HOUGHTON, MI— Houghton officials are trying to preserve city services by fighting Walmart’s attempt to lower its property taxes.
The retailer has asked the Michigan Tax Tribunal to reduce its tax rate, citing the “dark store theory.” It states the value of commercial properties should be based on the sale of comparable properties that are shuttered. Walmart wants a 60-percent reduction in its property taxes and wants to be reimbursed for what it says is six years’ worth of tax overpayment.
Houghton City Manager Eric Waara says that amounts to more than $1 million. He says if the tax tribunal agrees with Walmart, it would severely impact city services.
“We’re talking about devastating cuts to our schools, our veterans, our elderly, our library, and the ability for the city to deliver services—plowing the roads, fixing the streets.”
He says Walmart is taking advantage of a scheme used by many large retailers in the state.
“They’re trying to get their taxes reduced by 60 percent just using an arcane legal loophole, which I’m hoping someday the state will see fit to close.”
Waara notes the city has filed a suit against Walmart in federal court, saying the retailer is in breach of a contract signed in the 2000s when it expanded into a supercenter. City officials agreed to accommodate the expansion and Walmart agreed to increase the taxable value of the store by about $1.9 million. Houghton officials believe the tax tribunal appeal is a violation of that contract.
Waara says it’s hard to believe such a huge retailer is fighting against a town of only 8,000 people.
“One of the most successful companies ever is seeking to lower their property taxes on a small community which bent over backwards to welcome them into this community to do business.”
