WMC Testifies in Opposition to So-Called “Dark Store” Legislation

 

MADISON – WMC Senior Vice President of Government Relations Scott Manley and Senior Director of Government Relations Jason Culotta testified on Thursday in opposition to AB 386 and AB 387 at a hearing of the Assembly Ways and Means Committee. The two bills aim to solve the so-called “dark store loophole,” but in reality would just make it easier for aggressive assessors to raise property taxes on businesses.

Some assessors around the state have already tried to increase the value of property by as much as 500 percent in an effort to raise taxes. However, the courts have been on the side of property taxpayers and have overturned many of these unwarranted increases.

AB 386 and 387 would fly in the face of current law, overruling what the courts have said. This could dramatically increase the cost to do business in Wisconsin, but it could also have unintended consequences for all property owners.

WMC pointed out the legislation is essentially a backdoor for municipalities to implement a local income tax.

“AB 387 seeks to tax business income through the property tax by the inclusion of above-market leases in the value of the property, which the courts have consistently ruled cannot be done,” explained Culotta. “Wisconsin already has some of the highest property and income taxes in the country. It’s disappointing and frustrating that lawmakers seek to worsen this crushing burden for businesses by allowing local governments to tax lease income through the property tax. “

Additionally, this legislation mirrors attempts by liberal policymakers in previous sessions.

“These bills mark the latest iteration of a decade-long effort by some municipal assessors to extract higher property tax collections from commercial properties by new assessment practices that have been found unlawful by the courts,” said Manley. “Similar legislation was proposed by Democratic Sen. Bob Jauch in the 2009-11 state budget, but Gov. Jim Doyle – who signed the largest business tax increase in Wisconsin’s history – had the good sense to veto this misguided idea.”

WMC will keep encouraging legislators to oppose this legislation moving forward to ensure Wisconsin’s employers do not face unwarranted, massive property tax increases.

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For more information, contact:
Nick Novak, 608.258.3400