By ASHLEY WEIGEL
Capital News Service
LANSING — The battle against a property tax advantage for big box retailers has been taken to the Michigan Court of Appeals.
Large retailers such as Meijer, Target and Best Buy can appeal to the Michigan Tax Tribunal to have their properties assessed at the “true cash value” which usually results in lower property taxes. The communities with big box stores lose tax revenue.
“True cash value” is defined by the tax tribunal as the “fair market value or the usual selling price of property.”
Tax tribunal decsions in favor of a Home Depot in Breitung Township and a Lowe’s in Marquette Township were recently fought in the Court of Appeals. Attorney Stacy Hissong represented both townships in the appeal.
“The impact of that decision will affect communities where there’s been an appeal,” Hissong said. While there have been many cases of the tax tribunal ruling in favor of the retailers, this was the first appeal of the lowered taxes in the court of appeals.
The tax tribunal does not make it a “practice” to grant reduced assessments, said Peter Kopke, chief clerk of the tribunal. The decisions are based on evidence brought to the judges. He said it is the townships’ right by law to challenge the appeal.
The Michigan Retailers Association supported the original decision of the tax tribunal.
“The townships propose a subjective valuation to real property that would penalize businesses for profitability,” William J. Hallan, the association’s senior vice president and general counsel said in a statement. “Not only do the townships suggest a valuation approach that is unconstitutional, but it lacks uniformity, with the potential to result in an unfair and abusive application.”
Rep. John Kivela, D-Marquette, and Sen. Tom Casperson, R-Escanaba, have introduced bills to limit the retailers’ ability to get around paying higher taxes, but neither bill has moved past its initial committee hearing.
With the loss of tax revenue, money is lost for the community the retailers are located in, said Larry Merrill, executive director for the Michigan Townships Association. The assessed values of the many of the stores are based on what the stores in Detroit are worth, which is virtually nothing, according to Merrill.
The appeal was held on April 8, and Hissong said there could be a decision anywhere from three weeks to three months from the hearing.