Tools for Taking On the Corporate Subsidy Machine: Eliminate the ‘Dark Store Theory’ Loophole

September 13, 2022 State and Local Policy

The Problem:

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.[1] 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.[2] 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.[3]

The Policy:

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


[1] Vara-Orta, Francisco, “Tax Breaks for Big-Box Stores Can Drain Money From Schools,” Aug. 2, 2017, EdWeek,

[2] Grabar, Henry, “How Big-Box Stores Bilk Local Governments,” Slate, Feb. 7, 2019,

[3] 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,