MADISON – Wisconsin Manufacturers & Commerce (WMC) urged lawmakers on Tuesday to oppose newly released legislation that aims to close the non-existent “dark stores loophole.” The legislation – introduced by Rep. Rob Brooks and Sen. Duey Stroebel – would do nothing more than raise taxes on main-street retailers, local manufacturers and small businesses.
“Support for this legislation is support for higher property taxes,” said WMC Director of Tax, Transportation & Legal Affairs Cory Fish.
Some key points about the legislation being circulated as LRB-1665:
- There is no loophole. Local governments argue that the so-called “dark stores loophole” allows businesses to lower their property tax assessment by comparing newly constructed occupied properties with vacant dilapidated properties. This is a myth because this type of comparison is already illegal. Advocates of the legislation are looking to tax business value. They argue occupancy (i.e. business value) makes a property worth more and that value should be taxed.
- There is no tax shift to homeowners. The shift has actually gone in the opposite direction. Over the last decade, commercial and manufacturing property owners in Wisconsin have seen over a two percent increase in their share of the property tax burden statewide, while homeowners have seen a reduction.
- This bill will double tax businesses. The property tax is meant to tax real property – the land and building – not income. However, this bill would transform Wisconsin’s property taxation system into a local income tax because it will allow business value and intangible assets like financing agreements to be taxed through the property tax in addition to the fair market value of the land and building.
“We urge lawmakers to consider the costly impacts this legislation will have on each of their districts,” added Fish. “While proponents claim there is a loophole that needs to be closed, the fact of the matter is that overly aggressive assessors are simply looking for ways to tax to the max and raise the cost to do business in Wisconsin.”
Since so many myths have been promoted on this issue, WMC recently released its “Myth vs. Fact” data sheet, which can be seen by clicking here. Legislators and the public should learn the true impact of this legislation before signing on in support.