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Press Release


Contact:

Derek Melot
MAC
melot@micounties.org
(517) 375-0883

Jenn Fiedler
MTA
jenn@michigantownships.org
(517) 321-6467

Matt Bach
Director of Media Relations
Michigan Municipal League
(734) 669-6317; C: (810) 874-1073
mbach@mml.org; www.mml.org

FOR IMMEDIATE RELEASE: April 27, 2016

Hearing on 'Dark Stores' Measure Shows Need for Bill's Adoption to Restore Fairness, Transparency to Property Assessments

 

LANSING, MICH.  ― A “fair and equitable” property tax system would be the result of legislation presented to the House Tax Policy Committee, representatives of local government groups said today.

House Bill 5578, sponsored by Rep. Dave Maturen and co-sponsored by 27 of his House colleagues, would put into law valuation procedures that ensure the Michigan Tax Tribunal assesses commercial property at its “highest and best use,” thereby putting an end to the “Dark Stores” valuation loophole.

Starting in about 2013, “Big Box” retailers — Home Depot, Menards, Target, etc. — convinced the Michigan Tax Tribunal to deviate from traditional practice in valuing property and rely on the “sales approach.” Under this theory of valuation, an operating store’s value is built off comparable structures — even if said structures are vacant. Dark Stores appeals have distorted Michigan’s property tax system, with Big Box retailers in our state enjoying per square foot values of about $20, regardless of the size of the store or the type of products being sold — far less than smaller, local businesses or Big Box retailers in other states.

The “Dark Stores” problem is spreading beyond the Big Box stores, with fast food restaurants, auto parts stores and national, chain pharmacies now seeking to exploit the same loophole — at the expense of other local government taxpayers.  

Maturen’s bill would prevent the inappropriate use of deed restrictions and unreasonable comparable sales, while establishing a fair and equitable system to resolve disputes. HB 5578 also is consistent with state law defining a property’s “true cash value,” clearing a hurdle that had stopped previous legislative attempts to close the loophole.

Groups representing local governments dedicated to providing key public services praised Maturen’s measure.

“Maturen has used his experience as the only professional real estate appraiser in the Legislature and as a county commissioner to craft a direct and fair solution,” said Steve Currie, deputy director for the Michigan Association of Counties.

“This issue is about far more than the lost tax revenues for local government services — money that could be spent on fire protection, roads or economic development. This is about ensuring that all taxpayers pay their fair share and that all properties are being properly assessed,” added Judy Allen, director of government relations for the Michigan Townships Association.

“This is about shared responsibility for the services we all rely on,” explained Chris Hackbarth, director of state affairs. “With Dark Stores appeals, the loss of revenue has shifted the burden for providing local services from large corporations to Main Street businesses and homeowners. Rep. Maturen’s bill would block such future shifts.

The House Tax Policy Committee is expected to take additional testimony on HB 5578 prior to voting on the measure in May.

For more information:

Michigan Municipal League: www.mml.org
Michigan Townships Association: www.michigantownships.org
Michigan Association of Counties: www.micounties.org

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 mml.org.

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