A laborer completes finishing touches to the new Bangor Wal-Mart before its opening in July 2009. The new facility nearly doubled the retail space of the store it replaced. Credit: Kate Collins / BDN

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Ann Matlack, D-St. George, represents District 92 in the Maine House of Representatives. She served on the St. George and Knox County Budget Committees. David B. Martucci, CMA, is Thomaston’s assessors’ agent.

Even if you have never heard of the “dark store theory,” odds are you’re paying the price for it.

While everyday Mainers and small business owners pay property taxes in order to support their municipalities’ schools, parks and emergency services, many large corporations are using the dark store theory to avoid paying their fair share.

Across the state, municipal assessors are tasked with determining the value of properties on which to base property taxes. Property owners have the right to appeal the value that assessors determine. Unfortunately, large corporations have started to use this appeal process to push for property values that are a fraction of what towns determined their value to be.

When a municipal assessor establishes the value of a piece of property, whether it’s land or property with buildings and fixtures, there are a set of factors used to determine its value. One factor is comparable sales — looking at what similar properties in similar areas have sold for. Many times, the comparable property is a good fit for the comparison. But when the similar property has been unused for several years, or there are deed restrictions that limit the size of a store’s footprint or the nature of the business that occupies the space, two properties that may have been built for a similar purpose no longer have a similar value.

In Maine and across the country, there is a trend where owners of large commercial properties, like big box stores, question the assessed value of their property based on comparisons with “dark stores” or “failed stores,” that is stores that have been closed and sold for much less than their former value. They take a newly built property and compare its value to a decrepit, long-abandoned one. Or they impose deed restrictions on the store they just moved out of for the “supercenter” they built nearby, then use the restricted property as comparable to the unrestricted new store.

Local assessors are at a disadvantage when national corporations use the dark store theory and appeal the value of their property. Many towns are intimidated by the big dollar abatement requests made on behalf of big box stores by a team of lawyers, some of whom are paid a percentage of whatever concessions are made.

It is expensive for municipalities to litigate these types of appeals and they can take years to resolve. Many municipalities settle these appeals for a reduced value rather than spend tens of thousands of dollars or more in legal fees, while appeals are just a cost of doing business for these large corporations. In the end, the average taxpayer is the one who gets the bill, whether the municipality agrees to pay for the litigation or agrees to a settlement.

Hundreds of thousands of property tax dollars are at stake. When big box stores succeed with their abatement requests, those taxes have to be paid by everyone else in the community. While big box stores benefit from municipal services such as police and fire protection, it’s the municipality’s residents who are paying for those services.

In states where assessors have successfully fought off these spurious abatement claims, there are laws that address and combat these tactics. In the Maine Legislature, we have a bill, LD 1129, written in consultation with Maine assessors, that would give Maine municipalities the ability to clarify what makes a similar property comparable. Every property owner would continue to have the right to appeal; this bill would simply ensure everyone is playing by the same rule book.

Property owners in Maine pay their fair share in taxes. But shifting the tax liability from a successful, profitable, ongoing business to local taxpayers needs to be stopped before it even gets started. LD 1129 will clarify the law for assessors and property owners alike and improve the fairness of valuations across the state.