When the powerful corporations that run America’s biggest retailers took interest in Maine, communities around the state bent over backwards to get them here, offering tax breaks and other incentives that made these rich companies even richer.
No wonder the corporations now think they can walk all over them.
Throughout Maine over the last several years, the big-box stores that now dominate retail have been aggressively working to shift their tax burden over to residents, using a dubious legal theory and well-funded lawyers to put communities in an unwinnable situation: They can either fight the companies, at great taxpayer cost, or they can acquiesce, and lose property tax revenue that must be made up by others.
Maine communities will never be on equal footing against the resources of Walmart and others like it. But a bill before the Legislature would at least give them better standing in the fight.
L.D. 1129, from Rep. Anne Matlack, D-St. George, would make it clear that communities can use comparable properties that are actually comparable when assessing the value of retail property. It would say explicitly that companies can’t use stores that have failed or been abandoned to lower their assessments, forcing everyone else in town to make up the difference.
That practice is called the “dark store” theory, and it’s being used around the country as a strategy for lowering property tax assessments.
Since 2015, large retailers in Maine have lowered their valuations 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 the Maine Monitory. Hundreds of millions of dollars more in property value appeals are waiting to be adjudicated.
A 2019 report from Sarah Austin of the left-leaning Maine Center for Economic Policy found that 17 of the 25 communities with the highest retail sales had been the target of appeals, with requests for abatements averaging a 34% reduction. Since then, more have been filed, including four in Augusta alone, with Walmart, Sam’s Club, Home Depot and Lowe’s all seeking tax breaks.
The argument made by the companies is just another example of the power they unfairly wield in small communities throughout the country. They secure tax breaks and other deals to build their stores, often using deed restrictions to keep the building from being used by a competitor in the future. The companies then use those 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 corporation wanted to build another store down the road.
In both cases, the retailers use their power to make their buildings seem less valuable, then use that as evidence to lower their own property tax burden, even when their stores are full and very profitable.
In both cases, it goes against the best practices of tax assessors. But communities still have to fight the corporations and their lawyers.
The corporations win some of these fights, and they lose some.
Either way, it hurts local communities, who even if they win one case have to keep fighting 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 pick up the bill for big corporations, either.
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