(MPRN-Lansing) The city of Escanaba is taking on big box stores in the Michigan Supreme Court. The city says the home improvement store Menards is dodging taxes.
It’s called the “dark store” loophole, and it’s been used more often in recent years by the Michigan Tax Tribunal when assessing property taxes. It determines property taxes for fully-functioning retailers like Target and Wal-Mart based on nearby empty stores.
Jack Van Coevering is the attorney for the city of Escanaba – which is going up against the home improvement chain Menards. He said the city wants the big box stores to be taxed like other stores.
“Fundamentally there’s a fairness issue that local retailers are being taxed at a much, much higher per-square-foot value than these big box stores,” he said.
The strategy not only gives incentive to retailers to keep vacant stores, it also cuts into the pockets of local governments, Van Coevering said, particularly in more rural areas.
“It has significant impact to other UP communities that have a tax base that is largely somewhat small because huge tracks of land are federally owned or state owned and can’t be taxed,” he said. “For a lot of local units this is the difference between a library being open on Saturday.”