Bill restores fairness to tax assessing

How much are your teeth worth to you? How much would they be worth to the random stranger idling next to you on Pine Grove Avenue waiting for the signal to turn green?

Weird question; let’s try a different one.

How much is your car worth? That’s easier. It has a Blue Book value and a relatively predictable resale price.

Assessing property values for tax purposes is supposed to work about the same way. A 2,000-square-foot house with three bedrooms and two baths at one end of the block should have the same taxable value as an identical house at the other end of the block.

Increasingly in Michigan, though, that common-sense rule — designed to ensure property owners are taxed equally and fairly — has been tossed out the window for a single class of property owners: The large, multistate corporations that operate big box stores.

Their lawyers have convinced the Michigan Tax Tribunal, the final arbiter of property assessments, that their huge and expensively constructed buildings are worthless. Here is the argument Lowe’s, Menards and other big-box retailers have used to avoid millions in property taxes:

When a corporation erects a 120,000-square-foot behemoth suitable for selling lumber and home improvement items it has created a structure that can’t be used for anything else. It’s like saying your teeth have no value because nobody else would use them. So if Builders Square closes the store, nobody will buy it, which means it ought to have a value closer to zero than the millions spent to build it.

Additionally, in some cases, the corporations put deed restrictions on the property so that it can’t be sold to a competitor. A Menards building, for instance, might make a perfectly good Home Depot. But if the deed blocks Home Depot’s purchase, and McDonald’s won’t consider it, then the site has no resale value and should be taxed accordingly, lawyers argue.

Michigan lawmakers say that’s nonsense. State Sen. Tom Casperson and a coalition of Upper Peninsula lawmakers have introduced legislation that would prevent the Tax Tribunal from using that faulty logic. The bill would take a bite out of huge tax breaks that have gone to corporate retailers at the expense of local stores and every other property owner.