Supreme Court’s rejection of ‘Dark Stores’ appeal is recognition of problems in property tax system

Taxes-erased-xThe refusal by the Michigan Supreme Court to accept the appeal of a property tax case by the Big Box retailer Menard’s is recognition of the problems created by the “Dark Stores” theory of property valuation, the Michigan Association of Counties (MAC) said today in reaction to the court’s order.

In May 2016, a unanimous panel of the Michigan Court of Appeals, in Menard, Inc. vs. City of Escanaba, expressly rejected the Tax Tribunal’s reliance on the “Dark Stores” method. Not only did the court find that the Tax Tribunal made a mistake of law, it also found that the tribunal didn’t properly perform its duty in evaluating evidence for determining value.

MAC’s Stephan Currie speaks with Frank Beckmann about Dark Stores issue.

The Supreme Court’s decision means the Court of Appeals ruling stands as precedent and must be followed. That court had ordered the Tax Tribunal to again review the case, taking additional evidence on proper valuation in doing so.

“This is a most promising development,” said Stephan Currie, MAC’s executive director. “The Tax Tribunal has to return to this matter and operate under the orders given by the Court of Appeals to properly assess the value of commercial property.” In this particular case, the tribunal had ruled the Menard property was worth 60 percent less than what Escanaba had determined via standard valuation practices.

MAC was one of several organizations filing amicus briefs in support of the city of Escanaba’s position in the case.

Under the Dark Stores method, the Tax Tribunal has reduced so many valuations of Big Box properties that local revenues to provide public services have been reduced by at least $100 million since 2013. This process is shifting more of the burden onto homeowners to fund the basic public services all Michigan communities and businesses utilize each day.

For more information on MAC, visit www.micounties.org.