Tools for Taking On the Corporate Subsidy Machine: Eliminate the ‘Dark Store Theory’ Loophole
Big box stores such as Walmart, Target, and Lowe’s have used a legal loophole known as “dark store theory” to lower their property tax bill by hundreds of millions of dollars across the country, with potentially billions more at stake. The retail corporations argue that their properties should be valued not as open, thriving stores, but as empty shells. They also place restrictive contracts into their deeds — such as clauses stipulating that the site can’t be sold to another big box store — and then use those very restrictions to argue for lower property taxes. In 2019, the Maine Center for Economic Policy surveyed the 25 Maine towns with the highest retail sales, as well as every town with a Walmart, and found big box stores in these areas were requesting that their property taxes be lowered by about a third, on average.
States can ban the use of dark store theory in property tax assessment, as Maine did in 2022. Maine’s law stipulates that assessors must take into account all characteristics of a big box store, including its current income, when assessing the property, and that restrictive sales terms can’t be used to artificially hold down the value of a property.
Model bill: LD 1129, Maine, 2021-2022
 Vara-Orta, Francisco, “Tax Breaks for Big-Box Stores Can Drain Money From Schools,” Aug. 2, 2017, EdWeek, https://www.edweek.org/leadership/tax-breaks-for-big-box-stores-can-drain-money-from-schools/2017/08.
 Grabar, Henry, “How Big-Box Stores Bilk Local Governments,” Slate, Feb. 7, 2019, https://slate.com/business/2019/02/dark-store-theory-big-box-stores-property-taxes.html.
 Austin, Sarah and Mario Moretto, “Big-box stores rolling out new effort to get out of Maine property taxes,” Maine Center for Economic Policy, Oct. 31, 2019, https://www.mecep.org/wp-content/uploads/2019/10/Dark-Stores-Report-Final-for-Distribution-103119.pdf.