Walmart has sued the City of Rice Lake for the third time in as many years over the property valuation of the Arkansas based company’s West Avenue location.
The most recent suit was filed Aug. 1 in Barron County Circuit Court and, like the previous two, claims a property valuation of $13.5 million is excessive and leads to Walmart paying more property tax than is legal.
Walmart’s first legal filing in 2017 claimed the valuation should be $9.1 million.
Its 2018 filing claimed the valuation should be $8.1 million.
Its 2019 filing claims the valuation is “no more than $5,500,000.”
The City’s valuation increased by $50,000 between 2016 and 2018.
Walmart also claims the store is entitled to a refund of any taxes paid over its valuation claims, plus statutory interest.
Lights out, value down
In the filing, Walmart claims the City’s assessment was not uniform with the assessment of other properties in the City and state, which violates the Wisconsin Constitution’s uniform taxation requirements.
Other properties refers to vacant retail buildings, of which Rice Lake has multiple to choose from.
Known as the dark store theory, companies claim that occupied stores should be given property tax assessments equivalent to vacant stores in the area.
Rice Lake’s empty store portfolio increased when Shopko closed in June. With no one buying these stores, their value has gone down.
Walmart may be using this line of thought to fuel its claim of the property devaluing by $3.6 million in 2 years.
The Wisconsin League of Municipalities argues the dark store theory will lead to shift in the tax burden from commercial property owners to homeowners and others.
City tax rolls state the Walmart store’s property tax was about $320,000 in both 2016 and 2017.
Walmart is not the only retailer that has challenged the City over property taxation.
Farm and Fleet sued the City over property valuation in 2011 and reached a settlement, and Menard’s—the third highest City property tax payer in 2017—settled its dark store challenge in November of 2017 and was repaid nearly $60,000 for taxes.
Dark store challenges have been on the rise in the state.
A USA Today’s Wisconsin network analysis revealed more than 100 property tax challenges were filed against local governments between 2014 and 2017.
A 2017 Wisconsin Policy Forum survey found that 79 Wisconsin communities currently were in litigation over tax appeals they classified as dark store cases. Sixty-three communities reported appeals in 2016 and 66 in 2015.
State legislation designed to end these challenges failed in 2017 but another bill was introduced during the current legislative session.
The bill would not allow active property to be compared to dark property for property tax assessments.
Rep. Romaine Quinn and Sen. Janet Bewley sponsored the bill along with over 50 other legislators.