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“Dark stores” case makes its way to the Michigan Supreme Court

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The city of Escanaba is taking on big box stores in the Michigan Supreme Court. The city says the home improvement store Menards  is dodging taxes.

It’s called the “dark store” loophole, and it’s been used more often in recent years. It determines property taxes for fully-functioning retailers like Target and Wal-Mart based on nearby empty stores.

Jack Van Coevering  is the attorney for the city of Escanaba – which is going up against the home improvement chain Menards. He says the city wants the big box stores to be taxed like other stores.

“Fundamentally there’s a fairness issue that local retailers are being taxed at a much, much higher per-square-foot value than these big box stores.”  

Local governments argue this tax method deprives them of precious revenue, especially in rural areas without a lot of taxable land.