When the powerful corporations that run America’s biggest retailers showed interest in Maine, communities across the state bent over backwards to bring them here, offering tax breaks and other incentives that made these companies wealthy. even richer.
No wonder companies now think they can walk on it.
Across Maine in recent years, the big box stores that now dominate retail have worked aggressively to shift their tax burden onto residents, using questionable legal theory and well-funded attorneys to put the Communities in an unwinnable position: they can either fight the corporations, at great cost to taxpayers, or they can acquiesce and lose property tax revenue that must be compensated by others.
Maine communities will never be equal to the resources of Walmart and others like it. But a bill before the legislature would at least give them a better standing in the fight.
DL 1129, from Rep. Anne Matlack, D-St. George, would clarify that communities can use comparable properties that are truly comparable when assessing the value of a commercial property. It would explicitly say that businesses can’t use failed or abandoned stores to lower their ratings, forcing everyone in town to make up the difference.
This practice is called the The “black store” theoryand it is used across the country as a strategy to reduce property assessments.
Since 2015, major Maine retailers have reduced their assessments by more than $16 million combined using this strategy, costing cities and towns hundreds of thousands of dollars in tax revenue, according to a report from Maine Monitoring. Hundreds of millions more in property value appeals await trial.
A 2019 report by Sarah Austin of the Maine Center for Economic Policy, on the left, found that 17 of the 25 communities with the highest retail sales had appeals, with reduction requests representing an average reduction of 34%. Since then, others have been filed, including four at Augusta alone, with Walmart, Sam’s Club, Home Depot and Lowe’s all seeking tax relief.
The argument made by the corporations is just another example of the power they unfairly wield in small communities across the country. They get tax breaks and other deals to build their stores, often using deed restrictions to prevent the building from being used by a competitor in the future. Companies then use these restrictions to argue that the value should be lower.
They also argue that vacant stores should be used as comparable properties for valuation purposes, even when those stores were closed by the company not because they failed, but because the company wanted to build another store. later.
In both cases, retailers use their power to make their buildings appear less valuable, then use that as evidence to reduce their own tax burden, even when their stores are full and highly profitable.
In both cases, this goes against good rater practice. But communities still have to fight the companies and their lawyers.
Companies are winning some of these fights and losing others.
Either way, it harms local communities, who, even if they win a case, must continue to fight them, year after year, at great expense.
They shouldn’t have to, and residents who pay their fair share of property taxes shouldn’t have to foot the big business bill either.