Email this article Dark Store Theory: Examining the Tax Loophole's Relevance in Wisconsin from Multiple Perspectives
Abstract
Originally encouraged through legislative reformation during the 1950s, big-box retailers play a major role in the United States’ economy. Built to thrive in the suburbs, they were welcomed by municipalities and property owners who believed that the increased sales taxes that the stores would generate would, in turn, lead to increased tax revenues and lower property taxes. Municipalities and residential property owners are now pushing for legislative action to close a tax loophole that was ostensibly allowed through recent tax reform. However, there is a substantial amount of confusion over the legitimacy of the loophole, as analysts have opposing viewpoints. This research examines the relationship between the presence of big-box retailers and the property tax levies of local municipalities in Wisconsin. It then investigates the phenomenon known as the dark store loophole and analyzes the opposing perspectives held by specialists within the industry. It also considers the overall impact of the loophole on residential property owners. This research finds that imposing legislation to close the dark store loophole would enable local governments to lower residential property taxes.
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