Hard choices in Marquette Township over tax valuation
Marquette and Breitung townships are teaming up in a Michigan Court of Appeals challenge to recent state tax tribunal decisions which will cost those communities thousands of dollars each year in lost property tax revenue.
The dispute involves how valuations of the true cash value of “big box” retail stores are determined.
Last year, the Michigan Tax Tribunal ruled against both of the townships, determining the Lowe’s Home Improvement Warehouse in Marquette Township and a Home Depot near Iron Mountain needed to be evaluated in comparison to vacant “dark stores,” although both stores were operating businesses.
The decision -which was based on comparisons of “dark stores” located in southeast Michigan- determined the stores could only be sold or leased for some secondary purpose at a deeply discounted price and resulted in the townships refunding thousands of dollars in tax revenue to the retail stores and reduced the taxable value of those businesses into the future.
The tribunal has used the same rationale in several similar cases, with a good number of additional appeals in process or expected over the next several months.
Marquette Township officials decided to take the case to the appellate court to try to preserve more than a half-million dollars in tax revenue the community stands to lose if all the big box stores in the township followed Lowe’s successfully through the tax tribunal in appealing their property tax assessments.
Across Michigan, the issue is being looked at closely by business leaders, government officials and state lawmakers. The outcome of the court of appeals challenge is expected to be far-reaching.
We understand why Marquette and Breitung townships had to take up this challenge by filing the case in the appellate court. The “dark stores” comparisons -if adopted on a widescale basis- would leave residents in communities across the state looking at local governments cutting vital services or seeking millage to compensate for the lost tax revenue. These are deep cuts that the communities would have great difficulty coping with and still be able to provide the same level of services.
The determination of Marquette and Breitung townships -at substantial legal cost- to not simply stipulate to the tribunal’s rulings and suffer the dramatic cuts will lead to a court ruling likely affecting communities across Michigan and perhaps farther.
Marquette Township has done an outstanding good job being proactive in bringing in new businesses, which is why they have experienced substantial growth in recent years. We don’t blame the townships for looking to the courts for a legal solution on this issue, so they have a better idea what level of tax revenue they can expect, going forward. It is difficult to develop a viable, workable budget if the revenue level isn’t known.