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Press Release


Derek Melot
(517) 375-0883

Jenn Fiedler
(517) 321-6467

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


Court Ruling Validates Arguments to End 'Dark Stores' Property Tax Loophole, Local Governments Say

LANSING ― A Michigan Court of Appeals ruling against a Big Box retailer in the Upper Peninsula validates the case against the “Dark Stores” property valuation method, and the need for an immediate legislative fix to the problem, representatives of local government associations said today.

In Menard, Inc. v. City of Escanaba, a three-judge panel said the Michigan Tax Tribunal made an error of law in accepting a Dark Stores-style appeal by Menards and cutting the retailer’s value by more than half from the original assessment.

The decision is a significant victory for local governments that have argued against the Dark Stores technique’s artificial lowering of property values around the state. It also validates the reforms embodied in House Bill 5578, sponsored by Rep. Dave Maturen (R-Kalamazoo County), now before the Michigan House of Representatives.

“This is a huge step forward for fairness in tax law,” said MAC Deputy Director Steve Currie. “The court made note that using just the sales approach is insufficient, that deed restrictions have to be considered in how a property is valued and that there is an ‘anti-competitive’ nature to deed restrictions being used in an inappropriate fashion.”

“This ruling confirms what the Michigan Municipal League and other organizations have been saying. The ruling is also consistent with the intentions behind HB 5578. We hope the ruling affirms to legislators that the Dark Stores theory is flawed and a legislative fix like HB 5578 is necessary,” said John LaMacchia, assistant director of state affairs for the League.

“The decision validates local governments' long-standing concerns with past Michigan Tax Tribunal 'Dark Store' rulings," said Judy Allen, Michigan Townships Association director of government relations. "As the court confirmed in its ruling, deed-restricted properties unfairly drag down the true cash value when they’re used as comparables in the assessing process. In the end, small businesses and homeowners are the ones left to pick up the tax burden if the loophole isn’t closed.”

MAC, MML and MTA filed amicus briefs in support of the City of Escanaba’s position in the case. The matter now returns to the Tax Tribunal for reconsideration and the presentation of additional evidence.

HB 5578, which was advanced by the House Tax Policy Committee on May 18 on an 11-2, bipartisan vote, awaits action by the full House.

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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