Hey Wisconsin I guess you should have factored this in when your governor gave away the state to Foxcomm.
5
Although this phenomenon cuts across middle America, it is interesting that the article focuses on Wisconsin, a state where voters have been duped into abandoning sound, progressive government, which in the past brought them good schools, health care, etc., in favor of trickle-down Republican tricksters like Scott Walker and Paul Ryan. Should we be surprised about a culture of tax dodging and foisting off responsibility is coming home to roost?
8
@backfull
The brick and mortar stores are worth less because of the the on lines sales. Regardless of the location or political leanings. The change has come when the big box retailers realized they could have a smaller store, a better web site and still have the same level of sales as long as I can get the item on line and receive it in 1-2 days. The next time they build a store it will be smaller, as a result.
1
Because, God knows, the Walton family doesn't have enough money, only $163,200,000,000.00. And we have to subsidize their workers, too, with Medicaid and food stamps.
11
Simple solution- give the business a choice:
1) Leave the real estate tax as is.
2) Put in place a new tax- 20% on gross sales in that store.
Choice one will be by far cheaper, and they will never raise prices by 20% to cover such a tax.
One final note, it is actions by big business like this that push people to the far left. It shows the truly nasty side of capitalism. The far right wants no restraints on business, but they are just too daft to realize how unrestrained capitalism pushes more and more people towards the radical left.
Well, the pendulum swings both ways. The current business real estate environment, bad as it is, is temporary. Once the old structures are occupied or demolished, look for tax valuations to return to normal - or even higher.
I suggest, when a big box store proposes to open in a small town and asks for the various zoning variances, tax incentives and whatever else they want, the governing authority set out just the kind of problems that they can anticipate.
Loss of tax revenue, driving local merchants out of business, low wages, etc. and let the people decide.
Oh yeah, they do that already. And the citizens want the big box stores anyway.
Kind of like voting for Trump.
4
Suddenly Amazon doesn't look so bad?
As briefly noted, using comps for commercial properties turns a hundred years of appraisal standards upside down. It's patently absurd, but of course, lawyers have no issue practicing absurdity at $500/hr.
And right next to this article in the NYT in my email is the story how CA power companies are already wiggling out of their responsibilities in regard the recent fires. Like the movement of power companies to have consumers fund new power plants by direct revenue increases, corporations (aren't they people?) are all take and no give.
We need electricity, food, and at least basic goods. All of these come from corporations, so every time you buy a pair of shoes, you are sticking a knife into your own heart.
The story says Texas is considering legislation to stop this practice. I hope they pass it, the biannual session just started. Our property taxes are among the highest in the nation already and more than offset the lack of income tax. And it's a nightmare of "Let's Make A Deal" 1960's TV show. My county alone, 50,000 appeals last year. You read that right.
Do these businesses write down the value of these properties on their balance sheets, which would tend to hurt their stock prices? I doubt it. Maybe this needs to be checked when companies make this argument to try and reduce their taxes.
2
My tax bill is not based on the value of unsold homes in my neighborhood. Aside from a homestead exemption based on my age, which is so small as to be meaningless, I pay taxes on the full appraised value of my home - and so should they. If a location goes out of business and the owners realize a loss on the sale of the building, they will have a write off. I'd rather pay a few cents more for the goods I buy (if they need to raise prices to pay their tax bill) than hundreds more in property tax or live with the consequences of minimized services.
And people in public office wonder why they are hated!
3
Only a brief mention of the standard practice of restrictive covenants in the lease under which most of the 'Big Box" structures are built. These render empty stores incredibly hard to repurpose, thus there use as immigrant detention centers.
The landscape is littered with empty boxes, maybe the rest of us should strike back and require a covenant on the lease that an empty store should be automatically transferred to municipal title (Free of restrictive covenants) if not reoccupied and generating property tax revenue in a reasonable time (Three years?).
It is estimated there are TWO empty retail structures in America for every homeless person.
4
How about blocking the exits? Pass a severance tax-one that equals a year's taxes or more- if they close a store. That should change the conversation.
2
Yes, yes, the trickle-down theory at work again. Tax breaks for the wealthy, for corporations, for businesses will lead to more jobs, more pie in the sky, more fantasy worlds: just trust us. Every small town these days looks like the last one you've driven through. They public space where local entrepreneurs might have had an ice cream shop or a shoe store or a stationary store or small grocery is paved over with parking lots and now housing characterless big warehouses where nobody knows your name. Well, folks, you get what you (don't) pay for: a devastated landscape, no money for improving schools, or roads, or meaningful jobs, or environmental protections.
3
That average increase in property taxes that the likes of Walmart would wreak on the average homeowner certainly would come out of the company’s sales!
2
Property should be appraised at the last sale price. Any lower appraisal made by the owner should be an offer to sell at that price.
2
I have been advocating a graduated business and income taxes being written into the Constitution in Massachusetts wher higher for the franchise, as in the case of businesses, for the franchiser to pay higher taxes than those franchisees. Also those like Amazon pay a business tax in Massachusetts.
Had there been a good planning board, it would have foreseen this. Instead, many towns and cities gave away their store (pardon the pun!) by letting these guys in.
To be clear, I am suggesting they should insulate themselves from the march of time since they might have ended up with Amazon anyway, but a balanced approach would prevent the locust-like big box invasion. With regard to takeovers, perhaps some of the smaller size shops wouldn't have ended up in the clutches of private equity and/or corporate rollup had they had a chance to fight with the big boxers
“The stores want to get all the benefits of being here without any of the costs.”
Several years back, I was looking across a street, near downtown Los Angeles at a building being rebuilt. Clearly there was no value in in old building, as it had been torn out. Clearly there was no value to the land under the building. If we carted out that rectangle of dirt a few hundred miles out, it would have no value.
Clearly no value was without the space of the property.
But there was value. Someone paid (quite a lot) for the property, and paid to have a new building put in that space.
With a farm or a mine, most value is within the property. In urban and suburban settings, most value is *outside* the property. Those stores are where they are because of the context around the property has great value to business.
That context has a cost.
If you want to operate a business within context of value, then you should pay a fair share of the costs.
2
The governments evidently have failed to inform the voters of the negotiations. The negotiators effectively serve the companies at homeowner expense without informing their electors at any point.
The officials surely confirmed the companies passed along their local tax savings to the local customers.
The reporter opened my eyes but left me squinting to see that rebate of the tax savings and an alert to the community in general of the valuation changes.
1
This may be true but I'm not sure:
"We can ... have practically anything delivered to our doors by a hugely energy consuming system."
If you buy, say, toilet paper on-line, it's shipped from a warehouse to your home and you don't drive your car to a local store to pick it up. Nor does a truck need to transport that toilet paper from a warehouse to the local store.
Which way is more energy-efficient? Not clear to me.
2
But consider that you’re unlikely to make that single trip in a private auto to only buy toilet paper. But an online retailer will ship that. And as Amazon and other retailers make their deliveries, notice that it’s unlikely that your neighbors would go shopping each and every day for a single or just a few items. Even then, they might do so very close by, not via a trip to wherever the area logistics center is located.
1
The Supreme Court's 2018 Wayfair decision will help bricks-and-mortar stores compete with online retailers. Wayfair allows states to charge sales taxes on sales by an out-of-state online retailer, even if the retailer has no other contacts with the state. Decades-old precedent, reversed by Wayfair, had prohibited this.
Incidentally, the US Supreme Court majority in Wayfair consisted of Ruth Bader Ginsburg and her "good friends" Clarence Thomas, Samuel Alito, Neil Gorsuch and Anthony Kennedy. Chief Justice Roberts jumped ship, dissenting in the 5-4 decision (joined in dissent by Justices Kagan, Breyer and Sotomayor).
Strange bedfellows indeed, but that's how Wayfair got decided.
3
What's the old saying -- "You can't kid a kidder"?
Many appraisal cases involve "sales" of real estate (a store location, for example) by a large parent company to an operating subsidiary, typically at a price well above market. (Market price would be much less because it would take account of nearby boarded-up properties – which induces desperate sellers to lower prices.)
The subsidiary deducts its full inflated "sale price" to calculate taxable income, which reduces its income taxes. Of course, each dollar of inflated purchase price paid by the subsidiary is another taxable dollar to the parent, but this works well if the subsidiary is located in a jurisdiction with higher tax rates than the parent. Guess what?
In other words, this often is a "tax-effective" way to transfer money from a subsidiary to a parent.
Unfortunately for such companies, a property-tax "problem" often arises because local jurisdictions calculate property taxes as if the artificially-inflated "sale price" were the property's actual value. This results in a higher property-tax bill for the subsidiary.
To reduce BOTH income taxes AND property taxes, the subsidiary then argues to local taxing authorities that the property is actually worth much less than its assessed value. After all, who would pay anything near the artificially-inflated "sale price" with boarded-up buildings nearby?
If all goes well, the assessment is reduced and the company thereby reduces BOTH income taxes AND property taxes.
1
In the old days, it was sport franchises the towns and states would rollover for. Now, it's big biz... same old news!
3
*More* tax breaks for these parasites? When they already pay such low wages that their employees have to get public assistance to survive? Shameless. Municipalities should band together to block businesses from shopping for tax breaks and give-backs; until they do that, municipalities will be forced to raise highly regressive sales taxes to cover basic public services. Better idea: Make these big-box stores pay half of the sales tax on what they sell, just like other businesses pay half of their employees' Social Security tax.
2
States and municipalities should bake into the permit to build these massive properties deconstruction or tear down costs. They would put the money into escrow for a certain amount of time, unless the corporations in qusstion agree to not go down type of path.
2
Of course the elephant in the room is that these companies make a very compelling argument. How do you appraise the real estate? Property taxes are inheritantly problematic on a host of levels (fairness, appraisal, etc.) Get rid of property taxes and raise raise the difference through income or other transaction taxes. You can’t argue a sales tax away.
Property taxes are the hardest taxes to evade; if you don’t pay, the government seizes your property. Noncompliance with sales and income taxes is much easier by comparison. In addition, sales and income taxes are highly cyclical whereas property taxes are less vulnerable to recessions.
4
Oh... I love corporations. Especially international ones that are their own nation states. Yes, we need MORE corporations...
4
The USA is dramatically overstored. And as supply chains continue to become more efficient and on-line buying gains percentage points of market share with every passing year, local and state governments need to become smarter about how we assess and tax both real estate property and personal property.
Yes we love free enterprise in this country. But to adjust to the issues that Ms Cohen has carefully detailed in her article, it is time to have all the taxing authorities strive for more equitable treatment of individual taxpayers, citizens, and businesses.
The goals are obvious: Good schools, Well maintained and effective infrastructure and transit systems, Adequate income for everyone, And (dare we say it) universal health care.
If this is labelled as a more socialist approach to government and taxation, so be it.
In the meantime, state and local leadership need to start taking the incremental steps towards equitable taxation.
New state legislatures are convening this month, lots of small towns have their annual town meetings in March. As individual voters and taxpayers, start asking your elected and appointed leaders to start developing new approaches to taxation to reflect the new realities.
Somewhere in the background Dylan is singing "The Times They Are A-Changing" and Shawn Colvin is singing "The streets of my town are not what they were...."
4
There are many self-destructive positive feedback effects from tying local public services to local tax bases. Those who need them the most are usually those least able to afford them.
Big box stores became popular because of inventory. They provide a much wider choice and we can walk out with just the item we want.
How many locally-owned stores can offer 15 brands of eye drops, 10 models of printers or computers, or 50 kinds of canned soups?
Twenty years ago I could choose between a locally-owned store or a big-box store. Now the big-box stores are even bigger, and I have very few choices for locally-owned.
Let’s see: in Duluth we have several locally-owned restaurants and coffee shops, a few hardware and clothing stores, and two book stores.
Buy local! The health of your city depends on it!
4
@Melvyn Magree: We can search the world by internet to have practically anything delivered to our doors by a hugely energy consuming system.
Next time your city council wants to pass an incentive program to attract a "job creator", sue them and vote them all out.
It's a scam.
Every. Single. Time.
10
So it turns out that many of our corporate "citizens" are actually welfare queens who want something for nothing. No surprises there. Twas ever thus.
10
I wonder if the reporter who wrote this article and others here could provide insight if and how quickly the opposite happens: a community increasing a big store retailer's real estate tax due to increases in valuation? For example, can taxes increase because the area becomes a "hot" retail zone?
2
They cannot do special appraisals. That would be targeting a taxpayer. TX does appraisals every year so it can capture YOY changes.
1
@Michael Blazin Thanks, that's helpful. So, there is the potential for a tax increase in TX if the yearly assessment finds an increase in value. I just wonder how often that actually happens to big store retailers.
1
First kill the downtowns then stiff the communities. A predator's ball in America.
8
"a far-fetched tax dodge that allows corporations to wriggle out of paying their fair share"?
Sounds about right to describe this
And certainly not the only time in recent years that highly-paid tax lawyers for these bad corporate "citizens" has come up with what amount to scams to boost profits at the expense of their communities where these stores operate.
Companies have always sought to lower their taxes, but what's astounding is now blatant these tax-dodges have become and how absurd the "logic" of them. Also, the amazing indifference that companies like Walmart repeatedly display to the neighborhoods where they operate.
Their greed seems to no no end and have utterly no shame.
8
@NYer: Divided we fall.
2
Elections have consequences. As the Federal Courts, are stacked with more right wing, corporate Judges, the situation will further deteriorate.
10
@Walter Ingram: All we get by regulation of corporations anymore are class-action lawsuits that inundate shareholders with notices that some lawyers somewhere have reached a settlement on behalf of a class that effectively encompasses themselves, who filed a lawsuit in some court in Louisiana or Alabama or thereabouts, putatively on behalf of the shareholders being notified, who discover they will get little or nothing, after filing lots of paperwork, if they read through the document.
2
@Steve Bolger I was speaking of the courts upholding corporate interests in these tax cases, as described.
However, I would describe your, "all we get," assertion as over the top. Tort, has many facets. With many of the Federal courts now upholding contract law at any price, and at the same time refusing to enforce anti-trust laws, many corporations are forcing consumers and employees to sign away such things as the right to file class action suits.
1
A lot of the townspeople in the places these stores reside suffer their hideous presence because of the local tax revenue they contribute. Without that incentive theses stores may find it more difficult to win entry.
3
People should understand that the flow of money is a zero-sum event. What is lost somewhere is gained somewhere else. Economic panics are almost always liquidity crises where some stratum of the economy becomes unable to meet its payment obligations, and those who lose the income therefrom are not able to meet their payment obligations, in a chain reaction.
Trump's government shutdown is one good way to start a liquidity crisis.
3
I used to work in this industry.
WalMart has an actual dedicated accounting real estate staff that rolls through all of their properties on a three year cycle. They appeal property values to county assessors so they can reduce values and therefore property taxes. Again and again. This is After the big goodie bag of tax incentives they received to locate there.
Think about it. Every three years they are submitting documents and squeezing local officials. The counties have to have staff to combat this. Do all counties have the experienced staff to counteract WalMart’s experienced staff?
Of course other retailers have copied these methods. They work! Counties are over a barrel. In return, to keep these low wage retail jobs, counties receive less property taxes for schools, roads, water and fire services.
On the federal level theses companies enjoy tax breaks as well. And so citizens subsidize low skill jobs, providing schooling, services and insurance companies don’t have to pay. It is a big transfer of wealth directly from local taxpayers right to the bottom line of companies - who never stop wanting more breaks.
Wake up people. Stop these huge corporate “welfare” transfers of wealth. They are robbing you blind.
18
@Anonymous: I marketed empty factories acquired during acquisitions after Reagan's tax revisions made asset-stripping lucrative. Every locality where such a facility existed was prepared to compromise its local tax base to get jobs back into them.
6
Even after having the corporate rate cut by Trump to 21% they don’t want to pay their fair share. Support raising taxes on corporations immediately.
8
If bought box stores get to use this technique, then other property owners including homeowners should be entitled to the same treatment.
If every property were valued as if it were empty and abandoned, then all property values would fall proportionately and tax burdens would stay more or less the same.
8
Corporations like Wally World are treated as revered individuals in our legal system, thanks mainly to our 16th President, Lincoln, whose work for the Illinois Central Railroad in the 1850s set that legal precedent in American practice. It already existed in the UK by then, of course. And these oversize brats revel in their special status, sticking it to their workers by paying plantation-scale wages, another throwback to the Lincoln administration whose military aim in our Civil War was to abolish slavery...don't expect any of these big players, all of whom massively underwrite the GOP and its entire slate of candidates, to do right by the little people. We are just here to pay the taxes, shop in their dismal stores and shut up about it all...
4
Fine, if the building is useless, cancel all services: Police, Fire, Sewer and Water. See how they cope with that.
12
Mail sprawl was supposed to be free tax money to communities. Its amazing what stupid deals politicians will do for immediate gratification, no matter the absolutely predictable long term harm.
4
If they want to be valued like vacant property, turn off the electricity and water, don't respond to 911 calls, don't plow the street in front of the building, etc.
10
A corporation's choice to construct a facility is a business risk. Whether the property gains or loses value, the company chose to make that investment and should be expected to live with the consequent rises and falls in property values and property taxes just as any homeowner in that location must.
3
Wealthy corporate interests are all about socializing risks and costs (shoving them off onto everyone else), and privatizing profits (keeping every last penny for themselves). Republican elected officials have the same philosophy, and have turned these "principles" into laws that protect large corporate interests while rolling back consumer and employee protections. If you value a strong middle class, you must vote for the Democrat. Every single time. If you want to continue to shovel a larger and larger portion of our national wealth up to the top .01%, vote Republican. This is not an exaggeration, just simple math.
9
The income approach makes sense if you’re assessing a landlord collecting rent as the property is itself generating revenue. When you start looking at an occupant’s business income it gets complicated. Some businesses are high gross low margin and others make fewer sales but with a high margin. Sometimes the real estate improvements are directly tied to the business such as a car wash. Other times the improvements are just a shell not specific to the business.
1
maybe attempt a local progressive sales tax whose percentage goes up by amount of stores sq. feet. local government's over dependence on property tax seems silly.
1
Income producing property (that is property used in a trade or business) is valued based in part on the income produced. If companies want to pay taxes based on the vacant value, then those companies cannot deduct the cost of the building (property taxes, depreciation, repair, utilities, etc.) from their income when calculating state and local income taxes. If our elected representatives would properly analyze the way companies game the system, they would institute rules like I propose. Same thing with sales taxes all companies with sales in the state should be required to pay sales tax, or pay a flat percentage of the gross sales in the state, plus the tax on the net income. Our representatives at the state and federal level are just too concerned with staying in power to think through these issues.
6
Does this apply to never-occupied $50 million dollar condos with no sprinklers that were paid for with freshly-washed cash? Just curious, of course.
9
The incapacity of US local and state governments to avoid undercutting each other's tax bases begs for Congressional intervention, which is fully authorized by the "commerce clause" in the Federal Constitution.
A Walmart typically makes more demands on local police forces than any other chain store.
5
Every comment here is correct, but leaves out a vital point. Most of us are tied to the stock market with our 401ks and IRAs. So we are a nation of powerless gamblers, tax-avoiders, and bargain shoppers. The system we have hitched our economic wagon to is so convoluted and broken, we run around in circles. Low wage shoppers with high debt looking for bargains on unnecessary things to keep the economy moving. And so it goes...
8
@Carr Kleeb: The stock market, for better or worse, is the principle vehicle for anyone to own a piece of the means of production.
4
Property taxes are just one funding mechanism. Maybe our state legislatures need to pass laws to enable local governments to set up targeted sales taxes for specific businesses that use this tactic.
3
Are these retailers contractually bound (with a substantial bond) to restore the land to its prior state from building? If not, than this is yet another externality that hasn’t been accounted for that the public ultimately finds itself on the hook for.
3
They close local businesses. They decimate thriving downtowns. They promise taxes I return for all the concessions at planning board and town meetings. And surprise, they want to take that too.
No different than Trump promising public access for his buildings and then taking it away.
It's a good thing that real estate developers and corporations got such good tax breaks in the last tax bill!
7
@Marie: Real estate developers and their lawyers effectively run most state governments in the US.
6
Thanks Steve. I've noted that as well. And noted that those who run are usually those with the greatest interest making sure the laws are in their favor.
4
I can't think of a better reason to increase the estate tax to 90% for families like the Waltons. It's not their money.
3
@Mac: Sam Walton conceived his empire of stores while observing the South Pacific cargo cults that popped up to keep the Navy parachuting goodies onto their islands with irrelevant religious rituals, as WW II moved on across the Pacific.
1
American Capitalism is beginning to really nauseate me!
6
@Lois Lettini: The floor under minimum standards of business conduct is nonexistent to Trump.
2
The shameless, ceaseless, insatiable greed of corporate America and its Republican stooges is killing the goose that laid the golden egg - forget appealing to their consciences as members of the family of man; just the economic self-interest business now prizes above all else should lead them to have some scrap of concern for the health of the communities that buy their stuff.
7
@Hippo
I own a commercial property and pay my property taxes on the business, so why can't the big box stores? If I can afford it as a small business, surely they can afford it as well.
3
Oh, sorry, local Walmart. We won't be able to send a fire crew out to extinquish your blaze. We weren't left with enough revenue for the fire dept to operate on Tuesdays. Same with the police, so you'll have to handle that active shooter situation on your own. Maybe hire some armed guards? Cheers.
8
RE:
Either way, homeowners and small businesses will have to pay more or live with smaller budgets for police, schools, garbage pickup and road repair.
Typical bleeding heart liberal NYT pro big government spending slant. Instead of cutting essential services cut the fat and wasteful spending. Diversity offices, bilingual education, $30K conferences tables such as Fairfax County has, gold plated salaries and pensions for government employees. They should make less given the job security government provides relative to private sector jobs.
There is plenty of fat waste to cut.
3
Exactly. You cannot blame companies like Walmart or Lowe’s for balking about paying these taxes when they are as high as they are due to public sector wages and benefits. While Walmart and Lowe’s closely monitor wages and strive to maximize efficiency, government at every level seeks inefficiency (see any DMV), engages in poor pricing practices (see the USPS) and fails to push back at inflated wages (see union political spending). Why would Walmart, paying their own people $11 voluntarily consent to paying highway crews that receive $50,000/yr for plowing snow or cops who make $100,000 their twentieth year?
RE: Either way, homeowners and small businesses will have to pay more or live with smaller budgets for police, schools, garbage pickup and road repair.
Nobody minds paying taxes for essential services. It's all the fat was waste that people object to supporting.
1
Let's put "dark story theory" to practice by boycotting these big whining retailers. Let THEM go dark. Traditional in person retail is dead anyway. No service, inconvenient. Mail order online retail is the present. Better service.
1
Thank god for the plethora of urgent care facilities popping up in New Jersey in shuttered Pathmarks and Genuardi buildings and the like ... kinda undercuts the cooked-up argument of limited market values to commercial buildings along commercial highway zones.
1
As in John Steinbeck's -The Grapes of Wrath. "The monster needs it's margin of profit". Today it's privatize the profits and socialize the loses. Predatory capitalism at its finest folks.
6
One of these should be chosen for a nationwide boycott and put out of business. That should send a message to the rapacious corporate cabal that governs our country.
Any suggestions?
2
The Big Box Class is ripping off the citizens of the US. Whether it’s through dark stores or prospecting it’s conning all of us. It’s illegal and should be stopped. One could argue that this was settled back in the 1920’s.
Yet there is a serious problem of trusting in lower-court rulings. If, with my home, I do not agree with the tax assessment of my property, and all avenues have been attempted, I can go to the courts to intervene. But in Michigan the District court is the 1st venue of choice. This low-level traffic court can hear cases involving property disputes. The next level is the Circuit courts which hardly ever over-rules the District courts.This means a low-level judge who has no knowledge on the law is schooled and easily mislead by the Big-Box attorneys on the proper enforcement of laws and almost always will succumb and decide in their favor.
In short, states and the federal government must make this an urgent problem to resolve and pass strict laws and enforcement. States should allow only regional boards to hear and rule on these tax disputes and the appeals should be in the US District Courts. 1st level District courts should be disqualified from these hard cases and the mid-levels courts should fast-track these cases to the US District Courts where judges are equally qualified and will hear the bankruptcy-side of the argument that any smart city or county should put forth in their argument of what an unfair, fraudulent, and harmful assessment would cause.
2
Fed Courts are busy enough. They do not need to hear local tax cases. States are SOVEREIGN entities. Learn it, love it, live it.
Folks, there are a lot of second rate lawyers from third rate law schools that need to pay down the $100,000 plus tuition bills they took on so that their parents could say "my son's a lawyer."
Shop on line and put these box stores out of business once and for all. In Wisconsin, (with slimy Scott Walker's help) Walgreens became the leader of the pack. Go to CVS.
4
The "elephant in the room" here, of course, is on-line retailers, who are taking business away from the big stores featured in this article.
Many on-line retailers have avoided not only store rent (or purchase prices), but sales taxes too. (Amazon, incidentally, is not one of those on-line retailers: Amazon now pays sales taxes to each state that charges them, as most states do; probably needless to say, Amazon favored the Wayfair decision mentioned below, since it will require Amazon's on-line competitors to pay those sales taxes too.)
The Supreme Court's 2018 Wayfair decision is likely to affect this greatly. It allows states to impose sales taxes on out-of-state online retailers. Online retailers will have to pay this additional cost in many states, which will decrease their competitiveness with in-state stores. (Customers, of course, pay the sales taxes, but out-of-state on-line retailers have often been able to charge less because their customers need not pay sales tax.)
Incidentally, Ruth Bader Ginsburg joined her "good friends" Neil Gorsuch, Samuel Alito, Clarence Thomas and Anthony Kennedy to vote with the majority in Wayfair, overturning decades-old rulings. Chief Justice Roberts dissented -- i.e. he voted not to allow states to tax out-of-state retailers who don't have stores or other minimal contacts with the state. He was joined in his dissent by Justices Kagan, Breyer and Sotomayor.
2
Frankly, I've little sympathy for the towns that allowed these stores to come in the first place.
Often, they gave tax incentives which resulted in jobs but low paying ones; ruined the community by furthering suburban blight; and contributed to the decline traditional downtown areas.
As taxes increase, people might continue to migrate back to urban areas, which could have political implications to the Republican party.
2
Perhaps the cities could provide meaningful examples of why they deserve to be paid on the value of a thriving retail site. For starters they could tax every curb cut from the street to the parking lot and change the traffic direction on the street. If water and sewer are needed then hefty taxes could be levied on those. I'm just getting started here but you can see where we're going with this.
3
@PSP You're just saying that cities should increase taxes on retail businesses in their area. Great idea, though I think cities have already thought of that. The problem with that idea is that retail businesses eventually will be unwilling to buy or rent stores in the city. They will go elsewhere, or perhaps not open a new store at all.
In short, it's not all that easy a problem to solve. Hidden taxes may work for a while, but not in the long run.
1
An assessed value is supposed to reflect “fair market value” (FMV). And the usual standard for FMV is “the amount that a willing buyer, not under compulsion to purchase, would pay in an arms-length transaction.” Assessed value also usually accounts for the “highest and best use” of a property.
The overall goal is that the assessed value should simply reflect market value. That’s the reason why a 20’ x 50’ building on Staten Island assesses at a lower value than a 20’ x 50’ building in mid-town Manhattan.
A property should rarely assess at a lower figure than it recently sold for on the open market. Any valuation “theory” that yields that result is likely a sham.
As these “dark box” cases reach the appellate courts in states across the country, one hopes those high courts will use some common sense and severely restrict this results-oriented “theory” of valuation.
2
well then, why not throw the value of the Brand in when calculating the value? surely a building with a yellow Best Buy sign on it is more vaulable than the one with the red Circuit City sign, yes?
1
seems like a problem that can be corrected and be fair to all property owners. all property value for tax purposes is declared once a year and that status should prevail. thus, if a property is doing well or has been recently sold that should be the main factor in deciding its tax purpose value. on the other hand, if the property is empty and doesn't have any prospects for further use, that should be considered in setting its value. seems simple to this ex city assessor.
Property tax assessment for commercial properties is extremely complex and differs from state to state, county to county and city to city. The ongoing fight is over who pays the property tax bills-homeowners or businesses. If business pays more, they can pass on the taxes by raising prices, to a degree that the market will allow which means that people ultimately pay the pass through tax. Corporations may write the check, but only people pay taxes.
3
The solution would be to pass a local sales tax. This taxes the business on the value it provides to its owners, not some arguable real estate value.
2
@Ken L
Businesses don't play the sales tax. Consumers do.
3
One crucial part of the story was omitted. Big box stores sell low due to the strict deed restricts they put on the property when selling. Lowes doesn't want to sell their store to the competition (Home Depot). They will put on a deed restriction stating the property cannot be used for a home improvement store. That significantly impacts their value. They reduce their own value because they remove the most likely buyers. In other words.... I'm going to fight the assessment on my house. My argument..."I'm going to put a deed restriction on my house in the unknown future that the next buyer cannot use it as a single family dwelling. Therefore, the likely value will be a fraction of what I'm using it for now. Please overlook that I'm imposing this myself and I'm basing this on the something that hasn't happened yet."
22
This is another reason why we all need to wean ourselves from shopping at big box stores. First they sold their cheaply made Chinese wares at prices so low that they effectively shuttering mom and pop, independently owned stores all across America, thereby also causing the abandonment of many lovely little downtowns in small cities and towns all across the US. Then they underpaid their workers, and often gave employees just enough hours to only qualify as part time, thus also denying their labor force benefits like health insurance. Now we learn how they also want to avoid paying taxes. No surprise. The chickens are coming home to roost America. There is a price tag for all the cheap stuff we want to buy. We have allowed our endless desire for consumption to ruin small towns and communities, and we have allowed the unfettered greed of these corporations to continue to decimate our revenue base and we all suffer the consequences. Corporations are NOT the people, and the sooner we focus on what is best for ALL of us, rather than what is best for the corporate bottom line, the sooner we can concentrate on solving the disparities and cruelties of uncontrolled capitalism.
28
Ah, more private gain and public pain. These antics are in addition to all the other tax breaks these businesses get,or have gotten to open in these locales initially. When will these people realize that most business is not their friend? When will the world wake up to the fact business is not some benevolent citizen? Business has been extorting towns, cities,states and the federal government for decades. If towns don't play ball, they will take their business over to the next town. Pro sports teams do it, big box stores do it; look at the Amazon farce. States and cities were willing to give away billions to lure it. The American people are suckers, willing to stab each other in the back for the "promise" of prosperity and security. When will it stop?
127
If Lowe’s or CVS or Walmart works hard to limit its labor costs, why would they voluntarily contribute to public employee costs which are never limited or realistic?
4
@Tim Lynch
The concept of "MALLS" marked the beginning of the unbridled materialism in this country...........people are so easily manipulated by advertising..........they want more "things" to make them even more unhappy.
8
@Tim Lynch
Our country is in decay and about to expire. It will end the way most empires end. So it won't stop. The rapacious corporations are a parasitic entity consuming the nation as people sit passively looking at their devices.
25
Many of these big box stores got huge tax incentives and breaks to begin with from the towns/states they move to or build in.
Now they want to shaft them, as have so many other businesses who've already shuttered and ran earlier. Leaving these municipalities to carry the ball with empty, rotting retail centers and malls.
They came in and killed the small businesses and now that they're the only game in town they continue to call the shots.
When if ever they need fire trucks to put out their fires or police protection, charge them more. Send them a bill.
120
@LM
Dear LM:
You make some very good points. In fact, some previous articles have focused on the increased police time and expense when a Walmart moves into a community. Their 24 hour super centers attract a lot of illegal activity. Some communities have found that their police departments need to add staff for Walmart coverage.
11
This is where a 70% tax after the first $10 million dollars could help the middle class. The CEOs of these companies need to pay back to the American people. That tax money could go into programs to repair the countries infrastructure and provide good paying jobs. The wealthy continue to manipulate the needs of the middle class and poor to make themselves rich.
6
Another signal that the "consumer economy" is in free fall? Did anyone else notice that the 3-4 biggest companies in terms of earnings, don't make anything, just services and often poorly provided to rural and the 49%? The towns/states should cut their losses, stop providing services to these giant black holes, and stop giving them 10-15 year zero property tax enticements up front. (see new Amazon deal in NYC)
Maybe encourage lots of local tiny/small start ups with prorated reduced property taxes the longer they stay. Just a suggestion? Start thinking out side of the box instead of spending millions on court costs. WalMart etc. can afford to bleed towns/states dry and suffer not a bit to the bottom line...
48
@SCB
Wisconsin spent $4b + on luring FoxConn.
Imagine what kind of ground-up state revenue that could have generated were that money used to: Forgive the debt of the university system's graduates who had stayed in state; Fund micro-grants to local small businesses for these little towns (think repair shops, hair salons, farm-to-table restaurants); Provide rural broadband to all residents.
Instead, they snatched the land from family farmers, gave it to China, who will pollute Lake Michigan and the surrounding area.
19
If I knew that I will have to pay more taxes because a shop tricks to pay less taxes, why should I buy stuff in this store? If everybody would do the same, the value of the store would automatically decrease or the store might go out of business. Surviving shops might rethink their approach and pay more taxes again. It's all in the hands of the customers.
48
@PeterB
Though our economy supposedly "looks good" now, real wages and minimum wages have not at all kept up w/inflation. Many many people do not have a choice but to shop @ the more affordable box stores. What is puzzling to me is the ownership of the building. If it is the corporation, aren't they, like a homeowner, responsible to replace themselves or continue to pay taxes until they do? If w/in a certain period of time they are not able to find a buyer, they should be responsible to return the site to its original state eg raze the building, rather than add to the eyesore and potential danger of abandoned buildings.
8
@PeterB
You shop at the big box because there is NO alternative. Walmart is the dominant presence here (duh) (Ten miles from Corporate HQ). There is no alternative (OK, one modest, local grocery chain). What keeps this region afloat is the decent jobs in corporate HQ and Vendorville.
6
I’m an appraiser and I do believe it’s worth what it would sell for but you can’t appraise an income producing property w/o considering the income it produces. It happens everyday in Tax Assessment Appeals, the market says a residential property is worth $100k but the assessment is 50% higher, yet the appeals board considers the income that the property produces as a reason to deny the appeal. The big corporations have the resources to appeal but the little guy gets the shaft.
49
The best comparison between a dark store an a real live one like Lowe's or Walgreens is this: how much demand does the latter put on local services compared with the former - utilities, infrastructure, traffic, police, fire and so on. And education, of course. Does a dark store need educated people to run it?
It's pretty clear that an active store requires much more. The dark store idea is a fraud, and a good lawyer should be able to run rings around it. Of course, the big box stores pay their lawyers many times what an overworked local govt. attorney earns.
9
Exactly. Communities don’t want these empty, ugly behemoths any more than the companies who’ve shuttered and ran, do — yet it’s the communities who are left holding the bag and needing to deal with them. They present tenement risks and can become major fire hazards, thus endangering police officers and fire fighters who have to handle any issues that arise. Meanwhile, the burden on public services placed by existing businesses are all those listed above and, when corporations appeal, they have the money in the coffers to outlast and eventually pummel city attorneys in court. What a stacked system.
2
@mancuroc Maybe the communities should put the appeal on the docket, to be heard, let's see, sometime in the next 15 years, and until it is heard, the original valuation stands.
2
Everybody seeks to legally cut their tax bill to a minimum, even the New York Times. There is nothing wrong with that.
And if municipalities have been over-taxing their taxpayers I would encourage the taxpayers to institute actions to get the overpayments refunded, with interest.
Municipalities are there to serve their constituents, not rob them.
4
Corporations mentioned in this article have paid OUR elected officials and corrupted the Supreme Court to their way of thinking and doing business in America. We all want to “save money”, but at whose expense? The American shoppers must abandon corporate retail whom are not interested in paying their fair share.
7
@Cecily Ryan. Off topic-the electeds that make the property tax rules are at the state, county and city levels not the DC swampers.
These big box stores need to convince the public that they CARE about
" neighborhood America" and show that they VALUE the locals schools and communities enough to pay their taxes!
6
The fairest way to tax commercial real estate is not the comparable-sale or new-building standard applied to owner-occupied housing. It is the "net-income per square foot" method (with some minimum for unoccupied structures or unbuilt land). Otherwise, you reward large retailers for putting their competitors out of business.
17
We can live in a governed society or an ungoverned society. The price of a civil society is a government to enact and enforce laws that create a fair marketplace and an environment of safety to live in. This desirable standard of living does not come free, and must be paid through taxation. Of course people and businesses want to lower their taxes. So the question becomes what is each one's fair share? It's a big question. It comes down to what does effective government cost, and how is that cost apportioned? There will always be creative accountants hired by large corporations to frame the argument to their advantage. Governments need to be firm in setting a standard that does not allow companies with the most expensive lawyers and accountants to reap the benefits of desirable locations without paying their fair share. Which then helps ensure stable and prosperous communities on which businesses depend. Wouldn't it be nice if corporations could just be good citizens without raising the cost of government by litigating everything?
13
And our government must not cater to the wealthy corporations and people who contribute big bucks to their campaigns.
6
Perfect example of rogue capitalism. It’s a zero sum game. What large corporations take , communities lose. The Walmarts and Lowes of the world don’t belong to any community, only to their shareholders.
17
BOYCOTT !
The people have the power to prevent this greedy move...simply BOYCOTT all Corporations that are involved.
10
@Pierre La Pue
Yes, I boycott Amazon as well as big box stores, since Amazon is the new Walmart in terms of putting local businesses out of business and lowering the overall economy of a town or region.
3
Exactly. I shop at local hardware stores and independently owned shops. So what if something costs a dollar more. Our communities only gain thru these shops, whereas we only lose and lose again when one considers a Wal-Mart or a Lowe's. No thanks.
2
Welcome to the logical progression of Capitalism.
Property always overrides people. And eventually it owns every part of us, until slavery becomes normal, legal and universal.
5
So can I appeal my $10K/yr property tax based on empty houses in Podunk?
1
If they are in your neighborhood and are similar to your home, yes. Many people in Dallas appeal every year. The appeal process in Dallas is so easy, inexpensive and relatively successful that the City Council does not really get to budget planning until after appeals finish. Appeals are a just another part of democracy.
2
How dare we criticize the wonderful "job creators".
hahahaha.
Next time one of these behemoth chain stores tells you about the jobs they "create", remember they "create" NOTHING. They simply replace jobs that already exist in other stores that eventually close with generally lower paying jobs.
That's the unspoken tragedy of all this.
And then they want more.
They are parasites.
15
@Will.
Wal-Mart creates low pay jobs with no benefits for its staff. The Wal-Mart in Chico had a donation box next to checkout to pay for health insurance for its employees. Their employees used the services provided by the community; they could do this by keeping hours below that required by law for benefits. Perhaps their managers fared better. I now live in Sebastopol; if I want to shop for bargains, I can go to Santa Rosa. I never shopped at Wal-Mart. Target was available, and they provided benefits for their employees.
1
@Will. Stop corporations from donating great amounts of money to politicians often to both parties and candidates. Trump has bragged that he donates to both candidates which allows him aces to who ever gets elected.
1
Cut of their municipal services. All of them.
Shoplifters? - Don't call the police. Just deal with it (and better do it legally!).
The building is on fire? - Better fetch a hose from the garden department and get busy!
19
This is nothing new. Politicians attract businesses, giving the income and property tax benefits to the predatory businesses like AMAZON, then the locals pick up the tabs! Later these businesses relocate as their commitment expires or they declare bankruptcy or are acquired. Lawyers and pols win. WE LOSE always. Local politicians PIMP their constituents out routinely.
4
An obvious solution for residents of these cities would be to boycott the stores so they truly become dark stores.
3
so, increasing internet sales result in small stores closing...the increase in big box stores result in small stores closing...big box stores want to pay less local taxes...where are the funds coming from for the towns and cities to flourish, or even survive?
1
@Jim
Internet sales can be taxed at the sales tax rate set at point of origin. Local towns also have property taxes paid by homeowners and local businesses. Cheap Chinese goods rarely offer quality.
I’ve got an idea! Why don’t we all go on indefinite paid ‘leave’ from our jobs and make the ‘rich’ pay for it? That sounds very ‘fair’ and ‘progressive’. All the ice cream you can eat, plus sunshine every day, too.
This is nothing more than bullying blackmail by rich greedy monopolies that control the republican party. The appropriate answer is No then let them go bankrupt, move or pay the tax. Residents will have other options for getting the necessities of life be it internet or a return of the corner grocery.
Let the free market work and let the free loaders who own these corporations go bankrupt.
4
Somewhere out there- is a city council just frustrated enough to DO this:
"Walmart etc. have announced they can set the value of their property better than we can. We believe them, since they're good honest citizens, right?
"So the City of Erewhonica will hereafter allow ALL citizens to set the tax value of their own properties. Go to it!"
Two weeks later, the front page of the Erewhonica Examiner will carry the headline: "Total County Tax Value Drops From $951,662,047 to $523.13. Police Dept., Sanitation, Roads, License Bureau, and Schools All Closed Permanently."
I think that might get Walmart, etc.'s attention.
But some brave city may have to DO it, first.
3
Trump’s America. If the POTUS didn’t pay his taxes why should anyone else?
6
This story and this issue are visible because citizens are engaged and raising their voices.
Our representatives need to hear directly from us. It is up to us to hold them accountable. Many are responsive. Some are not. Our local PerSISTERS group have written to members of the Wisconsin Senate and Assembly repeatedly.
Robin Vos and Dale Kooyenga : we eagerly await a response to our letters and phone calls.
6
Big retailers who pay their employees so poorly they have to rely on food stamps and Medicaid now want the taxpayers to bail them out again. Where does it end?
19
I have long contended that vacant storefronts, vacant warehouses and industrial buildings, and even vacant land in many instances, should be taxed at a premium rate. Make owners pay dearly for keeping properties unproductive.
Vacant stores and other commercial buildings detract from a community's well-being. Property owners sit on these cheaply taxed properties while demanding exhorbitant rents that virtually assure the buildings will remain vacant.
If taxing authorities created strong disincentives for unoccupied Main Street stores, they would be creating incentives for landlords to reduce lease rates to levels that new Mom & Pop enterprises could afford, leading to revival of the community's commercial area.
8
@Brian H. Bragg You make an interesting point. If people receiving unemployment benefits have to demonstrate that they're actively looking for a job or lose their benefits, then commercial property owners who can't demonstrate that they are aggressively looking for tenants should be taxed at a maximum rate.
3
Then they strip the buildings of anything of value and donate it to a church, claiming a nice tax deduction based on your official max value, well above what a market price would deliver. The firms will love you. How is that going to help the town in your scenario?
1
A fundamental difference exists between the government sending you a check and getting to keep your own money. For all the ranting and raving about false equivalency by NYT commenters, that is truly a false equivalency. Also, the question is not the rate (normally fixed by state law), but the value that the rate multiplies.
Every American person and entity has the right to appeal property tax appraisal. These firms are simply exercising that right. Everything in article shows appropriate levels of open judicial review. No bribes or backroom deals. How do you get more American that that situation?
2
It seems like it's time for local governments to get more aggressive (and to work together). Let the malls by their own d*mn snow plows.
3
@Philip S. Wenz
I'm pretty sure they already do pay private contractors for snow removal.
I'd like to do this with my home. I want a property tax rate based on an empty lot. If a corporation is a person, and I am a person, we should be treated the same.
11
@Jane Mill
Scalia's SC Citizens United Decision defined corporations as "individuals"; he used an old Superior Court Decision with a transcription error, known and never corrected. The word spoken was corporation, transcribed as individual. The only way to get rid of this specious definition is to get Congress to repeal the Decision, other than a national petition to do the same. Corporations are not individuals who can form PACS. Corporations were formed to protect a Board of Directors from shareholders. These fake "individuals" have taken over the government with unlimited campaign donations to candidates who remain beholden to them. As long as GE is defined as an individual nothing will change.
1
An empty lot is not comparable to your home (or then maybe it is).
If these businesses think that their properties are worth so little, the towns should condemn them through the eminent domain process and then offer to rent them back to the stores. I'll bet the the rent will far exceed the taxes!
10
The state has to prove it has a bona fide use for the property. Getting into the real estate business is not a bona fide reason.
1
It's so ironic that municipalities bend over backwards to entice these businesses to locate there, with all kinds of tax breaks, all based on the premise that they will bring jobs and ongoing tax revenues. As more and more of these brick-and-mortar places fail in an oversaturated market, the towns are left holding the bag, with ruined environments and decaying eyesores of buildings, a constant reminder of how they've been conned. The corporations write off their losses and look for another location in which to repeat the process. Municipalities need to wake up and make some demands before even *allowing* these developments, let alone *incentivizing* them.
12
When a Kmart closes and leaves a vacant building, it raises the value and profitability of the remaining competition. If they want to go this root than why not tax commercial property at its greatest potential value..maybe it isn't a store, like the one that closed, maybe it is a condominium or apartment complex that so many communities desire.
4
In reading the article it seems that the new stores buy the land for their store vs renting commercial store space, which I believe was a McDonald's restaurant theme. Sadly, some of the big box stores come into an area and take business away from the stores that are now closed. No matter how you look at it, it's the little people that end up paying, along with the sales tax for the merchandise we buy from the big box stores, too.
5
Government loses billions in tax dollars because there's no instant system to collect sales tax from online sellers from the tiniest eBay seller to Amazon.
It's paperwork or tax filings that needlessly complicated things. We're talking about computers here, have a program that automatically diverts the money to the treasury- I don't understand why this can't happen in the 21st century.
4
Many vendors provide software for electronic capture and deposit with state of sales taxes. I am fairly sure you have to be a tiny business not use the process.
Note one important fact in this article. Many of these corporations are owned by international companies. They don't care about local communities because they don't live there. They have secret bank accounts in Switzerland, the Bahamas, Cyprus, Panama, Liechtenstein, etc. and their executives have second and third homes in other countries. They will happily give up their American citizenship if it benefits them.
14
@Julie Carter
They need to pay taxes to the venues where they use public services: roads, airports, markets et al. If they want to bring profits home, they need to be taxed at a corporate rate of 33%, not an individual rate of 28%.
1
Why not tax the stores on the basis of how important they at to the company that owns them.
2
How would you judge importance? These issues are not new. Property tax case law goes back to the founding of each state. These firms are simply taking advantage of existing precedents because of declining retail business.
While over taxing and micro-managing private businesses by society are counter productive and deprive everyone of liberty and prosperity, the inequities resulting from insufficient taxes and allowing a few to prey on the many prevents society from providing a modern way of life to all. This faux libertarian opposition to effective government makes liberal democracy practically impossible because it leads to oligarchy and popular poverty and injustice for all but the most powerful and unscrupulous. It’s time to wake up and to realize that we live in highly organized society to enable all of us to live under liberty and law, and that arrangement has costs which must be met. Property taxes are part of the cost of enjoying life in a prosperous and orderly society.
17
Commercial property reappraisal based on dark store theory is another brick in the wall separating corporations from their local civic responsibilities. Who's to say the survivors aren't better situated for success? Why aren't brick and mortar establishments doing more to appeal to local shoppers? But as a counterpoint, how often to shoppers merely browse the merchandise before buying online? Stores should probably log foot traffic and open their books as part of the reappraisal process.
There's no denying online shopping dramatically rearranged the commercial landscape. And certain corporations are doing fabulously well in an evolving market. The real question is how much they should contribute to the common good in local communities where they operate.
Perhaps a county by county gross receipts tax can be levied for online sales to supplement local property taxes. The latter could be adjusted as needed to retain the stores essential for local economies. Selective non-operational stores and warehouses could be rezoned, torn down, or converted to other uses to tighten the commercial real estate market.
Due to changes in federal taxation, successful corporations are newly flush with cash, but that loot is largely unavailable to most strapped local communities. It's possible we made a big mistake by cutting corporate taxes and personal taxes for high earners. Those lost revenues could have gone to spending on infrastructure, healthcare, community colleges, and trade schools.
8
@Michael Tyndall
The tax heist you reference was passed in the middle of the night with no Democrats present. Now we have a Democratic Congress; they need to address this. We'll see what Pelosi does with this gift to corporations and the top 1%..
2
The big box comes to town. The local government possibly provides incentives to attract the business. The big box says it wants to incorporate itself into the community. The locals patronize their new "friend". All is well, until a few smaller businesses fail because they can't compete with the volume and prices the big box can produce. Then the big box moves to lower its property taxes to enhance their bottom line. Big Box says to the locals, "We would like to help you with your tax base but your population is shrinking and our shareholders come first."
10
The municipalities could reserve the right to purchase the property for, say, assessed value plus 20%. Retailers with drastically low assessments would risk losing the property in a fire sale to the municipality.
11
@Pessimist
I like that! How about municipal right to purchase the property for assessed value plus 20% minus the cost to tear down the mall or whatever and restore the land to buidable condition or public park use?
2
@Pessimist I always liked the idea of letting land owners set their property value with the caveat that government could buy the best deals.
3
What exactly would these communities do with this property bonanza? These areas are not Manhattan. Land in them is not an automatic moneymaker. In any case, eminent domain case law strictly defines what eminent domain can do in line with takings clause in US Constitution.
"Things are different now." Ok. Then-
Everyone will agree that all of us should pay "our fair share." Whether we all mean that or not- we'll say we do. Because- we should. Must, actually.
The property tax is designed to have the wealthy pay a tad more; since they are actually getting more service from the town- more electricity; more water, more road maintenance.
So - in the present business climate change- that is not working anymore. Therefore- let the towns announce "Ok- we get it. Henceforth- you will pay NO property tax. Instead- we will bill you just for the services delivered- according to our calculations. Take your pick."
13
If only someone could explain to me how the concept of raising revenue based on the opinion of value was ever a good idea. You tax a sale - there's no dispute. You tax an income - there's dispute, but a degree of logic can be implemented. This method seems doomed from the start.
3
Why is this so difficult to beat back? A sensible definition of "comparable" should be based on amount of commercial traffic within a geographic zone. Compare to stores in other neighboring malls that have similar sales per sq. ft. Include green field sites. I can't base my real estate value on sales of empty buildings in Detroit, why should a big box store be able to do that?
16
This is what happens when monopolies start flexing their new found powers. If you or I were to challenge our property tax bill based on "once empty buildings in other neighborhoods" we'd be laughed out of court. We not only provide companies tax breaks to move in our cities, we finance roads and traffic lights for these new companies, these companies pay less in corporate tax rates, and now want to pay less for real-estate. At some point, cities and the public simply need to say 'no'. This economic model has and will continue to ruin America.
30
These corporations just recieved a tax break from 35% to 21% but still want to RIP off local tax dollars.
You know and I know they will not stop until they pay zero taxes then they will want a return to stay.
22
You can easily find out how much in taxes these companies really paid at the 35% statutory rate, most paid between 15-20% few paid the full 35%. That’s why the 35%tax rate is a myth, in today’s world, the rich an corporations are pushing the Republican Party whether at the state, city, or federal level, to lower their tax rates to zero, which is what any loophole or in this case comparing property values to closed stores does.
Why should small business and homeowners shoulder the tax burden. If small business really is the backbone of the economy (as many politicians have said, even Obama) then they should get the largest tax breaks, but alas, they like voters have no say, we are getting less and less of a political voice because our voices are being drowned out buy the rich and corporations.
Our schools, infrastructure, crumble and fall further into disrepair making it more and more expensive to repair, or even maintain. Yet people still vote against their best interests, by allowing politicians to be forced by corporations into court because of a property tax rate that “they deem unfair” seems a little backwards. Maybe politicians need to be reminded by their electorate, the needs of the many outweigh the needs of the few.
9
These small towns need to protect themselves when zoning and approving large new commercial construction projects.
The towns should allow for new commercial construction with a stipulation that the real estate tax assessment be set on an escalating scale for 20 years. The companies would be prohibited during this 20 year period from appealing their real estate tax assessment.
10
It used to be that you could not organize a corporation without a legislative body voting in it. Then we allowed the creation of corporations simply by applying for a license.
The arguments at the time, about 150-175 years ago, reflected a worry about about the effect on the common good. The concern was the formation of enormous pools of capital allowed by limited liability would create problems. The solution was to impose an obligation on these entities to provide a public good. That’s ll gone now.
The mantra now is shareholder wealth to the exclusion of all other considerations. Now we have huge sociopaths.
27
Unmentioned here is the core issue in many of these localities; public employees make 2 1/2 times as much as in the private sector for equivalent jobs. School and public employee unions have overwhelming political power locally...and always support Democrats along with ever higher taxes.
5
@Lane The compensation gap between public and private sector jobs is more complicated than that, but in no case equals 2 and 1/2 times more for public sector than private. Depending on the kind of work performed, it ranges from significantly less (for professional level jobs like attorneys) to somewhat more (for less skilled workers). And I would challenge your assertion that public sector employees "always" support Democrats. Have you canvassed your local police department lately? It sounds like you just have an issue with taxes going to municipal services in general.
5
I could challenge the tax value of my house based on empty houses in rural areas of my state. I would save about 3/4. If we all did this, tax evaluations of stores and property would fall and the local authorities could solve the problem by raising the rates to equalize income. Afterthought: what about the car tax based on one in the junkyard?
30
Big Box stores frequently receive tax increment financing as an inducement from municipalities prior to building. What does David Cay Johnston think about this? His work covering the free-lunch corporations receive examined this extensively.
11
The big box stores are abandonning neighborhoods in decline and relocating to those in high demand. As usual, they want all the zoning variences and exemptions from design guidelines they can get (and usually do despite commnity input). If the community is growing amd homes are retaining and increasing in sales price, any argument forr a reduction in property taxes is ridiculous.
19
Once again, another scheme for big businesses to become even larger takers in our society. So tired of the fact that they get heaps of representation WITHOUT taxation. We, the little people, always end up ponying up for everything. Whereas the big people pay nada, zilch, yet retain the benefits or our society. The roads to their stores did not pave themselves, nor did their workers educate themselves. Police/fire/emt also costs money, as does sewers/water. I say kick 'em to the curb.
44
Communities are healthy enough for these leeches to put in a store to get profits, but once they are thriving on local sales, their properties are no longer worth as much at those profitable locations. Who are the attorneys or hearing officers who swallow this logic? Truly, want to know why demagogues win office, they point out the dishonesty of basic first level decision making and falsely promise to fix it until they see how much they can make in "campaign contributions."
22
And to add insult to injury
Why I you think those dark stores were shuttered
It’s because of the oversized competitive advantage of the large retaikers.. forcing out small competition.
10
“Several states, like Alabama, Texas and Indiana, have considered legislation that would curb the tactic.”
Ironically, all very red states!
These are our “corporate citizens”, “job creators”, “pillars of the community!”
No, thank you!
11
Walmart, Lowe's, Home Depot, et.al., build these big, ugly structures. They need to pay a "limited usability tax' and be required to sell the box" to another retailer or pay a huge "abandonment tax" when they blow out of town.
36
@Iris Flag
good thought! And the abandonment tax should cover the cost of a complete tear down and rehab of the site, making it useful again for building or for public parks, etc.
8
Stop providing them with police and fire services.
15
“To municipalities, these appeals amount to a far-fetched tax dodge that allows corporations to wriggle out of paying their fair share”.
Stand your ground so to speak I would say to the cities and towns being assaulted in this manner. What are the retailers going to do if they are denied tax breaks? Leave? Unlikely.
12
This country has become so ugly with these shopping centers popping up like malignant cancers everywhere with all the same purveyors, selling the same overpriced refuse coast to coast degrading the environment and quality of peoples lives enriching only themselves and China
16
The answer is simple if this happens just increase the tax on those type of properties... why are my fellow Americans so dense...
3
A play straight out of the Koch brothers handbook! Such innovation!
22
Want to help America and be patriotic all at the same time? Pay your taxes.
19
Despite the obvious bias of the author, the big box stores have a very valid point. A big box store is not like a house or office building. So what if towns and cities have reduced incomes? Is funding municipalities the job of retailers? Obviously not, given the huge tax breaks given to big companies like Amazon and others to come to certain areas. As for funding schools - the problem there is that schools waste money. The ridiculous benefits and paying absurd amounts to have "minders" follow around certain students with minor disabilities needs to end.
7
Funding municipalities is the responsibility of the people and businesses who inhabit them, because they all benefit from the services and infrastructure required to operate them. Is that so difficult to understand?
13
@nexttsar By your logic, Amazon should start appealing the tax assessments on its warehouses as there are vacant warehouses that could be used as comparisons... we should do the same with our houses by comparing them to similar houses in bad neighborhoods...
7
@Eric T That makes no sense. Houses are easily resaleable and value is based on usefulness and demand. There is no demand or usefulness for an empty big box store. It is not the job of companies to pay extra tax just to fund municipalities and schools. They pay tax, and plenty of it, but it has to be fairly assessed. Just because some district wants more school funds should not put that burden on business. Let them have local lotteries.
1
No American thinks they should pay more American taxes. They do however think that every other American should pay more taxes. Every American can point out waste, fraud and abuse that justifies their belief. And every American can identify expenditures that help make the case why other Americans should pay more taxes. So every American wants more money in their pocket, and avoiding taxes is one of the sweetest ways that most Americans can think to do that.
8
Not true. I, and many others, believe that everyone, including powerful and politically connected businesses, should pay their FAIR SHARE. If businesses had done so from the beginning, there would be less cheating all-around now.
13
I'm with Greg on this one. I pay a lot in taxes because I am fortunate enough to have a job that pays well. I have no children so everything I pay in taxes for schools is essentially going to support other people's children. This is ok by me because I believe an educated society benefits everyone. I have no problem paying for programs that support those who are struggling. perhaps when you suggest "everyone" complains about paying too much in taxes you really just mean yourself?
5
@Richard Mclaughlin
Who was the pundit who said:
"Don't tax me, don't tax thee, tax that fellow behind the tree!"
3
Maybe we should just stop developing for the sake of developing.
It’s like the casino business in the east. Atlantic City was making a killing so surrounding areas began to build casinos and people who wanted to waste their money there began staying home. There used to be caravans of buses from NEPA heading to AC every day. No more.
The point is they just keep cutting the pie slices thinner and thinner. CVS was mentioned. They seem to be moving to compete with Walmart with all the non-drug junk they have in the aisles of the monstrosities they are building everywhere. In some places Walgreens bought up Rite Aid and promptly closed the Rite Aid stores adding to the look of urban blight by leaving those big warehouse buildings empty. They create the problem and then benefit from it.
It’s just another example of our ridiculous system where there has to be constant growth to satisfy the stock market because thanks to IRAs and 401ks everyone wants the stock market to keep going up.
17
This hit us hard a few years ago in rural Michigan.
Legislation was teed up in Lansing to limit this shameful practice which shifts taxes to mom and pop stores and homeowners.
Then a powerful Committee Chair and the Chamber of Commerce shut it down in spite of a bipartisan understanding of this fraudulent methodology employed to defeat reasonable appraisal practices.
Steve Pence
12
Perhaps cities should put up toll gates on the public streets that lead to these stores.
17
Of course, this is just one aspect of Big Business trying to get their customers to pay the costs of doing business in a community i.e., keep the assets and offload the liabilities.
What about this playing off one community with another? Amazon just did a monster deal with NYC, which just gave them a "Get out of taxes free" card for god knows how many years. Communities are all too ready to give tax breaks to induce businesses to open up locally. What kind of signal does that send?
Nonsense!
10
" Corporations are People Too ". Fine. Force them to pay their fair share, and stop finding loopholes and forcing the bottom 90 percent to make up the difference. The dark side of Capitalism, Legal thievery.
Thanks, GOP. 2020.
18
But where do all those Republican voters think the money to pay for their schools, roads, military, etc is going to come from? The Republican Congress and Trump gave huge tax cuts to corporations, now someone else has to pay the bills. You want a strong military with an unlimited budget? Mexico will not pay those bills. Mr Trump wants to build a wall that may not really do anything useful to stop drug smugglers and terrorists. The American middle class taxpayer and their children will have to pay for it. Surprise Republicans! You have given the average Middle Class American voter the largest debt in the history of America (maybe even bigger than during WWII after calculating for inflation). Don't worry about all those Central American migrants looking for asylum or jobs in America at the border. When the economy crashes under Trump's ignorant economic policies (e.g. tariffs) the good jobs in the U.S. created earlier, before the 2017-2018 Congress, will disappear and Americans will be lining up to clean toilets in Trump Tower and mow the lawns at Mar a Lago.
14
As an individual taxpayer with average income (read: not Koch or Buffet) how do I get in on this party? What do I have to do or say to get the authorities to let me off the hook? In 2018, corporate taxes had dropped to account for less than 10% of federal govt revenues, (a 30% drop in 2018 thanks to the latest big Republican corproate tax giveway). And still the mantra of "business taxes are too high" persisits. So, at what point should we just say that, gosh, you've gone to all the trouble of making money as a business, so we won't make you pay anything at all in taxes? Then the entire burden of public expenditures can be borne by individual taxpayers. Are we so stupid that we can't tell where this is going to end?
14
Patricia Cohen: Smart and important piece, but it could do without the NYC snark. I guess it's ok for families to pig out as long as it is at the Union Square Cafe.
"And in Wauwatosa, a shopping polestar in Wisconsin where chockablock malls attract families in the market for $4,000 sofas, Adidas NMDs and a Cheesecake Factory pig out..."
5
I'm sure whatever money these companies save, will go directly into employe paychecks.
4
Don't pay your employees, don't pay your taxes, nickle and dime your suppliers. That way you'll have plenty of cash to buy your local Representative and Senator.
18
So why not Tax my house based on the abandoned shack across town ?
14
Fewer dollars for schools means more workers for Walmart. A double win for the big boxes!
13
Bernie and Warren are right in their sayings, you use our roads, education system, etc it’s called paying your fair share. How many people at these stores use food shelf etc bc no living wage? Yet the bosses are wealthy.
As David Brooks says, “ the social fabric of our society is unraveling”. To me it’s because of the Greed of the top1%.
13
@Calleen de Oliveira How many "regular" people own those companies listed in their 401ks? It's not the 1%... Maintaining stock prices put pressure on publicly held companies to increase (or simply maintain) earnings and when they cut payroll, import goods, etc going after property taxes are just another check box on the list....
@Eric T
Yet it's funny that they never go after the high cost of executive salaries, when they're checking those other boxes!
2
Corporations like Walmart and Lowes move in and take a great deal of the trade away from local small businesses and then turn around and try to say the property their stores stand on should be taxed like vacant lots. Its shameful and all too easy to get away with. These corporations make a big noise of how patriotic and community conscious they are. But when comes to paying taxes they go to unbelievable lengths to deny their liability. And in the end the local tax payers watch their taxes go up.
21
Don’t forget that it’s not just the displacement of small businesses that hurts localities. The box stores also take those profits out of the community. The people that get those profits are almost certainly it spending them where you live.
12
When you shop locally, you’re only using YOUR money to help pay for someone else’s vacation home or kid’s college.
1
I really like the approaches that John and others here have suggested how communities could respond, and would suggest to combine them as follows: If that publicly traded big retailer sues your community for a lowered tax assessment based on a reduction in the value of their property, make it standard operating procedure to forward a copy of that demand to the respective exchange and regulator (SEC etc.), and another one to the insurer on record of that property. Also, don't be shy about posting that information easily accessible on your town's or city's website. If nothing else, that gives your residents a chance to comment and take action.
19
The taxable basis has no relevance to insured values like rebuilding and inventory losses.
@From Where I Sit. These lawsuits are based on the claim of an overestimated assessment, i.e. the claim that the real value of the building is less than the assessed value, and hence taxed too highly. If the replacement value in the insurance contract is above the value the owners claim the building is worth in their lawsuit, they are either trying to cheat on their taxes or preparing to commit insurance fraud.
4
This is called business folks. Properties do depreciate, become obsolete and due to other circumstances and normal market conditions do actually lose value. Again Econ 101 supply demand is at work here. Does the government want to overly inflate real estate values and start another loan crisis cycle? I think not.
1
Buildings depreciate but property/land generally increases in value over time unless the community is in a legitimate economic downspin.
4
The companies aren’t questioning the value of their land. They are questioning the value of the building, which they say would be valued very low if they had to sell it because no other business would be able to use it in the same way.
This theory should be relatively easy to test. If Costco or Home Depot moves out, who moves in? If it’s Sam’s or Lowe’s, the companies are wrong. If it’s somebody else for whom the building isn’t well-suited, or if it is nobody at all, the companies are correct.
1
@Geoff who cares who moves in? Why is the public required to basically provide insurance against loss for large companies?
The buildings themselves have a set depreciation schedule anyway, independent from any other property.
4
It is a negotiation, no more no less.
Of course each side will seek to optimize the messages to their benefit: "is it more fair to do it this way", and "important other programs will be cut...it's for the children".
But at the end of the day municipalities need to decided where to draw the line and be willing to deal with the conseqences, and same for the businesses. It is the nature of our society that comflicting interest find a way to co-exist.
Advice to both sides: be fair, be just, be consistent, cut the best deal and move on.
2
The municipalities should just re-appraise the residential values as well, under the premise that the properties would be de-valued with higher property taxes. Which is accurate - see states with higher property taxes without SALT deduction. Everyone now has a lower "basis" and the municipality can increase the percentage rate equally on everyone. Since the town/city will still need to collect the same amount of money to balance their budget, everyone will still pay the exact same amount - both commercial and residential.
If businesses want to shirk their responsibility, make it a level playing field for everyone. If everyone wins, no one wins.
10
Another way for corporations to move the tax burden to citizens. I guess Paul Ryan’s tax cut want enough. The concept makes no sense. I’d like my home’s property tax based on unsold homes in Detroit. Make sense?
12
Why not tax retailers on turnover instead of property value? The rate could be low, but at least unlike an appraisal it would be based on fact, not judgement.
3
And once again you have national corporations with robust legal teams pitted against town governments with little or no legal support, or funding for such legal assaults. Big business has no investment in customers, towns and our economy.
17
Tax is (literally) not a four-letter word. Neither are taxes.
To pay one's fair tax is to support the community, the idea that we have shared goals (education, public health, law enforcement, physical infrastructure, to name a few).
To have shared goals means that goals are the defining purpose of collecting taxes, not profit. Achieving benefit for the many as opposed to the limited benefit of the few is what having shared goals is about, is what a community is about.
Thanks to corporate America, too many of us have forgotten that without shared goals and the pooled resources (in the form of taxes) that make attaining those goals possible, our communities splinter...then our states...and now, our nation.
It is not a caravan in Mexico that is the threat to the U.S., nor is it the idea that social changes are threatening to the homogeneity of America.
The real threat to this nation is the class of wealthy and super wealthy citizens who no longer feel any inclination to be part of a community, a state, or even a nation. Their only concern is money...and more money...and then, more money.
The only group truly threatening the future of America is its own rich, whether those rich are individuals or corporations.
34
@Not Amused
I disagree. I think the group threatening the future of America is the politicians who hate government running government who want to decrease it’s size until you can drown it in a bathtub. This entails decreasing taxes until critical services can longer function (see Kansas) or the school week must be decreased from 5 days to 4 (see Oklahoma), then blaming critical program such as SS and Medicare in order to do away with these programs. Rich people and corporations cannot vote to reduce or cancel programs. Politicians can, if they have the majority vote to do so.
4
If Home Depot says it is "facing stiff competition from online retailers" it is not showing up in its corporate financial performance. A quick look in Zacks highlights recent growth in earnings per share and projected growth in the current fiscal year. I have no sympathy for these corporations who are likely just enhancing shareholder value at the expense of community value.
18
Home Depot and Lowe’s have a current defense against part of online shopping in that Amazon and others cannot replicate the consumers need to see products (think appliances) or to take immediate possession (think paint or lumber) or ship large items (think both appliances AND lumber). That only lasts as long as Amazons internal and external shippers cannot/will not/do not carry large items. If Bezos were to buy a national logistics company, that barrier would fall the next day. In addition, items like tools, minor home repair products and replaceables like light bulbs, lighting fixtures and housewares are already battle grounds between Amazon and HD/Lowe’s.
Always starts with plea for incentives. The businesses and developers boast of the marvelous benefits such as the boost to the tax base. Zoning variances sought and granted. Public money spent for infrastructure support. They dangle the promised riches and localities usually take the gamble. Concerning comparable assessment, should homeowner taxes be based upon a distant vacant aged house in a depressed area? Why not use something directly related; the sale leaseback scheme often used by business and industry? Puts a price on the property and provides plenty of comparisons. The worst con of ll is the pretense of being part of the community. Of course we re all culpable through consumer complicity. Pogo was right once again, "we have seen the enemy and they is us." We consistently make deals with the devil and expect a reasonable outcome.
17
The rich and corporations in general pay way too little in taxes in relation to the revenue and wealth they obtain and pay out, but let’s recognize the reality that big box stores and department stores and malls are dying, and there is no legal obligation on the shareholders of the corporations that own them to keep them open when they become unprofitable. Watching the slow motion death of these properties across the United States has become a depressing movie. An empty mall creates no jobs or tax revenue at all. If communities can’t pay for the services they provide without imposing an unfair tax burden on the businesses they can’t afford to lose, then either the homeowners have to pay the difference or the services have to be cut.
6
And now the courts have a slew of newly appointed pro business republican judges to approve these lawsuits on property taxes brought by big box stores. Your property taxes are going to continue to rise. On the plus side, capital gains on your stocks have gone way down, as has your tax on your pass through income from your corporation, way way down, to 21%. If you don’t own stock and aren’t self employed or own a corporation, too bad for you.
7
My thought exactly!
1
Just think how these conglomerates closed down main streets across the country during the last 30 years. These were small and medium size business' who prospered for decades and support small and medium towns with jobs and tax revenues.
But they were put out of business by these conglomerates, be careful for what we wish for. They have no loyalty to the community or society.
12
Let's see if the tax assessors have the courage to turn these Robber Barons down. If they do give them a tax break none will stick around anyway when there are greener pastures offered by other towns/cities.
The whole thing is ludicrous. Brick and mortar retailers are using the internet to increase business, too. Just another tax evasion attempt by the wealthiest.
The real answer is to tax the hell out of internet retailers and their "BIG investor" owners like Jeffrey Bezos.
10
Corporate America, aided and abetted by modern "conservative" thought, only thinks of two things:
(1) more profits
(2) less taxes
So people - both their employees and their customers - are no longer "human" but rather as the Supreme Court has decided, corporations are (the real) people.
We are seen as nothing but so many wallets and so many bank accounts waiting to be sheared like sheep.
7
@Not Amused
Sheep indeed. I've seen that coming since American citizens were relabeled as consumers.
2
AS someone else has already stated, even a little kid knows it is just plain wrong to take from people without giving back.
What probably needs to happen is for these monster corporations be reminded that their corporate peers, circa 1960's and 1970's were required to pay their fair share of taxes at the 90% rate.
It is long past time to get tough with these corporate welfare queens by not threatening, but actually implementing both higher tax rates and accompanying penalties for stalling.
If they don't like it? Let em leave. At the very least it will give an opening for small businesses to return again.
8
@RLC (1) US corporate income tax was never greater than 52.*% (in 1968/69); (2) corporate income taxes are very regressive, as these taxes are just passed through to shoppers in the form of higher prices; (3) bricks and mortar retail locations are in fact much less valuable in the online era, so reductions in property tax valuations for those locations is warranted; (4) property taxes are the most local of taxes; if individual homeowners don't like the level of their property taxes they can readily elect new local politicians who will decrease those taxes.
2
Eliminate carried interest and capital gain preference. I’m tired of rich people getting a free ride. The more we give these corporations the worse life gets for most of us.
I am not willing to drive on shoddy roads, have poor schools, and bad services so the people on Wall Street can get a bigger payday. Basically, I care as much about them as they care about me. Which is not at all.
3
The percentage that their tax expense is reduced should also be reflect in services given. A reduction in police calls for shoplifting, plowing roads in front of stores etc.
9
How many of these "Dark Stores" became "Dark" after the expiration of a sweetheart tax break from local town officials?
I would guess the number to be quite substantial, especially in States where it is easy for a business to close up shop and relocate to the next nearby town offering them a new round of great tax breaks.
10
Well, first they must state just how well they got off on that $1.5 TRILLION plus "tax cut".
For instance, Warren Buffet, who for years has pointed out that his secretary pays more taxes than he does, recently proclaimed that on that "tax cut" his corporate taxes were LOWERED another $29 BILLION.
Now, it's true that his holdings are almost a trillion dollars.....
But, really? His bill went DOWN $29 BILLION???
So, when these corporations whine that they are getting shellacked on their property taxes..... check out those claims.
And tell them that they are lucky that they are not in the BOTTOM of earnings, because those who are in the bottom percentile had THEIR TAXES RAISED BY 20%. How odd. Why didn't the corps have their taxes RAISED?
You can google that and when you do make sure to also google the "top 20 corporations that pay NO taxes".
Oh, yes. I consider that "tax cut" to be nothing but criminal.
Reverse it before we go utterly bankrupt.
11
I just told my wife about these modern robber barons trying to fleece our great nation, and she said even little kids can tell this isn't right. Community leaders who offer incentives to expand in their communities simply rub salt into public wounds for the oligarchs. There's a direct link between the Federalist Society, McConnell, Uber, Amazon and the fleecing of our great nation.
25
Taxes are the price of civilization, and these corporations don’t want to pay for civilization.
Let them move to Somalia and sell their products there.
70
Walmart, Home Depot, Lowe's and other big box stores have an ugly history of cannibalizing mom and pop stores, leaving themselves as the only game in town, a town that becomes depopulated to the point that these big box stores fold. Mom and pop stores are the ones who should receive tax incentives, not the billion dollar big box cannibals.
59
Consumers are part to blame. If you choose to shop at these mammoth stores all the time or a majority of the time you now see what happens when you loose the small businesses. These chains have no stake in the communities and the proof is from the start.
Sadly our governments continue to look for quick fixes, sometimes selling out the soul of the city. I do pretty good avoiding mammoth chains. Luckily in STL there are wonderful local options including a one shop grocery, and I can reserve Target for toilet paper.
13
If the citizens of these towns are really concerned about what these big box retailers are doing, the solution is simple. STOP shopping there and support whatever small business remains. You know, the businesses that pay their fair share in taxes. The problem is in the mirror; luckily so is the solution.
48
@I Heart
Nice theory. But beyond unrealistic.
First of all, in many communities, there are no options. Perhaps, like in mine, yes, a non-chain coffee shop.
Second, Americans, regardless of price, are way too used to having selections that the old stores could never get near offering.
Third, price.
How about cities condemn the land using eminent domain and paying out the low sum that the retailer negotiated - kick out the retailer and resell it to someone else. Could be a nice money maker for cities.
8
@Turgid who would buy the land, knowing the city could also turn around and boot them out, too?
1
It's not clear to me why commercial real estate taxes should go towards schools. No children live there. Cities would be wise to set up tax treaties with businesses such that taxes are fixed and increase only with the agreed inflation indicator. The taxes can then be allocated between school and municipal budgets by need.
2
@kwb
Because companies are part of society.
Welcome to the world.
29
@kwb
Commercial retailers rely on a literate workforce and consumers who can read. It is public education that provides that.
15
@Socrates
Or, as Mitt put it:
"Corporations are people, too!"
Republicans confuse that part every time....
3
The rich get richer and everyone can run faster. Totally unfair of these corporations, especially Walmart with 5 of the richest people in the world as owners. The commercials for the retailers mentioned are so family and community oriented to sell their goods, that they obviously are a bait and switch program.
19
Some observations:
1) Location, location, location. If they want to be taxed at the evaluation of an empty shell, they should have bought the empty shell, renovated it, and then waited for the customers to show up at a location which is disfavored by the shopping public. It is either the big wigs made a mistake in choosing the current site or they believe they get more value from it than the 'empty-shell' site. Seems they want to have it both ways.
2) Use an alternative valuation method such as the square footage of land used. A municipality could get fancy and have separate rates for conditioned space (then use a cubic foot basis), material storage/sales yard (e.g. nursery, car lot), parking lot area, and number of driveway access points to dedicated streets. Could also use the traffic volume on adjoining streets as a factor.
3) These facilities use public services and cause the city to incur costs for street maintenance, police, fire, EMT services, etc. too. Responsible businesses should be willing to pay for these and not stiff the city for them.
4) Hold the businesses accountable for the taxes on a square foot basis for the site once they leave. Do not allow them to abandon the property as as an out. This will help promote longer-term commitments and mitigate the eye-sore of an empty shell.
None of this is new. It reflects back to the 17th and 18th centuries. Then the inequality of the nobility presented similar problems to what we are facing in our changing economy.
31
If no one wants to pay for civilization -- and civilization is financed by the pooled resources of the beneficiaries, in a process that can be called taxation -- then you have less and less civilization.
No taxes, no civilization, which we see as schools suffer when Walmart and Lowes dodge taxes.
No government, no country, either.
America just doesn't want to be civilized any longer, and corporations don't care.
"We the people" have, in the hands of our corporate masters, become "They, the proletariat."
74
@Mark
An excellent observation.
Should anyone lose their sense of civilization may it be in a place occupied by lots of right wing politicians.
One would not want any real caring people to get hurt.
3
@Mark
We are in a state of decay, an end of life phenomenon.
3
Retail business make location decisions based almost exclusively on access to consumers. Municipalities should remain firm in their assessments. If the business moves away it will not be due to taxes.
38
@Joel Lee
A municipality may "remain firm," but that doesn't matter when it gets to court.
Retailers are using the law on the books, if governments don't like the outcome of these laws, they can change the laws.
1
I think you grossly misunderstand the power of lobbyists in this country. When ALEC can write the laws, we essentially have corporate America calling all the shots. Without an informed electorate willing to vote OUT the complicit politicians, changing the laws is nearly impossible. Welcome to the new America.
28
@Left Handed It is big businesses not small stores and they should not be allowed to have communities, especially their schools, impacted by the greed of the corporations. And that is all it is, greed!
1
Lost to the typical American taxpayer is the tax code's definition of 'imputed income' broadly defined by accountants & IRS as non-monetary income. At the individual level - company provided cars that are available for personal use provide financial benefit to the employee and their value is taxable (this is why the vehicle's personal mileage is recorded OR the co. charges the employee a monthly fee), if your job provides free parking in a car park that charges a fee, this fee is added to your income.
When it comes to corporations, imputed income is not taxed. The free money tax payers give to corporations is no different from the car or parking an employer may provide, yet, the recipient corporation does not pay tax on this free money.
The SCOTUS ruled in Citizens United v FEC that corporations have the rights of individuals. That being the rule of law, then corporations have the responsibility of individuals to pay their fair taxes.
32
It would tend to offset the cities’ tactic of charging a higher property tax rate for commercial space (versus residential).
3
These embattled local leaders should respond by either closing schools and ending school transportation, and posting signs saying Closed By Wal-Mart or double residential property tax bills and send out demands marked Doubled By Wal-Mart. It’s time for ordinary Americans to get angry about this corporate cancer in our midst. They have been gaming the tax code for much longer and in much more devious ways. The small to midsize retail they drove out of business across the nation paid their taxes AND paid workers a living wage. What a Faustian bargain we’ve made.
53
@Xoxarle. You're not wrong, but it only gets at part of the problem. Which is of course, us. We're too busy getting the lowest prices from these rapacious retailers, who in return crush their workers through low wages (and are subsidized to do so). How about this: every time another Main Street business closes, we could put up a sign that says: "Closed by Local Residents Who Don't Want to Pay More/Can't Wait and Would Rather Shop at Walmart or Amazon.""
23
...or better yet, close their big-box stores instead—with big honking banners that say "Always Evading Taxes, Always!"
There's no need to beg megacorps to keep offering their (petty-pay, tax-trashing, creepy-commerce) jobs while caving to their every Audrey II Feed-Me for tax and regulatory incentives that'd close our schools, when people who *aren't* out-of-towners can set up non-evil stores, employ their own, and actually know what the neighbors want! As an (actually vastly MORE important) added bonus, the small shops are closer to home—less money to BP, and less climate-attack in return *from* BP!
Kick out Walmart, and bring back the bodega. Let's make eminent domain great, and good, again.
3
Local governments love it when shopping centers are built because they bring in tax money. They go out of their way to encourage such development. In my small city that is a bedroom community to New Orleans the city "fathers" have encouraged one shopping mall after another and all have been touted as a boon to the community, and they fail and go bankrupt a few years later. The developers are offered all sorts of incentives, like tax discounts, or no taxes at all, to build. They recently built a huge sprawling shopping center just an exit down the interstate from a similar development that failed and has already been torn down. It's full of stores that sell kitsch or over priced pet food. They call it a "Town Center" but it's on the edge of the city limits. There's no sustainable market for the products being sold so I predict it will soon wither. On the other side of town the shopping mall, with a food court, that was anchored by big retailers like Sears and JC Penny is mostly vacant. A nearby Target story recently closed down. Walmarts are booming, the drug stores are booming. CVS even bought a strategically placed fire station from the fire district, tore it down and built another CVS drug store in its place. The people in local governments are suckers for a promise of a quick buck from developers and big, national chain retailers.
22
"Walker Warns Against Eliminating Business Tax Credit"
Oct, 2018
Wisconsinites might want to look back at their former Republican Governor Walker, Mr. Tax Incentives for big business. For therein lies the a big part of the problem.
A Governor who cares little about the tax burden on its citizens.
39
Every corporate user of public services and infrastructure should be required to pay a use tax. Their fleets put stress on our roads and bridges; they pollute; they pay next to no taxes of any sort; and they often pay such low wages that their employees have to use food stamps or the Medicaid supplement. I am tired of highly profitable corporations getting a free ride on the backs of hard-pressed Americans. In the old days where corporate employers provided pensions and a decent living for their employees, one could perhaps rationalize highly favorable tax treatment. Now that the robber baron era is back, we need to rethink how we treat them.
90
That’s fine in theory but why should a retailer or industrial business that has worked to limit its labor cost have to blindly open its proverbial wallet to fund such infrastructure or services where public employees receive unjustified wages, benefits package unheard of in the private sector and golden retirements? If Walmart pays its workers $11, why shouldn’t they balk at paying highway crews $50,000/yr and cops while they’re in the academy or fund pensions for teachers?
1
We see clearly, once again, who the real “takers” are in our society- those who already have the most.
We need a marginal tax rate higher than what AOC is promoting to help cure the rich of their pathological wealth-hoarding.
22
@Ed Watters
Eisenhower's was OVER 90%.
That was where we got the tax-money to build the interstate highway system and the schools needed for that population explosion after WW2.
That was about the last decent thing that a Republican politician ever did for this country.... 60 years ago...
6
In 1945, at the conclusion of WWII, corporate taxes accounted for 35.4% of total federal revenue, with individual taxes accounting for 41%. Fast forward to 2018 where projections have 49.8% coming from individuals and 11.3% from corporations. Get the picture? We are the United States of Corporate America.
68
@ANDY
If you raise taxes on everybody (but yourself of course) the percentages don't change. Furthermore, taxes levied in wartime are hardly typical.
1
@kwb
Sorry to bust your bubble, kwb, but Eisenhower was well after WW2, by about a decade, and his top rate was over 90%.
And, for the record, this nation has been "at war" for the last 20 years - and during THAT time corps have had their rates go down and down and down.... at the same time that the military budget has gone up and up and up....
to the point where, now, the military budget is 63% of discretionary monies.
Make sure you tell that to the 35,000,000 Americans who won't be getting their food supplements next month because trump wants 5 BILLION for a wall that everyone has told him isn't any near a solution on security.
10
@kwb
I pay my fair share, always have, always will, and while I may complain that they are too high, I have always believed that taxes are a necessary evil. One that should ensure that the common good is first and foremost in how they are allocated. On the other hand corporations have had one and only priority for the past several decades, shareholder value. With 84% of all equities held by the top 10% you can see where that has gotten us.
8
This article leaves out that the retailers often create the dark stores themselves. They build a new, bigger big box store, put deed restrictions on the sale of the old one to limit competition, and then claim the empty store won’t sell as the basis to claim the new store is overtaxed.
Time for state legislators to represent the people of their state instead of out-of-state corporations.
123
@Ehed
That is an important point, and one that is included in the article.
"Restrictive clauses in leases that companies themselves impose — such as prohibiting its use by a competitor — can further depress a property’s value."
Thanks for underlining, though. -- Patricia Cohen
4
Corporations will always try to weasle their way out of paying anything other than millions to their executives. They need to be forced to pay by towns, Walmart can't afford the bad press to sue a town and actually win the lawsuit. They need the town to settle because they can't do anything else or the town just ignores the suit you can rest assured Walmart would withdraw the case.
9
We live in a time of rapid change - the IT based industrial revolution (including expanded choice when one shops on line), is changing the way societies mesh together.
Local taxes are required to provide the necessities of modern life - clean air & water, sewage, roads, public transportation, energy, schools, internet, etc. Each citizen benefits from their availability, They have to be paid for. Property taxes are prime ... Going up as values increase. Look what happened to the education system in CA after proposition 13, it went from first to almost worst.
If you own a factory making "widgets", you are allowed to depreciate it as it "wears out", the same is true for "big box stores". There is the need for constant renovation. If demand falls you close your store, the structure's use has ceased. If you need a bigger & better modern factory to make your "widgets", the old one is just closed down, often abandoned. If your business fails to provide "widgets" satisfactory to current and future needs, goes Bankrupt. The building is abandoned, it has no value as what it does is not needed anymore.
Yes, this is a big problem for cities all over the USA. Communities compete for business, factories by offering property tax rebates. New retail stores have lower rents, taxes, costs, so why pay more to be in an outdated locations!
A solution is a National VAT on all goods & services, which would rebated back to each community, for schools, infra-structure - replacing property tax.
11
I am sure all these stores are using the full investment they made to their property for depreciation purposes. Here are some ideas to consider:
1. Use the depreciation base investment into the property as the taxation base
2. If necessary, use the average of the depreciation base and the market value for the tax base
3. Raise the tax rate on properties evaluated as the empty and useless buildings
4. If evaluated as such, add a surcharge to these buildings because they are actually creating value
8
@Cemal Ekin
Items 1-2 make a lot of sense. 3-4 might have unintended consequences.
4
Andersen Windows manufacturing plant had large property tax settlement with a small town here in MN decades ago. Marvin windows saw the settlement and being the benevolent employer it is just went to negotiations. Many of these small towns use their one large employers property taxes as a piggy bank. The problem in Wisconsin is compounded by the way politicians want to keep the appearance of a low tax state.
5
It is about time Corporations realize they need to pay their fair share of taxes because it’s the right thing to do. We all benefit from tax dollars bettering our communities, infrastructure, education, etc. They are looking to receive all the benefits of tax dollars but don’t want to pay any themselves. This short term thinking has to stop. Americans need to wake up and stop buying the the pablum coming out of Republicans on tax cuts. It is a bunch of malarkey used to hoodwink the public so the rich can get richer. In the end this helps nobody. Stop the greed of the few.
11
Simply, corporations do not pay property taxes; their customers pay those taxes for them.
Whether retailers such as the mentioned Walmart, Home Depot, Target, Kohl’s, Menards, Walgreens, Lowe’s, Nordstrom, Best Buy, Meijer, United Healthcare, or KFC recognize - or admit - it or not, these practices are directed at shrinking government, since corporations are merely the conduit through which taxes are levied by government(s).
Corporations collect such revenues in the price of their products, then remit those revenues on to the government ('we the people').
Adding insult to injury, when corporations do get taxes lowered, they don't reduce prices, they just pocket more profit; but think how many times corporations have raised prices, declaring they had to because taxes went up.
After all, how many of us saw price decreases in 2018 for products/services, as vendors/merchants passed through their $1.5 Trillion$ tax cut from last December ?
Through such aggressive tactics as this piece describes, corporations wittingly/unwittingly wage war to keep government (we the people) reined in so governments have as little funding as possible to conduct oversight, or regulate, by simply refusing to serve as conduits for collecting monies for fire, police, schools, hospitals, etc.
Indeed, as Grover Norquist proudly proclaimed, the goal is for government to be small enough to drown in the bath tub - but since government is 'we the people', who's really getting drowned ?
47
@R. Law
And right now, much of the government is closed. We will soon realize whether or not we miss it, what parts and how much!
1
@R. Law
Exactly! Starve the "beast",then let it die. Whittle down the power of government to oversee wrongdoing,then Norquist and ALEC can blame government for its inefficiencies. It is a self fulfilling prophecy.
1
In addition to (likely) lower appraisals and property taxes, large retailers in several Western states have another tactic to improve their bottom line - the pif or Public Improvement Fee - granted by local jurisdictions to developers.
This % fee (or tax) is charged on every sale and goes directly to the property owner to compensate/reward them for developing the property. The percentage rates vary, often between 1 and 2 percent, and are charged in addition to applicable sales tax. There are pif’s on all sales at shopping malls and centers, and at a nearby location of that struggling retail chain, WalMart.
4
These huge corporations have long been averse to paying taxes...or ther lower-level employees. They exist to enrich their grotesquely overpaid top executives, and their shareholders. That's what they're for. Not paying taxes. That's for the 'little people': us. Never mind that these stores can't get customers or supplies, or ship their goods, without roads, electricity, police, etc. etc...
The arrival of a megastore in/at/near town is fundamentally bad news for the town's population. And the rest of us. Unfortunately, we're too busy buying cheaper goods online from Amazon to notice.
13
Welcome to the ever present world of selective appraising, a fact based art form where no one will ever know what anything is worth.
Many people in big states have gone to jail for it but not always in smaller ones. There are lots of laws and professional codes against it ( or so they say) but it’s never enforced. Big word here again for me is greed. Those huge company’s have enough. Their money people need to go find another dime somewhere it doesn’t hurt the consumer and city they are in.
8
Since they want to claim that the building being there devalues the property because it would need to be torn down when they leave perhaps part of the agreement to obtain a license to build should include a bond to pay for the cost of demolition. They should not be allowed to leave a useless empty store on the lot when they leave.
38
@Hugh Robertson Exactly. We have four abandoned, stand-alone Walgreens buildings within a three-mile radius, in varying states of decay and the parking lots breaking up and overrun with weeds. This is the result of Walgreens' massive over-expansion and subsequent closures.
How do these companies get away with dumping their empty buildings on the communities to be dealt with? Walgreens didn't go bankrupt, still has over 81,000 stores and an estimated net worth of $105.6 billion. Their CEO alone has a net worth of $11 billion, with probably enough in tax breaks to support my town's six hurting schools.
4
Tax avoision is becoming a disease. At the federal level we simple print more money to pay for grossly underfunded entitlements. But I expect many towns and cities are going bankrupt in the next recession. Public employees at the municipal level can say goodbye to their pensions and benefits. In Pittsburgh it's not uncommon for a retired bus driver to receive 100K in pension and health. No politician can deal with it because it's political dynamite. I suspect about half of American cities are in the same boat.
13
@Epicurus. To claim that a retired bus driver gets a $100,000 pension is nonsense. And you know it.
4
@Kb You must not know any retired public service employees. Health benefits for a retiree and spouse, 3K plus a month. Pensions for 40 year city of Pittsburgh employees run from 40K to 60K. My own mother took 1.5 million from the Pennsylvania teachers retirement system, EXCLUSIVE of health benefits. I have a cousin and his spouse who will together draw 80K annually for 30 years or more from the New York state teachers retirement system, EXCLUSIVE of health benefits.
2
Just one more reason to end property and sales taxes as a local source of revenue. It's useless to chase this fleeting source of income and start to concentrate on income revenues instead. Taxing what people purchase has always been the wrong end of the stick to hold on to and chasing property values is another losing game for all parties.
11
Please continue with articles like this.
Maybe finally voters will realize that "tax cuts" mean:
1) fewer services for Americans, and/or
2) more expensive services for Americans
The trickle-down "cut taxes for the wealthy" myth gets far too much air time in the media.
It's time the media starts to emphasize the consequences of the cuts.
147
@SLBvt, you think "It's time the media starts to emphasize the consequences of the cuts"?
The media are owned by...the wealthy. Do you think your message will ever get mentioned on Fox?
5
@SLBvt
The average voter is a moron and in general is incapable of being educated or caring. They are burdened with various debts...credit card, college, medical, mortgage...They are indentured servants unaware they are serving the corporate state.
3
These companies are not paying cash to build these massive buildings. Tax them based on what the valuations they used to persuade a bank to finance the project. If the company is arguing now that the project is worth no more than abandoned property, then the bank should be required to write down the loan to that value or the company has to pay down the loan to the fit the new loan to value ratios. You would get the banking system arguing for an end to this novel appraisal approach quickly.
211
@Kathy..More than likely the companies have enough cash on hand to pay down the loan to the asseed market value. But this is a very good idea Kathy.
8
@stever
I agree. However, if I am a shareholder of a company that has to pay millions to offset a writedown in valuation that has no ongoing value, how long until the shareholders revolt and call for new management? Share buybacks add no value but they prop up the stock price. Payments for lower valuations place the focus where it belongs ...banks for underwriting our overly saturated retail space and retail managements for miscalculations. I also like the comment from another here that proposed that these facilities should be required to post a bond in proportion to the flexibility of the space to be converted to other uses. This clears the land again to help the community adapt in the future.
19
Great idea. Now let's take it one step farther. If a company argues in an assessment appeal that their property is worth no more than some amount, then they are legally obligated to accept a purchase offer that exceeds that amount. The capitalists should love this idea. After all, they argue the company's primary responsibility is to maximize value to their shareholders. Why should the company hold on to an asset when someone has offered to buy it for more than the company believes it is worth?
20
If the poor big box retailers want to play this game, then how about imposing a sales tax paid BY the seller equal to that paid by the consumer for every item they sell? Kind of like employer/employee payroll tax. Raise your prices? Sure. Then your tax goes up to. Property owner leasing the stores? Same deal, only the owner of the building gets to pay that tax.
We had a successful developer in Geneva, IL who has kept a large swath of prime property empty (off the tax rolls) for over fifteen years, after tearing down the failing mall. Why? Keep the property taxes on it LOW LOW. Pure greed.
4
@Karen K
The growth of internet commerce means retail is under price pressure. Piling on another sales tax is likely to increase store closings.
Plus this "solution" ignores non-retain factories and the like.
2
@Karen K This developer would not allow the mall to be empty if he had willing tenants. Does this not seem obvious to you?
1
Ironic that when I make improvements to my house my taxes increase because of the increase in the value of my home.
74
As several have already said, shop elsewhere but sadly 'Main St' is gone, and on-line, as attractive as it is, does nothing for the town's bottom line.
The American consumer is the backbone of our economy, not the corporate retailers. Use the power we hold - the money - or better yet, don't .
Boycott. Pick a day, just one day. Take the kids, the grandparents, the neighbors and simply march outside the store for a day. Don't go in. By not paying their fair share of taxes they are trying to close our schools, make roads unsafe, reduce the police force. Whatever your town stands to lose.
The only way to get their attention - hit'em where it hurts, the wallet.
And if they don't get the message at first, do it once a month; then once a week.
And pass a law that requires them to pay for the town's cost to defend these tax appeals, up front, at the start of the grievance.
While we're at it, the same boycott would work wonders on the gasoline industry. Don't buy gas on, say, Tuesdays.
36
@Greg
Not buying gas on Tuesday is meaningless if you buy gas on Monday and Wednesday. If you want results, organize a movement not to buy gas in 2020.
4
@Greg
And there's a problem with the current price of gasoline?
Currently it is way cheaper than when I was a kid at 30 cents a gallon, after inflation.
Simple response:
If your store is worth so little, sell it to the town for a very small price. Then you will pay NO real estate taxes at all. (You also will be out of business at that location, unless you rent the store back from the town.)
27
Missing from this article is the fact that taxpayers are already burdened by these stores because employees make such a low wage that many need to collect public assistance to survive, while owners rake in millions.
Publish a daily list on the front page with names and locations of the stores that want to raid the wallets of small-town America, but refuse to support local fire, sanitation and police departments, and public schools - so that consumers can choose to shop elsewhere.
188
@common sense advocate That would include Amazon in Seattle..... Bezos was responsible for heating up the rental and real estate markets but refused to contribute towards those made homeless as a result.
But I think the problem is much larger than greedy companies. In essence we are turning into third-world citizens in the eyes of our corporations - who see more profitable markets overseas.
13
@common sense advocate
Taxpayers would be a lot more burdened if these two-digit-iQ ilk couldn’t find any jobs at all. They are legion, and reproducing themselves at a deplorable rate. Supply & demand, baby.
Or do you want to pay $4 for a head of lettuce at Walnart, and $12/pound for ground beef, to support higher wages?
2
@Earthling Instead you pay it in taxes to support food stamps and Medicaid. Did you know that more than 20% many states' budgets go for Medicaid? That's another way resources are being bled from state and local government. Be assured..... you are paying.
14
As a child, I can still remember when my parents were thrilled a new business was moving in. Why? The business was going to provide jobs paying enough to support a family, and was also going to pay taxes that helped with expenses faced by the town. The shareholders at least made an attempt to be good corporate citizens.
Now when that company comes to town, people are just happy that they might have a chance at a job that allows them to support their family without having to be subsidized by the government. And the towns consider themselves lucky if they don't have to subsidize the business.
Oh, how times have changed.
"We have a problem Houston."
Then again, how many in this country even remember what that phrase represented to the US? That sentiment seems to be completely lost in our new era of "personal responsibility", so I digress:
"You have a problem"
24
Even before we talk about these corporations bilking us taxpayers on the real property tax payment, we need to understand that we taxpayers also subsidize these corporations every time one of their underpaid employees gets food stamps or medicaid or some other taxpayer provided assistance. And why does this occur? To maximize their corporate profits so that their owners get more money.
114
@tbs, in 2018 over 40 million Amercians were enrolled in SNAP (food stamps). Or put another way, the employers of over 40 million Americans were being subsidized by you and me. In a 2018 study of five states, the worst offenders were Amazon, Walmart (you're welcome Walton family) and McDonalds. Now, I get it - if we didn't subsidize these companies with food stamps, we would all pay more as consumers. Well, so be it. It's our money one way or another. At least we would have more control over which company we wanted to give it to.
33
@sgoodwin
And the USDA hides redemption info to protect retailers, so we cannot see which corporations are doubly making out on food stamps.
8
@sgoodwin:
If you are o.k. with it, think again! Perhaps capitalism is not the way!
2
Once again we watch as boardrooms work to maximize profits for themselves with little regard to for the community or even the nation. And why not? Even when statutes exist to curtail abusive practices there is no one and no funding to enforce these statutes. Just look back over the last twenty years to see the damaging and cynical effects of this neglect: The mortgage crisis. The opioid epidemic. Facebook and identity theft. Even the recent intransigence about Trump’s wall can be traced to our inability or unwillingness to enforce existing immigration laws (much to the benefit of large labor-intensive businesses.)
21
@DB
And I might add to your accurate observation. Whom do the Trump supporters think hire these illegal immigrants? FOX news doesn't mention Trump does, and all Republican led companies do as well - and they are about 95% of all companies. From picking produce, to construction, to cleaning dishes and tables, to cleaning houses and the toilets of Trump's golf course resorts from Florida to NJ, and across to California, and to the cutting the grass of every nice neighborhood in America, Republican businesses hire illegals so they can pay them less, work them longer and provide no benefits. Does anyone think that people would still want to come here if they could not find a job? Solution - imprison those who hire illegal immigrants - the business owners, and no more problem. So the idea they want border security is just another con job because the fact is these immigrants generate profits. We need border security, but an expensive wall is just a distraction from the real theft going on by corporate America in terms of not paying taxes that support the country that have nurtured them and provided the environment of their success both domestically and internationally. Our large military protects multi-national financial interests abroad for which they now pay nearly nothing. Paying lower domestic taxes also increases profits for a very few, for today. Tomorrow, someone else will have to fix the problem, but their dynastic wealth will be created, sheltered and distributed abroad.
4
First corporations receive a huge Federal income tax break and we are hearing that we will see cuts coming in various programs. Indeed we already have to SNAP but many worry about changes to Medicare and Social Security.
Now corporate America is finagling it’s way out of State property tax which is essential to local communities for nearly everything from police, fire department and schools.
Who pays? All of us will in the form of increased taxes or decreased services. If they want a say in government via Citizens United then they need to pay their share. No more skirting responsibility for increased profit.
66
@Dawn And don't forget, thanks to the Republican crooks in Washington, if your property taxes exceed $10,000, you lose that deductibility. In some states that is still not a problem, but it will be. It will be if we continue down this road.
63
@Karen K, here's a radical idea: end all personal and corproate deductions and exemptions. And then set personal and corporate tax rates at whatever rates we require to sustain whatever govt services we all want. No more gaming the system. No more fake tax rates that aren't real because of deductions and exemptions.
5
@Karen K Why should those of us who like in low tax states subsidize your tax deduction for high taxes. There are few sides to every argument.
I'm sure the SEC would be interested to know that billions of dollars of warehouse-type property is overvalued on the books of these publicly traded companies. Half of what is currently being booked as Capex for building a store should probably be booked as operating expense then, right?
83
@John That’s how small communities in Alaska finally got the oil companies to pay their fair share of property taxes. They simply pointed to what the companies told their shareholders their property was worth and asked why the companies appeared to be committing securities fraud.
28
Ultimately, this tactic backfires. If homeowners have to pay higher taxes, they have less to spend on consumer goods.
18
I don't know why this is controversial. Property taxes are based on "market value" of the property.
The idea that market value should be constant or only go up is plainly ridiculous. Just like the market value of Detroit homes and stores plummet as the population moved out, so too must the market value of big box retailers be adjusted to the new realities of on-line competition and closing big box retailers.
Municipalities can either accept reality or spend a ton of money litigating un-winnable cases.
3
@Baron95:
Clearly you do not understand market value. There is no magic book one can open to find it. It is the function of human interaction: being that which a willing buyer will pay and a willing seller will accept, both without any distress. Plenty of room for debate, as history readily demonstrates.
9
@Baron95. But they’re not basing it on market value at present but predicted market value if vacant, and they’re using the sale prices in other towns or regions. That’s like me contesting my home’s property tax by citing what an uninhabited house would sell for in a different neighborhood or town or state. That wouldn’t fly, and this shouldn’t either.
24
@Baron95
As the article pointed out, the value of commercial property is determined using three approaches: comparable sales, replacement cost, and the income generated by the property. Relying on only one approach violates appraisal standards.
4
I think this type of gaming of the system is symptomatic of the immoral tax break that the Republicans rammed through Congress. It's just Wack-a-mole. If you cut taxes for corporations, private citizens have to pay. There are no real tax breaks, just winners and losers and fixed costs. The tax breaks just become taxes or fees for people on fixed incomes or with less money and political clout to pay. I don't think the tax assessment for a property still in business should be compared to one out of business and up for sale. That's not the point of reference, just an invitation to bankruptcy. Corporations, physical and online, have to pay taxes; that's the cost you pay to make money from people in a safe environment. And no more bribing companies with citizen tax dollars. I'm glad that Boston did not do this with Amazon.
149
I'm currently on assignment in central Michigan, and I can tell you that there are a huge number of vacant shopping malls and plazas that literally cover most of the town and suburb landscapes. At the same time there are new big-box stores being built right next to them. I'm certain they received lower tax incentives to build these new structures and they will probably petition for lower taxes now that they're in operation. Why have the older, abandoned plazas and malls not been sold or rejuvenated instead of building new structures?
Another observation, residential property taxes are high in this area. Can you guess why?
I have an idea: all of the homeowners in MI should petition that their next property appraisals be based on abandoned, unused houses in distressed neighborhoods in Detroit or Flint, etc. If it's good enough for corporations (remember, they're people), then it's good enough for regular folk.
321
Keep it up, big box retailers. All you're doing is making people like me more determined to shop online. You want all the services a town or city delivers, but you don't want to pay a fair share of the taxes. Got it.
112
Isn't it great that online retailers eagerly assess sales and use taxes to benefit local communities and don't go fishing for property and sales tax breaks for any warehouses they build or headquarters they relocate?
27
The problem with that response is that you’re hurting your local municipality even more by shopping online, and really shooting yourself in the foot if it’s on Amazon, which has received massive taxpayer subsidies to expand and has helped put countless small, local shops out of business. It’s those local businesses that are the real backbone of local economies. They typically don’t have the same tax avoidance strategies, like dark store valuations, available to them and not would the be as eager to use them even if they did - local businesses tend to be rooted in a place and vested in its success. Heavy online shoppers have their heads in the sand and are only hastening their town’s economic slide...
14
@JenD
You think Bezos and Amazon don't argue for lower taxes on all their warehouses? How naive can you get?
5
“These warehouses are obsolete pretty much from the moment they build them,” said an attorney for some big boxes.
That says that the big boxes have devalued the property they bought and built. Their business decision.
It is also worth noting that unlike my home purchase, the big boxes can depreciate their real estate investment, and enjoy that tax benefit.
154
@Paul If your home purchase is for rental property, or your convert your home to rental property, you can depreciate it.
4
@Hudson Bronner, Hey, corporations are people, therefore, people should be corporations. Therefore, we should all be able to write off all of our expenditures and depreciate all of our assets just like other "people," right? I think it's time to quit allowing corporations to play with the tax code while leaving the rest of us to pick up the bill.
18
@Paul, Agree with our thoughts, but I think it would be valuable to have the law firms that advocated this approach get the credit and publicity that they deserve. Why should these parasites be allowed to skate below the surface while they encourage business to push taxes onto citizens.
4
These big box stores came in and mainstreet became a ghost town. All those small businesses that went dark were paying taxes. Now, the winners want to pay less. It really was a bargain with the devil to let them come into town. Cheaper at first but more costly once the community of retailers shrunk. Let the retailers with the advantage of scale pay for the harm this scale does to communities. The greatest harm these stores can do is when they decide to pull out of the area they have decimated.
123
@Colbert
In my area the small biz are losing to Amazon, Chewy, Stitch Fix and the like because they won’t offer evening & early weekend hours, won’t deliver, won’t reliably fill special orders and the owner/operators act pained and put-upon.
I hate Walmart but they aren’t the only reason Main Street is drying up.
11
The value of the property could be what the full insurance value for replacement would be. That would include building, land, and interior.
Just a thought. If the company self insures take the value of the last constructed property they put up. Just a thought.
24
Time to start boycotting these businesses that want all of the benefits and none of the responsibilities of being a "corporate citizen."
219
@Allison
Unfortunately, that is a luxury not all consumers have. Imagine you're a single parent with limited time and money and you have some shopping to do. You can either go to one big box store and get all your shopping done, or you can go to three different locally owned stores and likely pay slightly higher prices at each than you would at the big box store. Which option are you likely to choose on a regular basis?
Voting with your wallet is a powerful tactic, but the entire onus for keeping coporate abuses in check can not lay with the consumer.
8
@Alex Only one of those stores should be boycotted by everyone. The people will not be inconvenienced if the rest remain intact.
So I picked a name at random. Let us target Target.
All in? Spread the word on social media. Target Target.
2
It is not just the retailers. In Washington State the oil refineries employ this same tactics. They compare their property tax rate here to that in Texas. They constantly barrage our elected officials at virtually every meeting to reduce their regulations and/or tax burden. Attending a county council meeting here, one would think oil refineries are the only important industry we have - never mind that they are not even the top employer. They relentlessly send staff or contractors to meetings telling elected officials how much they contribute to local charities. Never once have I heard our biggest and most essential employers - like our health care industry- send in staff touting the important work they do in our community or employees saying how they contribute to charities.
11
To the residents: Shop online or elsewhere.
To the retailers: See above.
37
@Tom Q
Like Bezos doesn't argue for low valuations on his warehouses?
3