a study of property taxes in Oakland County shows Big Box stores are paying much less than smaller competitors. The Big Box retail rate there is half the average retail rate.

Most communities welcome having Big Box retailers such as Lowe’s and Home Depot nearby. But they don’t expect those stores to then ask to be taxed at artificially low rates. The bills being proposed would require that Big Box stores be valued and taxed in the same manner as any other Michigan storefront business and like any other taxpayer.

“By any measure of common sense and fairness, the property value of a store that is open for business should not be influenced by a store that is closed for business and vacant,” said Larry Merrill, executive director of the Michigan Townships Association. “Legislative action is necessary to re-establish fairness and common sense in the assessments. Failing to close the Dark Stores loophole means big retailers will continue to operate with unfair tax advantages over small businesses. All residential taxpayers will end up shouldering far more of the local tax burdens to pay for education for our children and local services such as police protection and firefighting.”

Timothy K. McGuire, executive director of the Michigan Association of Counties, said House Bill 4909 and Senate Bill 524 are the products of months of discussion among stakeholders, legal experts, legislators and members of the Executive Branch.

“The policy changes in the bills are not made lightly, nor were they crafted to single out or punish a business or retail sector,” McGuire said. “Rather, they are the means by which Michigan restores an equitable arrangement for establishing a true value to property ― the foundation of the property taxation system that is vital for local public services across our state.”

A joint coalition letter on this issue was submitted to the House Tax Policy Committee this morning. The coalition organizations signing the letter were Michigan Municipal League, Michigan Association of Counties, Michigan Townships Association, Michigan Association of Chiefs of Police, Michigan Public Transit Association, Michigan Association of School Administrators, Michigan Community College Association, Michigan Library Association, Michigan Association of School Boards, Michigan Association of Intermediate School Administrators, Michigan Assessors Association, and Middle Cities Education Association.

The coalition of Michigan school and local government organizations will continue to work with the Legislature to pass legislation to restore tax fairness.

About Michigan Municipal League:
Michigan Municipal League is dedicated to making Michigan’s communities better by thoughtfully innovating programs, energetically connecting ideas and people, actively serving members with resources and services, and passionately inspiring positive change for Michigan’s greatest centers of potential: its communities. The League advocates on behalf of its member communities in Lansing, Washington, D.C., and the courts; provides educational opportunities for elected and appointed municipal officials; and assists municipal leaders in administering services to their communities through League programs and services. Learn more at




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