AUGUSTA, Maine — The Maine Center for Economic Policy (MECEP) applauds Governor Mills and legislative leaders for standing up for Maine small businesses and homeowners by enacting a bill that prevents big box retailers from using a tax scheme called ‘dark store theory’ to dramatically reduce their property valuations. The bill became law without the Governor’s signature after being enacted by the legislature on April 12.
LD 1129, An Act Relating to the Valuation of Retail Sales Facilities amends the rules of assessment to make it clear that retail properties should be assessed the same as other open retail facilities, and not as abandoned, economically unviable property as supported by dark store theory. This new law will protect municipal budgets and prevent large retailers from shifting costs to homeowners and smaller businesses.
“Large corporations are taking their newly built properties and comparing their value to closed down and abandoned stores,” said bill sponsor Representative Ann Matlack. “This puts hundreds of thousands of property tax dollars at stake. These big box stores want the benefits of municipal services, such as police and fire protection, sewer and water services and well-maintained roads, while shifting their share of the cost onto the rest of the property tax payers. This law ensures that local assessors have the tools they need to support their determination of just value for these properties.”
“This is a matter of fairness,” said Sarah Austin, MECEP director of policy and research. “The services, infrastructure, and amenities funded by property taxes increase our quality of life and help businesses succeed. But large, multi-national big-box retailers increasingly turn to dark store theory to get out of paying what they should. When they get away with it, small businesses and homeowners are forced to pay more to make up the difference. This new law will help ensure that big-box retailers pay what they owe and protect Maine small businesses and homeowners.”
A 2019 report published by MECEP surveyed the 25 Maine towns with the highest retail sales and found 17 had box store appeals of their property tax valuations and that companies were requesting valuations to be reduced by 34 percent on average.
Click here for updated summary on the status of box store assessment appeals filed since the 2019 report. The state budget package funds two positions on the Maine State Board of Property Tax Review to help clear the long backlog of pending cases of box store appeals.