What is the Dark Store Loophole?

The Dark Store Loophole is a tax break trick that commercial and manufacturing property owners use to save themselves from paying their fair share of property taxes.

Tax attorneys for big box stores use the Dark Store Loophole to argue that the value of a new store in a busy, popular area should be based on the value of empty stores.

If a big box retailer uses the Dark Store Loophole to cut the amount they pay in property taxes, then residents have to pay the difference in order to maintain current city services.

Resources and Examples

• NY Times: As Big Retailers Seek to Cut Their Tax Bills, Towns Bear the Brunt
• League of Wisconsin Municipalities: Issue Briefing on Dark Store
• Milwaukee Journal Sentinel: Dark store appeals on the rise in Wisconsin
• Wisconsin Policy Forum: Are Dark Store Property Tax Challenges on the Rise?
• Whiteboard video: Close the Dark Store Loopholes
• Tosa Connection Article by Mayor Ehley
• CityLab: Prepare for the Property Tax Meltdown
• CityLab: It Might Be Lights Out for Wisconsin’s ‘Dark Store’ Tax Loophole

What does this mean for my taxes?

If this loophole is not fixed, the tax burden shifts to homeowners. Research by the League of Wisconsin Municipalities shows Milwaukee County communities like Wauwatosa could see homeowners' property tax increase by 7 percent.

What can I do to oppose paying more taxes?

Contact your state legislators to tell them to close the Dark Store Loophole.

Suggested Copy:

"I am writing to ask you to close loopholes in Property Tax Law ("Dark Store Loophole") which allows buildings with active businesses to be assessed at the same value as a similarly-sized vacant building, seriously reducing their property taxes.

This assessment allows retailers to reduce their property taxes by millions of dollars and shifts the property tax burden onto small businesses and homeowners.

Please protect taxpayers and the State of Wisconsin by taking action."