Monday, July 15, 2019

Walmart sues to lower its Oshkosh property tax bill

Oshkosh Examiner photo

The Oshkosh Walmart is valued by the city at $16.6 million, but the company says it's worth only $10.4 million.

By Miles Maguire
Renewing its legal battle with the city of Oshkosh, Walmart filed suit July 3 to have $6.2 million knocked off the assessment on its South Washburn Street store.

The company sits atop the Fortune 500 and had $500 billion in sales last year. But like other major retailers, it believes that its stores are worth much less than local real estate assessors have determined.

Two other “big box” retailers, Lowe’s and Menards, have already won significant rebates from the city on the grounds that their buildings were overassessed.

City officials argue that the retail chains are taking unfair advantage of the assessment process and pushing their share of the tax burden off to small businesses and residential property owners. A bill to amend state law to address these concerns was introduced in March and referred to committees in the assembly and senate.

The controversy is frequently described as the “dark store” issue because retailers have argued that their stores are so specifically designed that they would have a very low value to other users. Under this theory, even a big-box location that is thriving should be compared to vacant stores to come up with its assessment value.

“The dark store legislation addresses two property tax loopholes that have enabled certain commercial properties to demand, and receive, significant property tax reductions,” according to a statement from the League of Wisconsin Municipalities.

The first one allows the use of vacant stores as comparable sites to determine value. “The second loophole is based on the 2008 Wisconsin Supreme Court Walgreens decision, which prevents an assessor from considering actual contract rent in determining the value of certain types of retail income property,” the league said.

Oshkosh legislators Gordon Hintz, a Democrat, and Michael Schraa, a Republican who also owns Leon’s Frozen Custard on Murdock Avenue, have both signed on as cosponsors.

Sen. Dan Feyen, a Republican whose district includes Oshkosh, voted earlier this year to keep the bill from moving out of committee. In an email a staffer defended Feyen’s vote, saying that the bill would have gone to the floor of the senate without a public hearing.

“It is extremely unusual to bring a bill to the floor that has not received a public hearing in either house,” the email said. “This is why Sen. Feyen voted against bringing the bill to the floor.” The staffer did not respond to a followup request for clarification on whether Feyen supports the dark store changes.

Lynn Lorenson, Oshkosh city attorney, said the city has been in negotiations since last year with Walmart about its assessment.


The new lawsuit appears to be an extension of a case filed last year, which according to court documents has been put on hold while the two sides attempt to negotiate a settlement. Lorenson said the two sides have been exchanging information to bolster their arguments.

In one way the new case suggests that the city and the retail chain are moving closer to agreement. This year Walmart is arguing for a new assessment of “no more than $10.4 million.” Last year it said the site was worth “no more than $8.5 million.”

Walmart did not respond to a request for comment.

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