House, Senate Bills Would End ‘Dark Stores’ Assessment Loophole that Hurts Cities, Residents

League Statement


Matt Bach
Director of Communications
Michigan Municipal League
(734) 669-6317; C: (810) 874-1073
[email protected];


House, Senate Bills Would End ‘Dark Stores’ Assessment Loophole that Hurts Cities, Residents

LANSING, Mich. ― Reflecting the urgency of the issue, some of the first bills introduced in the 2019-20 legislative session would reform Michigan’s property tax system to ensure fair and equitable treatment of property values.

The bills – House Bill 4025 and 4047 and Senate Bill 26 and 39 – are sponsored by Republicans and Democrats. They would end the practice often used by so-called “big box” retailers, such as Target and Menards, that result in the stores being assessed not on the basis of their construction cost or their comparable value to similar stores, but on the basis of the store being empty, blighted, or special restrictions on the future use of the store placed in deeds by the store owners.

“These large companies are evading their responsibility for local property taxes – and that means cuts in police, fire and other services or tax increases imposed on local residents and other businesses,” said Chris Hackbarth, director of state and federal affairs for the Michigan Municipal League. “Millions of tax dollars are at stake. Similar legislation has moved through the House in the past, but not reached the governor’s desk. We are hopeful that both chambers will address this issue quickly and Gov. Gretchen Whitmer will support fair assessment processes by signing one of these bills.”

Currently, North Carolina-based Lowe’s sees its stores in its home state assessed at $79.08 per square foot, but only $22.10 per square foot on average in Michigan. Menards stores are assessed in its headquarter state of Wisconsin at $61.23 per square foot, but only $24.97 per square foot on average in Michigan.

SB 26 and 39 were introduced by Sen. Ed McBroom, R-Vulcan. HB 4025 was introduced by Rep. Beau LaFave, R-Iron Mountain. HB 4047 was sponsored by Rep. Julie Brixie, D-Okemos. The House bills bi-partisan co-sponsors from around the state.

The legislation would end the “dark stores” tactics by requiring the Michigan Tax Tribunal to consider all of the nationally accepted valuation approaches (sales, cost and income) to determine the “highest and best use” of a property for purposes of assigning value.

The Michigan Supreme Court in 2017 refused to overturn a Michigan Court of Appeals ruling (Menard Inc. vs. City of Escanaba) that the dark stores tactic was illegal. In that case, the city set the property’s value at $8 million; Menard said the store was worth $3.3 million. The Michigan Tax Tribunal accepted Menard’s assessment. The Appeals Court, in rejecting the Tax Tribunals’ decision, set down new requirements for the tribunal to address.

These new bills would establish clear guidelines for the tribunal to use when considering tax appeals and will ensure cities and their residents get treatment in the assessment process.

For additional information, contact the League’s Matt Bach, director of communications, at (810) 874-1073 (cell); (734) 669-6317 (office) and [email protected].

About the League: Michigan Municipal League is dedicated to making Michigan’s communities better by thoughtfully innovating programs, energetically connecting ideas and people, actively serving members with resources and services, and passionately inspiring positive change for Michigan’s greatest centers of potential: its communities. The League advocates on behalf of its member communities in Lansing, Washington, D.C., and the courts; provides educational opportunities for elected and appointed municipal officials; and assists municipal leaders in administering services to their communities through League programs and services. Learn more at


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