When you go to work, do you know what your tax dollars are doing?
While you head off to work today to earn your paycheck, your tax dollars are also at work – against you. Taxpayer-funded lobbyists are spending your tax dollars pushing to loosen property tax caps, the creation of new local taxes and fees, and changes to property tax assessment laws that will result in higher property assessments. In other words, your tax dollars are being spent on lobbyists in Madison to encourage lawmakers to raise your taxes.
One such proposal these taxpayer-funded lobbyists are pushing, the so-called “dark stores” legislation, will increase property taxes on businesses and make Wisconsin a national outlier in both the amount of property tax we charge and the process we use to collect it. Wisconsin already has the fourth-highest state and local tax burden in the nation. This legislation will make it even worse.
The “dark stores” legislation was created after tax assessors tried, and failed, to adopt an illegal property taxation theory to target businesses with tax increases. Businesses challenged these illegal tax increases in court and won.
Now taxpayer-funded lobbyists are trying to get lawmakers to pass legislation to legalize their illegal actions. Local governments are spending millions of taxpayer dollars on campaign ads, PR firms and lobbyists to sell a false narrative about the need to fix a “loophole” that does not exist.
Local governments argue that the so-called “dark stores loophole” allows businesses to lower their property tax assessments by comparing newly constructed, occupied properties with vacant, dilapidated properties. This is a myth because this type of comparison is already illegal. What local governments really want to do is raise your taxes if your property is occupied.
For example, if you had two homes identical in every respect except that one was occupied and one was vacant, the occupied home would be valued (for tax purposes), and taxed, more than the vacant one. No rational buyer would pay more for the occupied home than the vacant one. The idea is absurd on its face. The fair market value of each property would be the same, but this legislation would increase the property taxes on the occupied home.
Local governments also want to tax business loans that help employers expand and create jobs. Tax assessors want to add the value of certain types of financing agreements – loans – to the value of the building and land when determining the amount of property tax you owe.
If this were applied to a residential home – which it could be because of the Wisconsin Constitution’s Uniformity Clause – your local government could hike your property taxes because you took out a mortgage. However, property taxes would not be raised on your neighbor who bought an identical house but had the means to purchase it with cash.
Advocates of the legislation argue raising taxes on businesses is necessary because “big businesses” are shifting their tax burden onto homeowners. This talking point is not based in truth. The Wisconsin Department of Revenue’s own data shows that, over the last 10 years, the statewide property tax burden has shifted from homeowners to businesses by over two percent. Businesses are paying a larger portion of the property tax than they were ten years ago – and homeowners are paying less.
In reality, this legislation would result in tax increases on businesses through no fault of their own. Increasing taxes on a property based on occupancy or based on financing does not reflect economic reality, nor does it accurately reflect the market price that someone would pay for the property.
Higher tax bills are not the kind of change Wisconsin needs. Lawmakers should stand with job creators and the hard working Wisconsinites they employ, not the lobbyists trying to raise their taxes. Our property taxes are already too high, and we don’t need to make a bad situation worse.
Cory Fish is Wisconsin Manufacturers and Commerce’s Director of Tax, Transportation and Legal Affairs.