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Panel wants property assessment loopholes closed

Homeowners in Wisconsin already pay 70 percent of property taxes statewide.

And Douglas County want to make sure that share doesn't grow.

But a loophole in Wisconsin law is helping big box and chain stores use tax avoidance strategies that shift the burden to homeowners and small businesses.

The "dark store" loophole is a strategy in which retail giants challenge their property assessments, and get those assessments reduced based on the value of abandoned stores, in some cases gaining dramatic reductions in the property taxes they pay.

The result is shifting the burden of those taxes to homeowners and small businesses in the community.

Douglas County's Administration Committee adopted a resolution urging the governor and legislators to close the loophole to protect homeowners and main street businesses from an even heavier property tax burden.

The resolution calls on the Legislature to adopt legislation that clarifies that leases are appropriately factored into the valuation of leased properties and ensuring that when comparable sales valuations are used that only those sales within a market segment exhibiting similar "highest and best use" are used in making comparisons rather than making comparisons to abandoned properties of similar size.

A bill was introduced in the Wisconsin Legislature by a bipartisan coalition of legislators including Sen. Janet Bewley, D-Delta, last year that would have addressed single-tenant commercial leases, such as those used by CVS and Walgreens, to argue the value of their property is not what it appears. The bill failed in the Senate in March. A companion Assembly bill received a public hearing but went no further when the Senate voted earlier this year.

Walgreens and CVS have won dramatic assessment reductions across the state since 2008 by arguing that the rent they pay for their newly-constructed, highly-visible corner locations doesn't accurately reflect the fair market value for property tax purposes, according to the League of Wisconsin Municipalities.

"My thing with this is it has a lot of company names in it here like Walgreens and CVS," Administration Committee Chairman Alan Jaques said. "I'm not inclined to like when you put in names like that. If it was one of my businesses or if I was a shareholder, I would be a little offended by that."

Jaques said he didn't want the county to be sued because names were included in a resolution.

"I think you're right," County Board Chairman Mark Liebaert said. "When I saw it, I thought 'jeez, we don't have all these stores.' If I was dealing with a store on the issue, I think they would be mad."

The committee approved amending the resolution to remove the names of specific big box and chain stores, and use another term to describe them.

"Just call them big box," Committee member Doug Finn said.

The full County Board will consider the resolution when it meets at 6 p.m. Oct. 18 before it is passed on to the governor and Legislature.

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