The state Senate approved a bill Tuesday that would curtail big box stores’ ability to mount “dark store theory” challenges to their property tax valuations that could cost cities and towns hundreds of thousands of dollars in tax revenue.

Senators voted 21-13 in favor of a bill that would limit the ability of big box stores like Walmart, Lowe’s and Sam’s Club to argue that real estate valuations for their stores should be based only on those for other big-box outlets, even if those stores are closed or have draconian deed restrictions that limit their use and value for tax purposes.

“(Dark store theory) is a way for entities like Walmart to figure out a way to earn a competitive advantage by contesting small town valuations,” said Sen. Nathan Libby, D-Lewiston. “The bill in front of us tries to get a handle on that practice.”

The House voted 77-55 in favor of the bill earlier this month.

The bill was one of fewer than a half dozen bills that sparked debate in what has so far been a sleepy session in the Senate.

“What this bill does is attempt to solve a litigation issue through legislation,” said Sen. Matt Pouliot, R-Augusta. “It would challenge a taxpayer’s ability to challenge certain assessments. This bill automatically favors the municipalities at the expense of the property taxpayers’ rights.”


Pouliot warned that overzealous assessors could use the amended bill to waive consideration of the impact of a deed restriction on a residential property as well as a big-box property. Bill supporters say that’s not true and called that argument nothing more than a scare tactic.

“It’s about equity,” said Sen. Matthea Daughtry, D-Brunswick. “Our small businesses on Main Street shouldn’t be paying more in property taxes than large national and international corporations. This really sets the stage to make sure that everyone is on a level playing field.”

The “dark store” argument began about a decade ago. Large retailers appeal their assessments, arguing the value of their properties should be based on other large, but empty, big-box stores, many of which have deed restrictions intended to keep competitors from moving into them.

A similar bill fell through the cracks last year during a pandemic-shortened legislation session.

The bill, L.D. 1129, would codify the standard practice that towns and cities should base assessments on a property’s highest and best use. It also would say that assessments can’t be based on comparisons to any properties that have deed restrictions on them.

A report by the Maine Center for Economic Policy found large retailers in Maine sought $184 million in reduced valuations from 2015-19. The average reduction sought was 34 percent; the average reduction obtained was 8 percent. But some reductions obtained ran as high as 30 percent.

That means less money for town budgets, and the municipalities either must reduce services or shift the cost to other taxpayers, the policy center said. Daughtry drove that point home during her floor speech, urging colleagues to consider how many schools, parks and roads $184 million could buy.

Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.