The dark store issue is going to loom even larger as 2018 goes on, given that both Bon-Ton along with Toys R'Us are going out of business. That means a lot of places in Wisconsin will have empty stores that other businesses can use to try to lower their taxes for this Winter.
Steve Walters of Wispolitics is the latest to take on the dark store loophole in Urban Milwaukee, and Walters spoke with heavy hitters on both sides of the issue as part of his article.
That also worries Jerry Deschane, executive director of the League of Wisconsin Municipalities. “One of our greatest concerns is that enterprising tax lawyers have started trying to expand the dark store argument to dark banks and even dark fast food,” Deschane said, adding:What Millis isn’t telling people is that while corporations are seeing their land values go up and their profits go up in the Age of Fitzwalkerstan, they were barely paying any more in corporate income taxes in Fiscal year 2017 than they were in 2011, and were actually paying less than they were 4 years prior.
“So far they’ve been unsuccessful but there are big dollars involved… Dark store and Walgreens loopholes are already on track to shift their taxes to others and pushing residential and small business taxes up by 8 percent statewide. If we start to see more dark business tax breaks, that increase will be even higher."
But Don Millis, the veteran attorney who successfully lobbied against the dark store bill on behalf of Wisconsin Manufacturers & Commerce, said Ringhand and Deschane want to change what has “been the law in Wisconsin for nearly a century.”
In a 1922 ruling, the state Supreme Court “held that the proper measure of value of a property is what it would sell to another – not what it is worth to the current occupant, not necessarily what it cost to construct and not considering the current owner as a potential buyer,” Millis said.
Millis made one more point: Commercial and manufacturing assessments increased as a share of property values statewide from 20.7 percent in 2008 to 22.8 percent in 2017. In that same period, residential property values fell from 73.8 percent of property values statewide to 72 percent.
That decline flies in the face of US corporate profits recovering throughout 2016 and much of 2017.
Note that the Manufacturers and Agriculture tax credit was, aka "The Big Giveaway", was phasing in throughout this time, maxing out in 2017. Now add in the significant cut in corporate income taxes in the recent tax bill from DC (which helps explain that drop in Q4 2017 profits), and it sure seems like the corporates are coming out a lot better than individuals are in Wisconsin these days.
In addition, corporate taxes dropped as a part of a percentage of overall taxes paid in Wisconsin, while individual income taxes have taken up a larger share over the same time period.
Tax categories as % of total revenues, 2015 vs 2017
Individual income tax 50.4%
Corporate income tax 6.9%
Individual income tax 51.8% (+1.4%)
Corporate income tax 5.9% (-1.0%)
So corporate Wisconsin isn’t coming close to paying their share in income taxes, either at the state and federal level, and now they want to avoid paying their share in property taxes due to this dark store loophole? There really isn't a "too much" with these lowlifes, is there. And it makes me wonder when our citizenry says "We've had enough."