Large retailers, such as Lowe’s and Home Depot, have created a lot of controversy in Lansing, Michigan for exploiting property tax “loopholes”. Due to ambiguity in the statutory language, the Michigan Tax Tribunal ruled in favor of the big box stores’ appeals, which significantly reduced their property tax assessments.
According to The Daily News, these corporations are being taxed at the value they would have if the store was out of business and the building was shuttered and vacant. Because the values are at their “abandonment worth,” it has caused major economic problems for local governments, especially in education funding. In Marquette Township, property taxes saw an approximately 63 percent reduction from what they were originally.
The rulings in recent hearings put the entire state at risk since many other local units of governments must also lower their assessments on big box stores, as they can’t afford to litigate against major corporations. However, State Rep. John Kivela (D-Marquette) and State Sen. Tom Casperson (R-Escanaba) have announced bills to amend the controversial property tax law. The bills will tighten the laws to ensure corporations can no longer take advantage of loopholes and receive special tax treatment. Kivela and Casperson are working to ensure the amendments will provide clear guidelines to adjust the way tax assessments are completed on large commercial properties.
For the full story from The Daily News, click here.