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wasoxygen  ·  149 days ago  ·  link  ·    ·  parent  ·  post: Cory Doctorow: Big Box stores' other shoe drops

Fair point.

So Lowe's is paying tax to the state.

Doctorow alleges that "National chains pay little or no federal income tax" and, with the typical laziness of #anticorporatebigotry jounalism, provides no evidence. "Lowe's annual income taxes for 2021 were $1.904B, a 41.88% increase from 2020."

So that's federal. What about local?

Lowe's does not set the local tax rate. The tax rate is set by Marquette Township, and property valuations are determined by a public assessor.

Property owners can ask the Michigan Tax Tribunal to review an assessment following an established procedure. A review board can also correct assessments which were incorrectly set too low.

I don't see anything wrong with Lowe's hiring people ("corrupt tax-experts"!) to look for grounds to ask for a lower assessment. When I file my taxes, I look for legal ways to reduce the amount owed. Sometimes, like with the mortgage interest deduction, it seems strange that I am getting a break now but not when I was a renter. But I don't make the rules.

Most property tax revenue comes from residential housing. Homeowners don't especially profit from sleeping indoors, but it is typical that they build equity and hope to eventually sell the house at a profit. So True Cash Value of the structure is the basis for assessments, and it is irrelevant whether a commercial property is making a profit.

    Instead of opting for the usual assessment formula (building costs minus depreciation), they demand assessment based on the sale price of "comparable" properties. Then, they argue that the relevant "comparable" properties are shuttered, abandoned big box stores.

Doctorow is outraged that this strategy works, but I am not clear what he believes should happen. "Building costs minus depreciation" is not the standard that applies, and Lowe's is demanding that the assessment follow the rules as they are written. Doctorow seems to accept that big box stores are so customized to the retailer (along with deed restrictions, similar to those that require a house to be part of an HOA) that the buildings have very low resale value. What comps should the assessor consider, if not similar big box structures that have been put up for sale after closing for business?

"Marquette Township Supervisor Lyn Durant said one of the most frustrating things to municipalities is that assessors are following applicable state law in their valuations of all properties."

Perhaps they should update the rules, as other jurisdictions are doing. That story doesn't make much of a headline, though.

Like Spears on a Plane, like phosphorus, if you paint a corporation as evil and greedy, with regular people as the victims, the readers will lap it up.

What happens if Marquette updates the rule and Lowe's has to start paying more property tax? Is Mr. Lowe going to dig into his deep pockets? Not likely, Lucius Smith Lowe died in 1940. The corporation will remit the payments, but the burden will fall on the customers. All the revenue Lowe's uses to cover expenses comes from customers.

“The problem with the big stores dropping their taxable value is that the burden falls to the resident to have them pay everything,” Durant said. But the burden is already on the residents to pay for their library.

These breathless articles are always casual with the facts. The source, published in June 2015, opened with a tear-jerker:

    In February, the library in Marquette, Mich., announced that it was cutting its hours.

Lowe's was immediately blamed for the budget crunch, with the "new method that big-box stores are using to game the tax system".

But the library released the statement Why the Library is suddently closing on Sundays on February 18 (and conspicuously linked to it from the home page) which put most of the blame on a property reassessment granted to Marquette General Hospital. Is a hospital (even one recently acquired by for-profit Duke LifePoint) not sufficiently corporate to raise reader ire?

The typical Hubski user probably gives more than half their income to corporations, by choice, in return for incredible bounty. It's just as silly to love them as to hate them, but the hate is, in my view, strikingly misplaced.